Home Sweet Home!

Summer’s coming to a close. 

And it becomes more important than ever to buy locally.

Ten points to get us thinking:

  1. Significantly more money re-circulates in Haliburton County when purchases are made at locally owned businesses, rather than those which are owned outside the region: More money is kept in the community because locally owned businesses purchase from other local businesses and service providers. Furthermore, purchasing locally helps grow other businesses as well as our tax base.
  2. Most new jobs are provided by local businesses: Small local businesses are the largest employer in Canada, and in Haliburton County they provide the most new jobs for permanent residents.
  3. Our one-of-a-kind businesses are an integral part of our distinctive character: The unique character of the county is what brought many people here and will keep them here. Our tourism businesses also benefit from this. When people take a holiday they generally seek out destinations that offer them the sense of being someplace, not just anyplace.
  4. Local business owners invest in community: Local businesses are owned by people who live in this community, are less likely to leave, and are more invested in the community’s future.
  5. Customer service is better: Local businesses often hire people with more specific product expertise for better customer service.
  6. Competition and diversity leads to more choices: A marketplace of numerous small businesses is the best way to ensure innovation and low prices over the long-term. A choice of small businesses, each selecting products based not on a national sales plan but on their own interests and the needs of their local customers, guarantees a much broader range of product choices. We have some great local examples.
  7. Reduced environmental impact: Locally owned businesses can make more local purchases requiring less transportation. This generally means less environmental impact.
  8. Public benefits far outweigh public costs: Local businesses in town centers require comparatively little infrastructure investment and make more efficient use of public services as compared to nationally owned stores entering the community (remember the Minden water tower and Canadian Tire?).
  9. When you buy locally you encourage investment in our communities: There is valid research which shows that in an increasingly homogenized world, entrepreneurs and skilled workers are more likely to invest and settle in communities that preserve their one-of-a-kind businesses and distinctive character.
  10.  Non-profits receive greater support: Non-profit organizations receive an average 350% greater support from local business owners than they do from non-locally owned businesses.

Our Tourism Industry

Economists claim that when a tourist spends $1,000 in a region, the local economy receives a “multiplied economic effect” of 3 to 7 times whatever was spent. While the amount of the multiplier effect is debated, economists agree that the multiplier effect is real.

We experienced this effect recently when the Ontario Senior Games Winterfest 2011 were here in Halburton County and of course we experience every year during our prime summer months when seasonal residents and tourists are so plentiful.

Commercial businesses

The “multiplier effect” applies not only to tourist dollars but also the dollars earned by our commercial businesses. For example, under the multiplier effect, for every 100 dollars outside-of-the-area businesses and industries have taken from our county, those outside communities should receive a “multiplied” economic effect equal to 300 to 700 dollars.

It’s exactly the same with purchases that our local governments might make.  If we give the contracts to businesses outside the region then we not only send the money out of the county we actually create a negative impact on the loss of economic activity at home, plus in this instance, the taxpayer funds that negative situation. Kinda like shooting yourself in the foot.

Local economic impact is important  and it suggests that price alone can’t be a deciding factor.  The multiplier effect can be very injurious to local business and to taxpayers at large.

The multiplier effect is real, and it has both a positive and an equivalent negative effect.  Our elected officials hopefully keep this in mind when considering how contracts are awarded.  Having a LEI (local economic impact) statement attached to a bid may not be a bad idea.

Distant Ownership

The problems caused by “distant” ownership are fairly easy to see, and the very same process is going on all over the world. For example, when a “big box” builds a new store in a new community, it inevitably bankrupts scores of mom-and- pop family businesses that used to sell food, home goods, hardware etc. Nobody cares. The belief is that the new business creates different employment opportunities and, after all, those mom-and-pop operations were “small time” and probably never made more than $50,000 profit a year, anyway.

