Fund merger fears
Thursday, April 7, 2016
by SUSAN MANN
The Ontario government has decided to merge the long-running Rural Economic Development funding program into the Jobs and Prosperity Fund, and many in the province’s agricultural sector fear the move is a shell game designed to slash funding to rural areas.
However, a spokesperson with the Ontario Ministry of Agriculture, Food and Rural Affairs — the ministry that has operated the program in its various forms since the 1990s — maintains the merger is motivated by the need to achieve administrative efficiencies.
Agriculture ministry spokesperson Bianca Jamieson said by email on Thursday that the Drummond Commission recommended moving all business support programs under one umbrella. “That’s exactly what we’re doing with the RED (rural economic development) program.”
The government is committed to supporting rural Ontario, she wrote. “Program designs may change but support for rural communities and businesses remains constant. The goal is to deliver support programs in the most efficient way.”
On its Rural Economic Development program page, the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) announced in March that as part of this year’s provincial government budget the current intake of applications to the program, which opened Jan. 16, was suspended. The ministry also said it intends to integrate the economic development program with the Jobs and Prosperity Fund to “improve coordination of regional support programs.”
The ministry’s notice said, “rural communities and businesses will continue to have access to funds as we move forward with the restructured program.” No details were provided.
Programs compared
Since 2003, Ontario has spent more than $186 million to fund 594 projects under the cost-share granting program, generating $1.2 billion in new economic activity and creating and supporting more than 37,000 jobs, Jamieson said. It was popular and attracted a high number of applicants. “The amount of funding requested often exceeded the amount of funding available,” she said.
Progressive Conservative agriculture critic Toby Barrett, the MPP for Haldimand-Norfolk, said the program was actually established in the 1990s by the former Tory government and was the outcome of a task force that had been set up to find a way to halt rural decline.
Launched in January 2015, the Jobs and Prosperity Fund provides $40 million a year to support agricultural businesses through the Food and Beverage Growth Fund, another ministry document said. OMAFRA administers the fund on behalf of the agri-food sector, said Norm Beal, CEO of Food and Beverage Ontario.
He said food and beverage companies were big users of the rural economic development program, particularly for smaller projects located in rural Ontario. Changes to the program “will have a definite impact” on the association’s members but Beal said he won’t be able to determine what those are until he understands how the new program works.
He said he’d be really concerned if the provincial agriculture ministry doesn’t administer the new program because “where would the agri-food focus be.”
He also questions the changes and why the government didn’t consult with agricultural stakeholders before announcing them.
The decision to suspend the program appears to be sudden and came just four months after RED’s relaunch.
As recently as in a Jan. 11, 2016 letter to Premier Kathleen Wynne, Ontario Agriculture Minister Jeff Leal noted the rural economic development program was reviewed to ensure it continues “to effectively support rural communities and businesses.” The program was re-launched on Oct. 2, 2015. The letter is Leal’s update to Wynne about his progress on areas she prioritized in her 2014 mandate letter to him.
(Wynne also praised the program in the mandate letter to Leal, saying he was to work with ministries and other partners to deliver effective programs, such as the rural economic development program.)
Change will shortchange rural Ontario says CFFO
A spokesperson for the Christian Farmers Federation of Ontario said rural Ontario would likely be shortchanged as a result of the switch.
In a written document, Suzanne Armstrong, federation research director/board and committee services manager, said because the Jobs and Prosperity Fund is not specifically focused on rural areas, urban areas are likely to be favoured for available funds.
Overall, the change will severely restrict and reduce funding support for economic growth in rural areas compared to support previously provided under the rural economic development program, she said.
Furthermore, the jobs fund is restricted to private sector organizations and industry partners, she said. Farmers, community organizations, rural municipalities and others who previously could qualify for funding under the economic development program, are left out.
