local businesses

Shopping where you live has a huge impact on the local economy. Your support can be far-reaching as every dollar spent locally gets circulated 3 or 4 more times ensuring your money stays in the community. 

While it’s not always possible to buy everything you need locally, finding a balance between e-commerce sites and buying locally can be a step in the right direction.

Today’s podcast features Leigh Taylor, Licensed Insolvency Trustee and Bruce Duggan, Associate Professor of Management at Providence Buller School of Business. Bruce and Leigh discuss what it means to the local economy of locally owned businesses. 

Their discussion also covers:

  • Advantages of buying local and how to support local businesses
  • The price local economies pay for the convenience of online shopping
  • Possibility of a recession in Canada
  • The high level of consumer debt – rising 5-6% per year
  • Advantages of dealing with a local Licensed Insolvency Trustee

If you are having financial difficulties, whether business or personal, talking to a local Licensed Insolvency Trustee should be your first call. You will have the opportunity to meet them face to face in your initial consultation and be assured they are knowledgeable about provincial regulations.

Wayne Kay 00:04
Welcome to the Debt Matters Podcast, where we help Canadians find solutions to their debt with Licensed Insolvency Trustees from across Canada

I’m Wayne Kay. Today we’re going to talk about the importance of supporting local businesses. My guests today, I’ve got two guests. One is Bruce Duggan, Associate Professor of Management at Providence Buller School of Business. The other is Leigh Taylor from LCTaylor Licensed Insolvency Trustee with offices in Winnipeg and Northwestern Ontario. 

Why don’t we start off with just a little bit of a more in-depth introduction for each of you. Bruce, let’s start with you. Maybe you can give us a little background of your story.

Bruce Duggan 00:44
Sure. I’ve been teaching at the Providence Business School for about 20 years now. I did all sorts of management things and leadership activities before that. And I teach business ethics, corporate finance, and First Nations relationships with business. 

I have a consulting company as well, and our company is focused on providing support for remote First Nations in northern Manitoba that are working on getting off of fossil fuels onto renewables, doing a better job with their waste, and recycling and growing and harvesting more local food.

Wayne Kay 01:25
Wow, you’re on a lot of projects there, that’s for sure. Thanks very much again for your time and being on the show. And Leigh, let’s get a little more in depth introduction on you as well.

Leigh Taylor 01:37
Sure. I’m a Licensed Insolvency Trustee. We started LCTaylor about 30 some odd years ago, and it works exclusively in the area of insolvency. So we deal with a lot of Consumer Proposals, small businesses, personal Bankruptcies, and that sort of thing. We’re probably the largest insolvency firm in Manitoba, and that’s where we focus.

Wayne Kay 01:59
I’m looking forward to our discussion today, which would be a great one, regarding supporting local businesses. Why don’t we just start off with what would be the definition of supporting a local business?

Wayne Kay 02:12
Maybe, Bruce, you can handle that one?

Bruce Duggan 02:14
Sure. Well, where do you spend your money? We all spend money, well, almost all of us. And sometimes we spend it and it leaves our city or town or our province or even our country as soon as it’s out of our hands.

And in other cases, we spend it locally and it stays at least for a few purchases. And then the people we buy stuff from, purchase from somewhere else. It stays in the local economy and helps grow a local economy. 

I don’t think it’s realistic to think that we will only ever buy local, but I do think it is realistic to be aware of. So where am I buying from and who is my buying –  helping, and harming?

Wayne Kay 03:00
So, as Canadians, one thing I love seeing is any – buy Canadian. That’s one of my main things whenever I buy bigger purchases. But oftentimes I find for myself – I may do my research online to find maybe some gadget that I’m looking for. And then when I go down to my local stores, I will often find it for almost the same price, sometimes even cheaper. But I get it in my hands right away.

Bruce Duggan 03:32
Yes, local businesses. Well, every business, but certainly local businesses and small businesses are under tremendous pressure right now to match the prices of places like Amazon or Walmart or the big multinationals – because they know perfectly well that anybody can check the prices. And people are looking for a way to survive this inflation. And part of that is watching every dollar and figuring out where you can best spend your money.

