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Some questions that arise...

How does the Calgary Dollars system work?

People can do direct interchanges (barter) or they can accept Calgary Dollars for whatever they are "selling", then use the Calgary Dollars to obtain whatever goods or services they want from someone else.

How much does it cost to join? And what do I get for it?

It only costs $12 per year ($1 per month) to join and for this you get 40 Calgary Dollars and listings of what you are "selling" and your "wanted" ads in the Calgary Dollars listing updates (published every 2 months).

Who decides what something is worth?

Calgary Dollars are currency. Value and appropriate exchange are negotiated between buyer and seller. One Calgary Dollar translates to CDN$1 by general consent.

How do I get Calgary Dollars?

Join the Calgary Dollars Community and receive 40 Calgary Dollars. If you are a community service group or an NGO etc, apply for a grant of Calgary Dollars.

Why should I use local currency?

Local currency increases economic activity and options and they are a creative solution to the diminishing buying power we're experiencing.

What about GST?

If you normally charge GST for your professional service or product the same applies to your local currency and barter transactions.

Who makes decisions in the Calgary Dollars Community?

Policy decisions are made by the steering committee and the membership at the Potluck Suppers -- monthly.

How do I make sure I get good value for my Calgary Dollars?

Calgary Dollars are like any other currency and you would check out the service or product the same way you would when you are using federal dollars.

What advantage is there for businesses to participate?

Local currency and bartering generate more business; you can exchange Calgary Dollars for services available from members; you can pay for a portion of advertising costs in the Calgary Dollars publication with Calgary Dollars; you are in an obvious, beneficial 2-way relationship with your community.

What about Income Tax?

Local currency is like any other currency and should be declared if it adds to your personal or business income. Revenue Canada has an Interpretation Bulletin "Income Tax Act -- Barter Transactions" (1982)

Revenue Canada Taxation

The relevant Canada Customs and Revenue Agency bulletin is available from the government website as Document IT-490, and is also reprinted here:

INCOME TAX ACT Barter Transactions

No: IT-490
Date: July 5, 1982
Reference: Section 3 (also sections 9 and 69)

  1. The purpose of this bulletin is to outline the Department's views on the income tax implications arising from bartering.
  2. In its simplest form, bartering consists of trading by exchanging one commodity for another. Recently, however, the practice of bartering for goods and services has evolved into a sophisticated computer-controlled system of commerce proliferated by franchised, member-only barter clubs, where credit units possessing a notional monetary unit value have become a medium of exchange.
  3. A barter transaction is effected when any two persons agree to a reciprocal exchange of goods or services and carry out that exchange usually without using money. In a barter transaction between persons who are dealing with each other at arm's length, it is a fundamental principle that each of those persons considers that the value of whatever is received is at least equal to the value of whatever is given up in exchange therefor.

Income Tax Implications

  1. The Department takes the view that barter transactions are within the purview of the Income Tax Act. Such transactions can therefore result in income or expense as contemplated by sections 3 and 9 thereof or can result in the acquisition or disposition of capital property, eligible capital property, personal-use property or inventory, depending upon the circumstances of the persons who are bartering and the nature of that which is bartered, on the same basis as if cash was the consideration.
  2. In the case of services bartered by a taxpayer for either goods or services, the value of those services must be brought into the taxpayer's income where they are of the kind generally provided by him in the course of earning income from, or are related to, a business or a profession carried on by him. Examples are a dentist or the owner of a plumbing business who agrees to fix someone's teeth or drains (respectively) in return for services or property provided by the other party. Where the taxpayer is an employee, e.g. a mechanic, occasional help given to a friend or neighbour in exchange for something would not be taxable unless the taxpayer made a regular habit of providing such services for cash or barter.
  3. In the case of goods bartered by a taxpayer for either goods or services, the value of those goods must similarly be brought into the taxpayer's income if they are businessrelated. For example, the value of groceries given by a grocer to someone in exchange for something else must be brought into the grocer' s income . In addition, other goods bartered may give rise to a capital gain. Such would be the case if capital property in the form of a valuable painting, a sailboat or land is bartered for goods or services.
  4. In arm's length transactions, where an amount must be brought into income or treated as proceeds of disposition of capital property, that amount is the price which the taxpayer would normally have charged a stranger for his services or would normally have sold his goods or property to a stranger. The cost of the services, goods or property received by him is the same amount as the total value of the goods, property or services given up, plus any cash given as art of the barter, and minus any cash received as part of the barter. The same rules would apply in non-arm's length transactions, subject to the provisions of section 69 which would override them where appropriate, e.g. by restricting the cost of goods received to their fair market value.
  5. Where the goods or services given up cannot readily be valued but the goods or services received can, the Department will normally accept the value of the latter as being the price at which the transaction took place if the parties were dealing at arm's length.

What happens to my old Bow Chinook Barter Community HOURs?

You can exchange your old BCBC HOURs for the new Calgary Dollars. One HOUR equals C$10 (Half HOUR = C$5; One Tenth HOUR = C$1).

Contact the Calgary Dollars office to arrange an exchange, or bring your old HOURs to the monthly potluck.

Exchanging the old currency for the new Calgary Dollars is optional. The old BCBC HOURs remain valid and can continue to be used as before.

What if I want to start my own local currency?

Read the book "Money: Understanding and Creating Alternatives to Legal Tender" by Thomas H. Greco, Jr.

Thomas Greco has written a excellent overview of local currency systems and reviews his personal experience with them. He is offering a downloadable version of his book which is an essential resource for anyone considering starting a local currency.