The Halifax Chamber has been working diligently to ensure our members are up-to-date and aware of the programs, services, and announcements that could impact their business. We have also spent countless hours chatting with members, producing relevant webinar material, and advocating for increased supports and common-sense policies to the government. Our advocacy work is often quite specific, focusing on issues like taxes, transit, and red tape. As our business community begins to recover, it is time to start looking forward. It’s time to find new and better ways to do business. One such way is through local and social procurement.
Billions of dollars are spent on the procurement of goods and services each year in Nova Scotia, but not all those dollars are spent locally. There are good reasons why it’s high time to adopt a local lens when procuring products. When governments and businesses alike choose to procure goods or services from outside our region, a significant amount of money “leaks” out of the community — to our detriment. The reason for this is straightforward: when a local business is awarded a procurement contract, it has a far greater multiplier effect than a non-local one.
It’s been found that, when awarded a procurement contract, local businesses recirculate upwards of 33% of revenue earned, while non-local businesses recirculate as little as 1% and only as much as 18%. This means that a theoretical $1M contract awarded to a local business would recirculate upwards of $330,000, compared to a non-local business that would circulate anywhere from $187,000 to $10,000. This means that a local business recirculates 77% more than the very best non-local business, and 3200% more than the worst.
There are countless other benefits of procuring locally, including job creation, improved charitable giving (local businesses are more generous than non-local ones), supporting the revitalization of downtown cores, and generating (and keeping) knowledge and skill here in Nova Scotia. Local procurement doesn’t only support small businesses, but our community more broadly.
Of course, the reality is that different levels of government play a lopsided role in the procurement of goods and services. From building new hospitals to the salt we use on the roads in the winter, governments buy a lot — and they buy a lot non-locally. A responsibility falls on all levels of government to adopt a local lens in procurement as a method to support regional economic development. But this doesn’t mean we don’t all have a role to play in supporting our local businesses and community. Adopting a local lens when procuring goods and services is a good place to start.
The Chamber will continue to support our business community and residents through the provision and discussion of new and innovative ways to do business. We are open to ideas or stories and would love to hear from you. You can reach our Senior VP of Policy, Kent Roberts, at kent@halifaxchamber.com.
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