Wayne Kay 04:05
But if you’re not spending it in your local economy, how does that harm your local businesses and how does that spread out?

Leigh Taylor 04:16
Well, I think – go ahead.

Bruce Duggan 04:18
Sorry, Leigh. No, go ahead.

Leigh Taylor 04:20
I was going to say that the economics of it is sort of widespread, because when you’re supporting a local business, you’re also supporting local grocery stores, local drug stores, local garages, because that’s where the employees of this company are going to be spending their money as well. There’s going to be taxes paid by these people, income taxes, property taxes, and these sorts of things, which all go back to being able to finance communities, make them better places for the people to live in. So buying local and supporting local really has a far reaching effect on the whole community.

Bruce Duggan 05:01
Every dollar you spend locally gets re-spent two, three, four times locally, often before it leaves the community. But we shouldn’t be romantic about this. We shouldn’t say only local, because if you think about all the things we need for our homes and for our families, a lot of it actually isn’t made here.

So it’s not a matter of saying only buy local, but it is, I think, important to say there needs to be a balance. If you only ever buy from Amazon or from an international company, then you’re going to starve your home community. Imagine what your town would look like if there were no stores in it at all and no businesses at all. It would be a kind of lonely, empty place. There’d be some houses and that’d be that.

That’s not a way to run a community, and you can’t actually run a town like that. So there has to be a balance and a mixture between them.

Wayne Kay 06:05
Do you feel that smaller communities have an advantage to this? Businesses in smaller communities as opposed to the big cities in our country?

Bruce Duggan 06:17
I teach in a small town. I live in Winnipeg, but I teach in Auburn, and there are everything from tiny little hamlets around where I teach to small cities like Steinbach and big cities. I don’t know if there’s an advantage. If your town gets too small, people aren’t going to come there to buy.

Wayne Kay 06:39

Bruce Duggan 06:39
And we’ve seen if you think about the last 50 or 100 years, especially on the Prairies, there’s probably half, maybe a third as many towns as there used to be. Lots and lots of places have died. And it’s partially because a small business that only serves a local market in a small town is really vulnerable when economic shocks happen.

Wayne Kay 07:05
Kind of like what we just went through is kind of what you’re mentioning.

Bruce Duggan 07:09
Yes. Businesses really have had a brutal one two punch. COVID knocked the stuffing out of a lot of businesses. And then inflation, if they were still standing after COVID, inflation has done a number on them too. So it has been a tough four or five years.

Wayne Kay 07:32
How do we support them more? Is it just a matter of you’re going to pay a little bit extra to buy more in your local stores, your local small businesses?

Bruce Duggan 07:43
I don’t know if you always pay extra or even if you usually but it does take more time. If you think about it, if you wanted to buy a pair of shoes, for instance, you could buy a pair of shoes as long as you know your shoe size in three minutes online.

If you’re going to go out of your house, go to a store, buy a pair of shoes, you’re probably looking at an hour or two of effort. The purchase is not necessarily going to be more expensive, but it does mean that you need to spend the time. It’s just not as fast. But the advantage is you actually get to buy from a human being.

Wayne Kay 08:20
Which is part of the fun of actually going out and buying stuff.

Leigh Taylor 08:24
I think that’s a good part of it. You’re dealing with local people, you know a lot of them, your neighbors, et cetera.

You also know that if there’s a problem, it’s a lot easier to deal with that problem locally. Like if the shoes don’t fit or you change your mind or whatever, it’s one thing to send it back and hope you get a refund. And three weeks or four weeks later, you might find out about it. As opposed to if you just go down to your neighbor’s shoe store and he takes care of it with a smile in 30 seconds. So the theory is great shopping on Amazon, et cetera, but sometimes if there’s problems, there are bigger problems.

Wayne Kay 09:03
So when it’s good, it’s good, but when it’s bad, it can be a real pain in the butt.

Bruce Duggan 09:08
It’s not very human. No, we’re human beings. We like to, at least most of us like to spend at least some of our time with other human beings. And one of the ways we do that is you go out for dinner and you have a choice.