Yes, it’s true.  People think they’re getting a good deal from “big box” because it brings cheaper prices and more jobs. But we ignore the fact that we’ll lose the profits (and local “multiplied” effects) that mom and pop stores used to generate. Given the multiplier effect, the $50,000 profit of each of those mom-and-pop businesses might have “multiplied” to generate the equivalent of $250,000 a year in local economic activity. So if we lose 10 mom-and-pop businesses to install one “big box”, our community may be collectively (and “invisibly”) impoverished by $2.5 million a year as former “multiplied” mom-and-pop profits are sucked out of the communities (where “mom and pop” would’ve spent them) and sent to distant corporate headquarters.  This is not to say there aren’t some very large mom and pop enterprises that are owned locally, in a franchise arrangement.  The majority of money earned on the sale of goods and services stays within the community.

But when we replace scores of local “mom and pop” stores with one super “big box”, we send all those local profits back to the distant corporate headquarters, and often the money pot ends up out of the country.  We should not discount the fact that these “branded” businesses take away from the unique nature of the local community and its business areas.

Without local ownership and local profits, unemployment and poverty persists. Along with this are the social problems (poverty, substance abuse, family abuse) that are a plague on our county.

We are coming into the seasons where it is more important than ever to shop local and do business locally.  When we do – it comes back to us many times over.  Making a commitment to buy locally is not to suggest that we shouldn’t expect quality in both product and service.  That’s a fair expectation of the local retailer, service organization or business.  The challenge for the local business owner and retailer is to ensure that their commitment to the local community and the business is clearly communicated to the staff.  It’s important that each person personify the VALUE of shopping and doing business locally.

So before you head out of the county to do some shopping, remember –  the multiplier effect is a Zero-Sum Equation. In other words, if a Haliburton shopper takes $100 out of his/her bank account and spends it outside the county, that local economy will receive a $300 to $700 benefit in terms of economic stimulation—but removing $100 from his local bank account must also cause an equivalent $300 to $700 LOSS in economic activity in our local Haliburton County economy (Ouch!)

Buy local!  Be a part of the Multiplier Effect!

Some great interviews next week

It probably shows through … I really enjoy interviewing our great Canadian musical artists.  Some are really well known, some are emerging artists.  I find their stories inspiring and intriguing.

I hope you’ll Join me next week on Canoe FM.  We have some outstanding artists who will be featured at the Forest Festival (www.theforestfestival.com) this year.  Here’s the line up.

Dave Young (Dave Young Quartet), one of the world’s great jazz musicians.  Hear his story 8.30am on Wednesday.  The great Oscar Peterson says, “David and I have worked and recorded together at earlier periods in my career.I immediately called on Dave to stand in the now empty bass position in my quartet.’ Hows that for high praise.  Wow, what a treat.

Chris McKnool of Sultans of String will join us Thursday at 8.10 am. Mike Hill, Artistic Director, Mariposa Folk Festival says “Virtuoso playing…. An exuberant and infectious sound… Powerful and moving…The Sultans are simply an awesome musical group!”  Don’t miss this interview.

Paul Neufeld joins us on Friday at 8.l0 am. Paul is a member of the Grooveyard. The band whose high energy, versatility, and musicianship has made them one of the hottest group in Toronto.  Sean Pennylegion says they are sure to shake the beams at the Logging Museum.”

Join us at http://www.canoefm.com or live at 100.9.  Without you, it ain’t radio!

Check out the full lineup of talent at http://www.theforestfestival.com


No green thing

This is a rather cute story, and it will certainly make the 55+ crowd smile.

In the line at a store, the cashier told an older woman that she should bring her own grocery bags because plastic bags weren’t good for the environment.

The woman apologized to him and explained, “We didn’t have the green thing back in my day.”

The clerk responded, “That’s our problem today. Your generation did not care enough to save our environment.”

He was right — our generation didn’t have the green thing in its day.

He was right, back then, we returned milk bottles, soda bottles and beer bottles to the store. The store sent them back to the plant to be washed and sterilized and refilled, so it could use the same bottles over and over. So they really were recycled.

But we didn’t have the green thing back in our day.

We walked up stairs, because we didn’t have an escalator in every store and office building. We walked to the grocery store and didn’t climb into an SUV  every time we had to go two blocks.

But she was right. We didn’t have the green thing in our day.

