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!

Author: Mike Jaycock

Living life at Eagle Lake, Ontario, Canada.

2 thoughts on “Home Sweet Home!”

  1. we used to go out of town to shop,, because the stores in town were expensive.. now however there is more competition in haliburton so shopping here is easier and better deals for us the consumer.. i shop here now more than out of town…

  2. Certainly pricing that makes sense is an important aspect of VALUE. We expect that due to shipping costs and purchasing in smaller lots we will see some difference in price. The convenience of being able to “buy at home” makes us all happy and it is a contract between the consumer and the business – each of us doing our part to keep our local economy moving ahead. Thanks for your comment Fay.

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