Do I go to a chain restaurant, or do I go to a restaurant where I know the owner? If I’m going to get my car repaired, do I take my car to a franchise place, or do I take it to someone that I know? And so every one of those is a choice, and it has conscious implications. It has implications and I hope that we are conscious of them.

Wayne Kay 09:51
Right. So when you were talking about how every local purchase will then spin off three or four other purchases, I’m sure they’ve studied how that actually works and what that looks like. Is there a way for you to verbalize it?

Bruce Duggan 10:07
Yes, actually there are people, not me, but there are people who study this, economists and academics. And you can actually define the health of a community by how many times a dollar gets re-spent. So if a dollar gets re-spent four or five times, then the chances are that’s a pretty healthy community both in terms of social connections but also in terms of economic health.

But there are other communities and First Nations are a good example of this. Where you buy stuff and the money immediately leaves the community because there’s only one store and it’s very hard for a community like that to be healthy, both socially healthy and economically healthy. So having enough businesses that you buy from the shoe store, the shoe store goes down the bakery, the baker sells them a loaf of bread, but then they go and buy wheat from a farmer. That kind of almost that Sesame Street version of an economy.

Wayne Kay 11:12

Bruce Duggan 11:12
Actually it’s true. If there are connections, 2,3,4,5 connections is great. And the more of those you can have within limits, you’re not going to have 300 purchases before it ever leaks out of the community. But you do want to have at least three or four and for some reason, I’m not sure why, five seems to be about the definition of a healthy community or the sign of a healthy community.

Wayne Kay 11:41
Do small businesses need to work harder? I would think so because I look at some of the local businesses here in my community and they are very successful. But they work hard. They work very hard at being successful. They don’t just say come and buy local because I’m here. They are actually aggressively going after those customers and advertising.

Bruce Duggan 12:05
I don’t think I would say that small businesses or local businesses need to work harder. I know a few, I don’t know them all, of course, but they’re the hardest working people you’re ever going to meet. And I think working harder is not always the comment, just work harder, that’ll solve it. 

I think it’s true that we’re in a situation right now where the COVID and then inflation has driven a lot of people into really difficult financial situations. It’s like we’ve been in a blizzard for three years and sort of put our head down and plowed forward.

But it’s not easy. And I’m not sure this year it’s going to get a lot easier.

Leigh Taylor 12:52
I think with the tough economic times that we’re facing right now, small business owners are having to work a lot harder simply because they can’t afford the employees. They’re trying to stay open longer hours because they want to catch every customer they have. They stay up at night trying to get the paperwork done and tax returns and everything, so there’s less people to spread it out with, as opposed to a large international firm that may operate a store or whatever. You work your seven and a half hour shift and go home and not worry about it. Yes, I think if you had your own business in these times, you’re really working hard.

Bruce Duggan 13:30
I think that small businesses and local businesses shouldn’t think that if they’re facing a really difficult financial situation, it’s necessarily that they’ve done something wrong. There are good years and bad years. That’s just the way the world is, and we’re in some bad years.

The province I live in, in Manitoba, has done remarkably well, considering all those headwinds, but we’ll see how 2023 shapes up. Some forecasters say that there’s going to be a recession. What do you think, Leigh? I think the chances of a recession, a mild one, are pretty good, aren’t they? Pretty high.

Leigh Taylor 14:17
Well, a lot of the problems with the recession is if you think you’re going to have a recession, you’re probably halfway there and there’s so many people saying, well, yeah, there’ll be a recession. It might not be that bad, but a recession is a recession. So I think it’s not inevitable because you never know what goes on. But I think there’s a really good chance that once things start to settle with the Pandemic and all this sort of stuff, you’re going to find that a lot of small businesses aren’t going to make it.

A lot of people are going to find that the debts that they’ve accumulated over the course of the last couple of years with layoffs and unemployment insurance and that sort of stuff, I think you’re going to find that more and more of them are going to be seeking other ways out. And that means that they’re not going to be spending as much money, which makes it even harder on things like restaurants and retail stores, which means some of them are probably going to collapse too. 

