Today, the Windsor-Essex Regional Chamber of Commerce (WERCC) in partnership with the Ontario Chamber of Commerce (OCC) released the report Fertile Ground: Growing the Competitiveness of Ontario’s Agri-food Sector, which presents a series of recommendations designed to address barriers to the competitiveness of the agri-food sector in the province. As one of the most significant economic drivers in the province, the agri-food industry employs 1 in 9 Ontarians and represents $36.4 billion in GDP.
This report in part stems from OCC Policy Analyst Kathryn Sullivan’s July 2016 visit to Windsor-Essex, where she and WERCC President & CEO Matt Marchand met with local wineries, food processors, and agriculture stakeholders to gather information.
In 2013 Premier Wynne challenged the agri-food industry to double its annual growth rate and create 120,000 jobs by 2020. However, Ontario is behind the Premier’s target and this is largely reflective of the serious pressures that agri-businesses are experiencing: foreign competition and rising input costs, rising electricity prices (Ontario has seen a nearly 400% increase since 2004) and the closure of nearly 60 food processing plants and job losses of 12,379.
Agri-business has long felt overwhelmed and inhibited by a regulatory framework that is overly prescriptive and difficult to navigate. In order to comply with regulations, producers and processors are required to divert substantial resources to meet obligations. This affects their bottom line and their capacity to invest in growth. Ontario agri-businesses are experiencing increased pressure to adapt processes to large-scale policy reform, including the introduction of the cap and trade system, waste elimination legislation, and delivered electricity costs that exceed those of competitor jurisdictions.
“In Windsor-Essex, agri-food stakeholders cited increased costs, regulatory pressures and the availability and reliability of natural gas as a barrier to growing their competitiveness,” said Marchand. “Ontario has the largest net loss of plants in the country. Locally, we’ve lost $450 million in investment in two examples alone: Golden Acre Farms and Nature Fresh Farms who set up plants in Ohio instead.”
Among the recommendations presented in the report, the WERCC identifies the following as priorities to be addressed in the short term:
1. Work with industry and all levels of government to establish a regulatory “concierge service” to assist industry in understanding, navigating and achieving compliance with relevant regulatory requirements. In Ontario, agribusinesses are significantly affected by decisions made by over 15 government departments.
2. Publicly release economic impact assessments of policy initiatives that could affect the agri-food sector.
3. Work with industry and post-secondary institutions to ensure that program offerings remain responsive to the needs of agricultural producers and processors.
4. Access to reliable and adequate natural gas year-round.
5. Urge Canadian government to pass a PACA (Perishable Agricultural Commodities Act)-type legislation.
“The health and viability of the entire industry depends on the ability of producers and processors to compete on a level playing field,” said Marchand. “In 2015, Ontario agri-food trade exceeded $14 billion. The Province must strive to do its part to enable the success of Ontario’s agri-food sector.”
Canada is the world’s fifth-largest exporter of agri-food product. In 2014, Canadian agri-food export sales totaled $51.5 billion, with Ontario representing $12.5 billion. Approximately 75 percent or $10.46 billion of Ontario agri-food export goes to the U.S.
In order to attract, retain and grow agribusiness, the WERCC is looking for government to work collaboratively with the agri-food sector to set goals for Agriculture Week 2017 that support the industry in meeting the Premier’s Agri-food Challenge.
“Agriculture is the number one or number two economic driver in Ontario, depending on how you measure it,” said Marchand. “The WERCC, in partnership with the OCC, is committed to working with government and agribusinesses to enhance the competitiveness of this sector.”