Armstrong also noted the jobs fund emphasizes large projects of $5 million or $10 million in eligible project costs. That means mainly large businesses will benefit from the fund. The rural economic development fund, by way of contrast, supported many smaller scale projects done by small businesses, economic development organizations and municipalities. (See “Fund’s restrictive terms” below)
‘It’s very difficult to follow the money’
Progressive Conservative agriculture critic Toby Barrett, the MPP for Haldimand-Norfolk, launched a vocal campaign last month questioning the ministry’s intentions as it melds the economic development program and the jobs fund. In particular, he wants to know if the $14.5 million spent annually as part of the economic development program will be maintained in the new, larger Jobs and Prosperity Fund.
Barrett wonders if the economic development program will be cut and draws on the example of the province’s decision to discontinue the Local Food Fund. Barrett said he was told during question period in the Ontario Legislature the Local Food Fund was being continued under Greenbelt program funding. “That’s not going to help the Slate River Valley near Thunder Bay” or other parts of Ontario located outside the Greenbelt, he notes.
“It’s very difficult to follow the money,” he said. (See “Following the money” below)
Timiskaming-Cochrane MPP John Vanthof, the New Democratic Party’s agriculture critic, said he doesn’t think it’s a good move to have the economic development, employment and infrastructure ministry oversee funding earmarked for rural economic development.
The provincial agriculture ministry “had a better handle on what is needed for rural Ontario” compared to the economic, employment and infrastructure ministry, he said.
He added that details about the changes are sketchy and they haven’t seen proof yet the rural economic development program funding is being moved rather than just being cut.
Merger may be positive but more information needed: OFA
The Ontario Federation of Agriculture has a different take on the situation.
General manager Neil Currie said, “it looks to us like it’s just a consolidation to improve the administration of two very similar activities, which is a good thing.”
The federation is waiting for more details “which we haven’t seen yet,” he said. “We just want to make sure that the money is still readily available and the terms haven’t changed significantly in terms of eligible projects.”
The Rural Ontario Municipal Association is another group seeking more information. Chair Ronald Holman, Mayor of the Township of Rideau Lakes, said by email the Jobs and Prosperity Fund does focus on key rural economic priorities. One of its four streams is focused on growth in the food and beverage sector.
“We hope to have a better sense of what this will mean for rural communities in the coming weeks as the provincial budget’s direction is worked on for implementation,” he said.
Asked to respond to concerns about whether the $14.5 million allocated annually to RED projects will remain under the restructured program, Jamieson said “we measure results and success not by the dollar amount spent but by the positive impact.”
The agriculture ministry is working with the Ministry of Economic Development, Employment and Infrastructure to ensure support programs are delivered efficiently and “to support the agri-food sector and economic growth in rural communities,” she said.
Details of the restructured program will be announced as soon as they become available, she said.
Norm Ragetlie, Rural Ontario Institute director of policy and stakeholder engagement, said the rural economic development program absolutely made a difference for rural communities, particularly since there aren’t as many local sources of money in rural areas for community economic development projects compared to larger urban areas. Typically, successful applicants received up to 50 per cent funding through the program for their projects.
Now that the program has been suspended, people would have to reconsider “how they can continue to do the kinds of projects that were funded,” he said.
Emery Huszka, National Farmers Union – Ontario president and Region 3 coordinator, said there’s nothing wrong with the government wanting to improve efficiencies. However, he hopes the change “doesn’t translate to less priority for rural Ontario because we’re already suffering from neglect.” BF
Fund’s restrictive terms puts it out of reach of most Ontario food and beverage funds
by SUSAN MANN
The association representing Ontario’s food and beverage manufacturers has asked the Ontario government to reduce the monetary threshold for companies accessing a funding program designed to support food, beverage and bioproducts projects.
As part of the Food and Beverage Growth Fund, applicants must have projects with more than $5 million in eligible costs, and that means the project must have a value of $25 million or more, says Norm Beal, CEO of Food and Beverage Ontario. He noted there aren’t many companies who can use the program with that requirement, although there have been some larger businesses that have managed to take advantage of it.
Beal said as a member of the Ontario Agri-Food Growth Steering Committee he took exception to that threshold and requested it be reduced. “One of the recommendation of the growth steering committee was (the government) lower that threshold.”
