Why Local Businesses Are the Lifeblood of Wise Communities

I first came to understand the true value of local businesses when I was consulting on an ambitious project in Winnipeg’s Exchange District. The vision was bold: to create an urban lab in one of the country’s best-preserved historic neighbourhoods. We wanted to integrate sustainable technologies into the district’s beautiful, solidly built heritage buildings—not as an afterthought, but as proof that these places could be part of a low-carbon future.

The more we explored the potential of these buildings, the more we realized that sustainability wasn’t just about technology or materials. It was also about people—and the local economy that connected them. That’s when I came across the work of the Institute for Local Self-Reliance (ILSR). Their research changed the way I thought about economic development and the role that small, independent businesses play in making communities not just livable, but resilient.

In Winnipeg, we started with buildings, but we quickly found ourselves asking a bigger question: how do we create a neighbourhood—and by extension, a community—that can sustain itself over time? The answer, in large part, came back to local businesses.

One of the most striking lessons I learned through the ILSR is something called the local multiplier effect. It’s a simple idea with profound implications. When you spend money at a locally owned business, nearly 50 cents of every dollar stays in the local economy. It circulates through local wages, local suppliers, service providers, and charities. Compare that to chain stores, where only 15 cents of every dollar stays behind. The rest flows outward—back to head offices and supply chains with no stake in the life of the community.

On the ground in Winnipeg’s Exchange District, this concept played out in real time. The cafés, bookshops, tech hubs and design studios that lined the streets weren’t just tenants in old buildings; they were key players in the district’s renewal. The people who ran them lived there. They were the ones who sponsored local teams, sat on committees, and volunteered at neighbourhood events. Their success was woven into the success of the community itself.

Local businesses don’t just make economic sense—they create places people love. They’re the reason a street feels vibrant instead of vacant. They give a neighbourhood its character and its heartbeat. They’re also nimble, creative, and deeply connected to the places they serve.

That’s not something you can replicate with international chains or corporate brands. Those businesses tend to be built for efficiency, not for connection. They make decisions in distant head offices, where the nuances of a small town or historic district don’t always factor into the equation. All of this made even more consequential as Canadians seek to buy local and to buy Canadian in the face of the insanity coming from south of the border.

I’ve often said that place-based wealth—the accumulated value of a community’s natural, cultural, and historical assets—is one of the most powerful tools a town or city has for long-term resilience. Local businesses are a key part of that wealth. They make our communities distinct and offer a competitive edge in a world where remote work has untethered talent from geography.

At Wise Cities Consulting, we help communities harness this place-based wealth. That means recognizing the value in what already exists—whether it’s a historic main street, a beautifully designed building, or a local bakery that’s been there for three generations.

Supporting local businesses isn’t just about nostalgia; it’s about making wise economic choices. Municipalities can—and should—take deliberate steps to foster strong local economies. Reducing barriers for small businesses, supporting main street revitalization, and policies that prioritize local procurement all play a role in keeping wealth circulating close to home. Additionally, with all of the pressure applied from multinational chains that continue to blite the edges of our towns and drain our cores, municipalities and their provincial partners should incentivize all government services to locate in the downtown cores of towns and cities. Liquor stores, post offices, town services, all should be focused in downtown areas to help encourage residents to visit their downtowns and, in turn, support local businesses.

When I think back to our work in Winnipeg, I’m reminded that communities thrive when they invest in themselves. It’s not just about preserving the past; it’s about building a future that’s grounded, resilient, and uniquely their own.

Every dollar we spend is a choice. It’s a vote for the kind of community we want to live in. And when we choose to spend that dollar locally, we’re investing in a future and a country that benefits us all.