And that’s really what a recession is all about. One area is hard hit and it affects another area and then another area. So it’s sort of a downward spiral. I think we’re looking at that. I’m hoping it’s not going to be as bad as we’ve seen in the past.

Bruce Duggan 15:29
I can remember when my parents re-mortgaged their house, this would have been in the 80s. They were looking at 18% interest, and we’re not at that. And there’s nothing that says that’s going to happen anytime soon. So things are hard now, but not as hard as they have been in the past.

But maybe the most worrying sign I see, and you probably know this better than me, Leigh, is that we’re at pretty much the highest level of consumer debt we’ve ever been at. We’re at almost two and a half trillion in Canada and it’s going up 5% a year. That’s a hard thing for a consumer to live with and it’s a hard thing to convince a consumer to spend more money for a small business to try to do that when they’re already weighted down with debt.

This is a gloomier podcast than I think you were expecting, Wayne.

Wayne Kay 16:30
I think it’s real though. It works in both ways. You can see how spending money locally will then spread to other businesses and grow, but it also works in the reverse order as well when people aren’t spending money. And I think that brings up a really great segway into let’s talk about – we talk about supporting local, but even Leigh and your business dealing with a local Licensed Insolvency Trustee. Why is it important for a business that’s struggling to do that?

Leigh Taylor 17:01
Well, there’s several reasons. And when I’m talking local, it’s not just we’re talking about national firms versus local firms. During the pandemic, a lot of Trustees got into operating over the internet and on Zoom and they don’t really meet the people that they’re talking to, but because there were restrictions on meeting in the office, et cetera. They were allowed to do all of this over, let’s call it Zoom. And that worked during the pandemic because people still needed those resources to turn to, but they couldn’t get out and get them.

Well, things have changed now. Most offices are open again, so you can visit them. And there’s a real difference when you’re talking about something as personal as solving your financial problems. Whether it’s a Bankruptcy or a Consumer Proposal or some sort of a budgeting process that you’re trying to go through, it’s so much more effective to do it in person. Sometimes you can’t do that if you’re living in a remote location.

Zoom might be the best that you get. But dealing with somebody that has a real office and not just introducing himself over the internet makes it a little bit easier to ask questions, to get personal responses to your particular problems in your particular situation, and particularly if there are problems. 

And there’s all sorts of potential problems when you file applications, court applications, you’re putting a Consumer Proposal before your creditors, there’s all sorts of potential problems that can arise. And if you’re dealing with somebody that’s 1,500 miles away, a little more difficult to deal with, you don’t get it done as quickly. And it also gets more complicated when you’re dealing with somebody that’s local.

If there’s an application that has to go to court or you need approval for something and you have to make a court application for it, if your Trustee is sitting in Toronto or Calgary, you’re not going to get the same sort of response to those inquiries. Nor are you going to get the results because they’re not going to fly in for your particular court action on a Wednesday morning. So that makes it more difficult to deal with.

Wayne Kay 19:09
Right. So there are many reasons supporting that local economy and there you go, there’s another reason right there is just for the logistics when it comes to people being in debt.

And Bruce, you’re mentioning that the consumer debt is at a level that we haven’t seen before. So I’m assuming that we’re going to see a lot of people looking for more financial help than we’ve seen in a long time. Would you agree to that?

Bruce Duggan 19:35
I think that’s certainly what the trends would say. When COVID hit three years ago, when COVID hit, every level of government, especially the federal and, and to a lesser extent provincial governments pushed a lot of money out the door and people who had debt at that point it was actually kind of surprising.

They took a lot of the money that governments gave them and paid down their credit cards and reduced their debt, which wasn’t exactly what people expected, wasn’t what economists expected. They thought, oh, they’ll just spend money and certainly people did, but they also paid down their debt. 

Well, it’s three years on and the debt is up again. And that wave of debt going up usually indicates that there’s going to be a certain percentage of people, almost always through no fault of their own, who cannot manage that current money in and money out equation.

Wayne Kay 20:33
Wild. What we’re going to see, I think we’re going to be in for a wild ride. This has been a very interesting discussion of what’s going to happen and where we’re going to go. So let’s kind of do some final wrap ups here. Bruce, your thoughts on what do you think and what are you seeing?