Co-chaired by Deb Stark, deputy agriculture, food and rural affairs minister, and Amy Cronin, Ontario Pork board chair, the committee identified future opportunities for growth in the industry.
Ontario agriculture ministry officials didn’t provide a response to Beal’s concerns in time for this posting.
UPDATE: Tuesday April 12, 2016 — “The only financial threshold for the Jobs and Prosperity Fund: Food and Beverage Growth Fund, is that total eligible project costs must be more than $5 million,” said Bianca Jamieson, a spokesperson with the Ontario Ministry of Agriculture, Food and Rural Affairs, in an email on Tuesday. “We are currently working with the Ministry of Economic Development, Employment and Infrastructure to explore how we can best deliver support programs in the most efficient way to ensure economic growth in our rural communities. Details will be announced as soon as they become available.” END OF UPDATE
Meanwhile Progressive Conservative agriculture critic Toby Barrett said the government’s food and beverage fund creates winners and losers. Often when large companies get government grants, they put smaller competitors in their same sector out of business.
“This (the food and beverage growth fund) looks like it is money for the big” companies, he added.
Barrett said he supports grants that are provided to a sector of the economy, but is opposed to funding for a particular company because it puts other businesses doing the same activity at a disadvantage.
Timiskaming-Cochrane MPP John Vanthof, the New Democratic Party agriculture critic, said Beal’s concern about only large companies being able to access the Food and Beverage Growth Fund is valid.
“There would be lots of companies that would be excluded under” the parameters of the food and beverage program.
He also agreed rural Ontario may be shortchanged with the integrated program. “The RED program was focused on rural economic development. Whenever you take a little pot and throw it into a bigger pot, you run the risk that your little pot is just going to disappear.” BF
Following the money: the Greenbelt and Local Food funds
by SUSAN MANN
Both of Ontario’s agriculture critics have raised concerns about the loss of the Local Food Fund. Progressive Conservative agriculture critic Toby Barrett, the MPP for Haldimand-Norfolk, said he was told during question period in the Ontario Legislature the Local Food Fund was being continued under Greenbelt program funding.
In a Thursday email, Christina Crowley-Arklie, Leal’s press secretary, offers a similar explanation. She said: “Building on the success of the Local Food Fund, the province has allocated $6 million over three years to the Greenbelt Fund which was announced last October 2015, to continue to help increase awareness of, demand for and purchases of local food. The Greenbelt Fund is a non-profit organization that helps strengthen agriculture in Ontario’s Greenbelt and across the province by supporting projects to increase the amount of local food consumed in Ontario.”
However, according to the Greenbelt Fund website, annual reports and a 2013 transfer payment agreement between the province and the fund obtained by Better Farming through a Freedom of Information request, the $6 million the provincial government issued to the Greenbelt Fund in 2015 represented a renewal of a longstanding agreement between the two bodies that had first been established six years ago.
The money was not, at the time of its issue, regarded as a continuation of the Local Food Fund funding but instead considered to be earmarked for a similar but unconnected initiative.
For example, asked in June 2015 if there was an overlap between the activities of the Greenbelt and the Local Food Fund, Burkhard Mausberg, the fund’s CEO, said: “I wouldn’t necessarily say that. I don’t think the Local Food Fund makes any significant investments in the local food distribution system. I wouldn’t say the Local Food Fund has made any significant investments in building food hubs. Part of the things that we have done is looking at regional food hubs that allow aggregation of product to enter the market.”
Indeed, by 2014, a year after the Local Food Fund had been announced, the Greenbelt Fund had already paid out more than $8 million for projects that focused on connecting the broader public sector with local food networks.
Moreover, the 2015 payment arrangement to the Greenbelt indicated a cut to that initiative as well. In another 2015 interview, Mausberg noted that the province’s overall allocation was “slightly reduced” compared to what the fund had received under the 2013 agreement. He estimated the loss to be about $240,000 over the funding agreement’s 30-month span. BF
— with files from Better Farming staff