Yahoo Finance Buy local, or say bye to local: Ottawa boosts funding for shop-local initiatives
When Norah Fountain saw the stack of Amazon boxes tumbling from the shelves in her local post office, she was immediately concerned about what it meant for her favourite local businesses.
"All of this money is flowing out of our community," Fountain, the head of the Muskoka Lakes Chamber of Commerce, said in an interview. She then spoke to a local councillor, and they came up with an idea. "Maybe we should make our Amazon."
A few weeks later, the Muskoka Lakes Chamber of Commerce launched ShopMuskokaLakes.ca, an online Amazon-style marketplace that allows local businesses to sell goods and services on its website, either directly or by linking to their own page.
Now, Fountain hopes the Chamber of Commerce will receive funding from a new Shop Local initiative launched by the federal government to help expand the website. She says money from the grant would go towards expanding the website to add more local businesses, as well as promoting the site through an advertising campaign.
"It's really buy local, or say goodbye to local," she said.
"Across the country, thousands of stores are closing for good, and we don't want to see that happening. So if we're going into recovery mode, we want to make sure we're putting our local businesses in the spotlight."
The push to shop local has been consistent throughout the pandemic, particularly given the success of big-box retailers and e-commerce behemoths like Amazon. In recent weeks, the effort has managed to get some additional financial support.
Last week, Ottawa announced it would spend $33 million to encourage Canadians to shop at local businesses. Of that, $9 million will go towards the Ontario Chamber of Commerce, which will then disburse the funds to local organizations.
Rocco Rossi, the chief executive of Ontario's Chamber of Commerce, says the funding comes at a critical time for small businesses in the province, especially as Ontario gets ready to enter the next phase of its reopening on Wednesday.
"The last 16 months have been hell on small businesses, on main streets in particular. As reopenings begin, one of the things that businesses won't have a lot of extra cash to do is marketing," Rossi said in an interview.
"This is really going to put gas in the tank when it comes to assisting local chambers and local businesses to encourage consumers to go out and support their local businesses."
Avoiding "a wave of bankruptcies"
With more businesses able to reopen across the country and operations beginning to look closer to normal, the next period will be a critical one for many companies when it comes to the post-pandemic recovery.
According to a recent survey of its members conducted by the Canadian Federation of Independent Business (CFIB), 46 per cent of businesses are worried about their survival, given the amount of debt they have taken on through the pandemic. On average, small businesses in Canada have taken on $163,000 in debt, the CFIB says. If sales don't return in a significant way, many businesses will not survive.
The removal of government subsidies will also make this a make-or-break time for businesses, said Perrin Beatty, the chief executive of the Canadian Chamber of Commerce.
"The transition away from government support is going to be absolutely critical," Beatty said.
"If we pull the supports and all of the bills come due for these small businesses before they're able to be up and running again, we could see a wave of bankruptcies that would be devastating for thousands of small businesses across the country."
The Muskoka Lakes' answer to Amazon was launched at the start of June, but Fountain says it has helped keep local businesses on the radar for new and returning customers. Some sellers – such as card-maker Frances Mae Balodis – have never sold goods online, while others link to their own websites. Fountain says many customers have been Americans unable to visit the area since the pandemic began.
While the Muskoka Lakes Chamber does take a $35 monthly fee to operate the site, Fountain says any additional funds above operating costs will go towards marketing campaigns and advertising.
"Online shopping is here to stay, so we would be doing a disservice telling people to shop at their local store, without giving other options," Fountain said.
"There's a lot that goes into operating an online store, but many don't have the money for marketing. Together, we're hoping to make these dollars go a lot further for Muskoka."
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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