It was only a few years ago that outshopping was emptying local stores and undermining the retail sector in just about every border town, not only in Northern Ontario but also across Canada.
Then something happened. It may have been a further drop in our dollar that made shopping in the U.S. more expensive, or just more choices of products and improved service that made the difference. Or maybe a combination of all the above.
One thing is certain, as outshopping declined, our own retail sector improved substantially, making it one of the bright spots of the local economy.
A similar, but less noticeable “outshopping” has also been going on for years and it has had a serious impact on our ability to develop a stronger, more diversified economic base.
I am talking about the need to feel that unless we go outside to get our products or services, we are not getting the best value for our dollars (this includes human resources personnel, consultants, and trades).
There are many large institutions in our region with a lot of purchasing power.
Their procurement policy will dictate that given equal quality and service, the lowest cost will be accepted. In a properly balanced competitive environment, we all benefit from such a scenario.
However, structural changes have thrown the balance out of our economic environment and are having a destabilizing effect in our northern economy.
Signs are evident in continuing youth out-migration and declining tax assessment base (i.e. economic base).
I suggest that the time has come for revisiting a policy that may not be serving the present needs of our region. A good place to start is our municipal government, with its vast purchasing power, that has the potential to play a leading role in this area.
I am not talking about undermining the present procurement policy, but fine tuning it.
The policy should simply state: “everything else being equal (i.e. availability, quality, price, service, qualifications, etc.) we will shop/hire locally first”. By locally, I mean within the region first.
Such policy, openly expressed and articulated, would have prevented a lawsuit that was launched against the City of Thunder Bay a couple of years ago when it decided that it would favour a local contractor even though the bid from the out of town one was lower by a very small amount ($3,000).
The contract was worth $1.2 million and the city settled out of court for $210,000. A similar situation was developing with the bidding on the secondary sewage treatment plant.
If the procurement policy had been changed, local contractors would have been encouraged to bid and probably have a good chance of winning one of the largest contracts the city has ever tendered ($51 million).
With the contract eventually being awarded to an out of town company, the local trades mounted a lobby campaign with City Council to ensure that at least a fair wage policy would be included in future awards (i.e. contractors would be prevented from hiring workers at lower than prescribed fair-wages to ensure they would not low-ball the bid, and give the local contractors a fair chance).
While the above action helped, I believe it did not go far enough in recognizing that we need a new kind of thinking in solving our economic problems.
A good example is the search for executive level positions for local municipalities, at times requiring at least 10 years experience in public service.
This requirement alone would probably exclude many well suited candidates from our region to even apply and be considered for the position.
Why not a combination of public and private experience? Why do decision makers not understand the implications of their decisions?
Do we still suffer from a small town mentality, or do we really believe that we do not have the talent and resources to be the best.
In Northwestern Ontario we have world class talent that is competing against the best in the world and winning. But we need to broaden that base.
A well-balanced procurement policy that includes broadening our economic base as one of its objectives will create new jobs and opportunities for local people, and will go a long way in ensuring a more prosperous future for us all.
Frank Pullia is Principal of Pullia Consulting and a former Councillor. He can be reached at 807-474-8294 or via e-mail at frank@frankpullia.com