Along with providing services, local governments direct much of their energy toward improving local economies. Particularly since the recession that began in 2007, local governments have focused more attention on developing policies and projects that improve the business climate, without compromising community standards.
One of the ways local governments can contribute to their communities’ economies is by buying local. A new joint study by researchers from the Columbia Institute, LOCO BC, and ISIS Research Centre at the University of BC Sauder School of Business looked at the economic impact of purchasing. The first of its kind in a Canadian context, the study found that purchasing goods from locally-based suppliers creates nearly twice as much benefit to the local economy as buying from multinational chains.
In BC, local governments and school districts alone spend more than $6.7 billion annually on goods and services, according to the study. Those same organizations spend millions of dollars on economic development and on investments in their communities. The study shows how purchasing can be used to reinforce economic development and support strong communities.
Yet, a trade agreement currently being negotiated by the Canadian government and the European Union could restrict public procurement and end the practice of buying or hiring locally.
More than 80 municipalities along with school boards and hospitals across Canada have passed resolutions to opt out of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), including the City of Powell River.
CETA, which critics contend has more to do with corporate rights and profits than trade, has the ability of prohibiting municipalities from supporting goods and services that favour Canadian producers. European corporations want the same access to government business as local companies. This will only hamper the ability of municipalities to support the local economy.
As the new research study shows, government procurement practices are an important way of supporting the local economy, especially in difficult economic times or when new businesses or technologies need a boost. Re-circulating local purchasing dollars in the local economy is a meaningful way of creating good jobs, building local businesses and growing local economies.
Many municipalities want the federal government to exclude them from trade agreements that restrict their powers. So far, the federal government appears not to be listening, which means local governments will have to speak louder to press the point.
