OFA study quantifies farming's economic impact on Ontario
Thursday, December 5, 2013
by SUSAN MANN
There’s no doubt about it, Ontario’s farming industry makes a huge splash in the province’s economic pool.
A new study released at the Ontario Federation of Agriculture convention last month pegs expenditures by Ontario farmers at $11.8 billion. That generates $26.6 billion of economic activity throughout the province, according to the Economic Contribution of the Ontario Farm Sector report done by John Groenewegen of JRG Consulting Group.
The direct farm sector contributes $13.7 billion in province-wide value-added GDP, which is two per cent of Ontario’s GDP. Mark Wales, who was re-elected to his third consecutive term as federation president at the convention, says the entire industry is bigger than that “by the time you go from right before the field to the fork.”
The farm sector output contributed to an estimated 157,829 jobs throughout the Ontario economy. And all levels of government received $3.9 billion in tax revenue because of the farm sector output and associated economic activity, according to the report.
Neil Currie, federation general manager, says the report is an update of an earlier one done by Groenewegen in 2010. “The numbers were getting a little old. We wanted to refresh it,” he notes.
The numbers are bigger this time around but there weren’t any surprises in the report. It’s “basically showing how important farming is” to Ontario’s economy, he says.
The federation is using the study to show the Ontario government the economic impact of farming and agri-food. Currie says while he hasn’t seen the updated numbers for the auto industry, “we are saying agri-food is the biggest industry now” in Ontario.
With the designation as an economic engine for the province, Ontario Premier and Agriculture Minister Kathleen Wynne has challenged the agri-food industry to double its growth by 2020 and create 120,000 new jobs. Currie says the federation has started working on this. It’s going to “require a lot of planning on our part and coordinated efforts to work with government in order to put a strategy together.”
The federation board is starting next week to put the strategy together. Wales says the industry can grow both GDP and jobs by having more Ontario-based processing.
Farmers can get more yields per acre and “those sorts of things” but those initiatives don’t necessarily create more jobs. “If you get 200 bushels per acre of corn this year and you get 250 (bushels per acre) next year, you haven’t created any more jobs at the farm level,” he says. “It will help your bottom line if you’re able to take some of that corn and do something value-added with it. That’s where you get the real improvements to income, jobs and therefore GDP.”
Joining Wales on the executive this year are newly elected vice-president Keith Currie of Collingwood and re-elected vice president Don McCabe of Inwood. Debra Pretty-Straathof of Arnprior was elected to the board as the fourth executive committee member.
Wales says among the federation’s priorities this year are: ongoing regulatory reform and continuing to push for an expansion of natural gas infrastructure for rural Ontario. The federation has talked to all three provincial political parties about gas infrastructure expansion and they all recognize it’s a long-term project that must begin now. “It will take us 20 years to get the full benefits,” he says.
Wales sees the inclusion of natural gas infrastructure expansion in the government’s long-term energy plan, released this week, as a commitment by the government to help move the matter forward. People are so focused on high electricity costs in the long-term energy plan but “they don’t recognize we can save far more money by getting everybody in rural Ontario to have access to natural gas,” he says. “The saving there far out weigh what we spend on electricity.”
Expanding natural gas infrastructure will also attract processing to rural Ontario. Processors will “go where the gas is. They won’t go where the gas is not,” he says. BF