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Consultant warns Fort Frances of escalating losses.

Consultant warns Fort Frances of escalating losses

If things do not change, the economy of Fort Frances will lose $14 million to American retailers annually, according to the latest draft of a consultant's report.

The report compiled by Toronto-based consultants John Winter and Associates Ltd. notes that the community currently loses about $7 million per year to retailers on the other side of the border.

"And the amount of out-shopping will double in two years," predicts Frank Meyers, the economic development co-ordinator for Fort Frances.

According to the report, Fort Frances residents spend 32 per cent of their dining-out money across the border. In addition, they make 27 per cent of their gasoline purchases, 20.5 per cent of their toy purchases and 16.6 per cent of their home improvement purchases in the U.S.

The report was commissioned to address the problem of "out-shopping" which plagues several Canadian border communities.

According to Meyers, the draft was sent back to the consultants for clarifications and corrections, and the final version is expected early this month.

Meyers says there has been little reaction from the community's merchants.

"They're still digesting it," he says. "A lot of them haven't made up their minds (what to do), and others are already talking to their wholesalers."

The report recommends that local merchants reduce the cost of their goods by finding new suppliers in places other than southern and eastern Ontario.

Most retail goods from the United States are presently shipped to southern Ontario where they are warehoused before being shipped to the stores. The report does not contain any estimates of the cost savings of obtaining the goods directly from the U.S.

The report also recommends Fort Frances retailers search for goods which are not available in International Falls, Minn.

It identifies the cost of municipal government as a significant burden on the Canadian retailer.

"The cost of municipal government is twice as high here as it is in the U.S.," says Meyers. "The report looks at the operations of the governments, and their costs show up in business expenses."

The report attributes much of the cost disparity to the quality of child care, welfare, police protection and fire protection we enjoy in Canada.

Meyers points out that south of the border social services such as old-age homes and day-care centres are privately-run, and fire departments in the smaller communities are often volunteer operations.

One of the items which is expected to be clarified in the final document is a suggestion involving gasoline, considered to be the catalyst for most out-shopping.

The consultant suggests that the community's service stations sell gasoline at prices comparable to their U.S. counterparts. The suggestion calls for the stations to reduce prices on a rotating basis.
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Title Annotation:John Winter and Associates Ltd.'s report on Fort Frances, Ontario losing money to American retailers
Author:Krejlgaard, Chris
Publication:Northern Ontario Business
Date:Apr 1, 1991
Previous Article:Timmins office.
Next Article:The north needs a new image.

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