Back then, we washed the baby’s diapers because we didn’t have the throw-away kind. We dried clothes on a line, not in an energy gobbling machine burning up 220 volts — wind and solar power really did dry the clothes. Kids got hand-me-down clothes from their brothers or sisters, not always brand-new clothing. But that lady is right; we didn’t have the green thing back in our day.

Back then, we had one TV, or radio, in the house — not a TV in every room. And the TV had a small screen the size of a handkerchief (remember them?), not a screen the size of the state of Montana .

In the kitchen, we blended and stirred by hand because we didn’t have electric machines to do everything for us.

When we packaged a fragile item to send in the mail, we used a wadded up old newspaper to cushion it, not Styrofoam or plastic bubble wrap.

Back then, we didn’t fire up an engine and burn gasoline just to cut the lawn. We used a push mower that ran on human power. We exercised by working so we didn’t need to go to a health club to run on treadmills that operate on electricity.

But she’s right; we didn’t have the green thing back then.

We drank from a fountain when we were thirsty instead of using a cup or a plastic bottle every time we had a drink of water.  And we didn’t catch germs.

We refilled writing pens with ink instead of buying a new pen, and we replaced the razor blades in a razor instead of throwing away the whole razor just because the blade got dull.

But we didn’t have the green thing back then.

Back then, people took the streetcar or a bus and kids rode their bikes to school or walked instead of turning their moms into a 24-hour taxi service.

We had one electrical outlet in a room, not an entire bank of sockets to power a dozen appliances. And we didn’t need a computerized gadget to receive a signal beamed from satellites 2,000 miles out in space in order to find the nearest pizza joint.

We weren’t perfect by any means, but when you think about it, we, the people, didn’t have the same urgent requirement for the green thing. Hell, making do and, at times, doing without were everyday occurances.  Bit by bit we got over that “drab” way of life … and sure as shootin’ we need the green thing.

Is that the toilet flushing? or is it the sound of my RRSP’s going DOWN THE DRAIN!!??

A friend of mine sent through this perspective on the U.S. financial woes.  Read it through.  It will make you a little green around the gills but it reminds you that you’re not along in your pain!  Getting close to the time when you fight the dog for the kibbles n bits.

Many of us have seen our retirement portfolios significantly reduced this week and will likely see a bigger haircut next week. After watching the nonsense of over the debt refinancing bill and hearing number thrown around it can be very confusing as to what is going on in Washington. The following e-mail was sent to me and I thought explains the dilemma in simple terms we can all understand. I checked the key numbers in Wikipedia and they seem to be reasonable.

Federal Budget 101

The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let’s put the 2011 federal budget into perspective:

U.S. income: $2,170,000,000,000

Federal budget: $3,820,000,000,000

New debt: $1,650,000,000,000

National debt: $14,271,000,000,000

Recent budget cut: $38,500,000,000 (about 1 percent of the budget)

It helps to think about these numbers in terms that we can relate to. Let’s remove eight zeros from these numbers and pretend this is the household budget for the fictitious Jones family.

Total annual income for the Jones family: $21,700

Amount of money the Jones family spent: $38,200

Amount of new debt added to the credit card: $16,500

Outstanding balance on the credit card: $142,710

Amount cut from the budget: $385

So in effect last month Congress, or in this example the Jones family, sat down at the kitchen table and agreed to cut $385 from its annual budget. What family would cut $385 of spending in order to solve $16,500 in deficit spending?

It is a start, although hardly a solution.

Now after years of this, the Jones family has $142,710 of debt on its credit card (which is the equivalent of the national debt).

You would think the Jones family would recognize and address this situation, but it does not. Neither does Congress.

The root of the debt problem is that the voters typically do not send people to Congress to save money. They are sent there to bring home the bacon to their own home state.

To effect budget change, we need to change the job description and give Congress new marching orders.

It is awfully hard (but not impossible) to reverse course and tell the government to stop borrowing money from our children and spending it now.

In effect, what we have is a reverse mortgage on the country. The problem is that the voters have become addicted to the money. Moreover, the American voters are still in the denial stage, and do not want to face the possibility of going into rehab.



Chief Executive Officer

Equitas Capital Advisors LLC

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