Bruce Duggan 20:49
Well, I think that my experience of teaching that started three years ago. Within a week we went from in person teaching in small classes to online teaching. And I remember talking to high school students who, that happened to them and to elementary students, that happened to them too. 

And for the first couple of months we all thought, okay, we can make this work, it’ll be okay. It’s not much worse than being in person, but it pretty quickly became clear that you don’t learn as much. There is a thinness, something wrong with a distant connection that can only really be dealt with in a personal, direct, human to human, face to face in the same room connection. 

So we’ve seen probably a year of lost education for high school and elementary school students and that need for the human direct connection to spend time with people in three dimensions I think is way more important than we thought.

And I was thinking about this. If someone comes into a Trustee, if you think about the difference between someone going into a Trustee’s office and going into any other sort of purchase or service that they’re looking to get like to buy insurance. You’re not usually frustrated or upset when you walk into an insurance company place and you want to buy car insurance. 

But if you’re going into a trustee or a Trustee’s office, you’re already in emotional distress. You already know things are tough, and to have an actual human being there or two that you can spend some time with and figure out what to do. I think it is way more important than maybe we would have thought before COVID.

Wayne Kay 22:42
Yes, absolutely. I feel bad for the University students, and my son was one of them who went to school and then had to try to learn online, and he just missed out on an experience that most of us have been fortunate enough to go through. 

So, yes, what you’re saying is so true. And when you’re dealing with emotional things, like being in a financial situation where you’re not sleeping and the stress is overtaking your life, do you really just want to connect with somebody on a screen? I think it’s something about feeling Leigh’s emotion when you’re in the same office.

Leigh Taylor 23:20
I would agree with that as well. And we got a really good lesson over the COVID experience about how important this is. Communication isn’t just verbal communication. It’s that sort of unseen, not necessarily recognized connection between two people. I think that’s really important.

Wayne Kay 23:41
Leigh, final words from you to wrap this up.

Leigh Taylor 23:45
Well, I like the conversation we had about the problems with going online, whether it’s for services or Trustee services or buying clothing, because while online seems very convenient at the time, there always seems to be a price that’s going to be paid for that convenience. It may not happen on your first purchase, but you can be guaranteed that you will not be happy with all of your purchases. I think that’s something fair for people to consider.

Bruce Duggan 24:15
I would say that as far as we can tell, the future, and who really can tell the future. This year is going to be another hard year, but it’s not going to last forever through these cycles. 

We went through it in 2008. We go through them about every 5, 10 years where you go through a hard period and then you come back out. You come out the other side. And the Canadian economy and people working in Canadian business, I think, are determined and resilient enough that, yes, we can get through the other side, but we shouldn’t pretend that it’s going to be easy.

Leigh Taylor 24:53
But during the whole process, remember that there’s lots of people out there to help you. Your friends and neighbors are having the same sorts of problems that you are, and there are professionals out there to help you get through this whole situation, so look for them.

Wayne Kay 25:07
Terrific. Well, Bruce and Leigh, thank you both for your time today and this wonderful discussion.

Wayne Kay 25:13
Thank you, Wayne.

Bruce Duggan 25:14
Pleasure. Talk to you soon. Thanks.

Wayne Kay 25:16
Well, my guest today, Bruce Duggan, Associate Professor of Management and Providence Buller School of Business, and Leigh Taylor from LCTaylor Licensed Insolvency Trustee.

You can get more information and schedule a free consultation if you want some financial help at lctaylor.com. 

And that’s it for today’s Debt Matters podcast. Now, make sure you subscribe wherever you get your favorite podcast from. And of course, for more information, you can always check out debtmatters.ca. Thanks for listening.

About Leigh Taylor

Leigh began his career as an Official Receiver with the Office of the Superintendent of Bankruptcy. He is a Certified Professional Accountant and attained his license as a  Licensed Insolvency Trustee in 1980.  

LCTaylor’s mission is to help people get out of debt through compassionate care and professional service. With over 40 years experience in the insolvency field, Leigh and his staff have helped over 50,000 Manitobans solve their debt problems.  

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