2021–2024 Agricultural Research Institute of Ontario business plan

Overview

The Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) is the provincial lead overseeing Ontario’s thriving agri-food industry. OMAFRA works to advance the Government of Ontario’s efforts to promote a more competitive and productive agri-food and agri-products sector, as well as economic growth and opportunities for rural Ontario.

Keys to achieving success include:

• robust protection and assurance systems in the agri-food sector (such as food safety and animal, plant and human health)
• providing stewardship of Ontario’s capacity to produce food (such as soil and water quality, climate change)
• fostering economic development of the agri-food sector and rural Ontario (such as food processing, bioproducts)

The Agricultural Research Institute of Ontario (ARIO) is a provincial agency reporting to the Minister of Agriculture, Food and Rural Affairs. ARIO’s mandate includes recommending areas of research for the betterment of the agri-food sector and to stimulate interest in research to support production efficiency and marketing of agricultural products. This three-year business plan outlines ARIO’s commitments on its strategic direction.

ARIO supports Ontario’s goal of maintaining its competitive advantage in agri-food and agri-products research and innovation, and concentrates its efforts in four ways:

1. Providing strategic advice to the minister on agri-food and agri-products research and innovation.
2. Implementing the ARIO’s Infrastructure Strategy to modernize the province’s agri-food and agri products research and innovation physical and virtual infrastructure.
3. Promoting the Ontario agri-food and agri-products research and innovation system.
4. Providing administrative and managerial oversight of open research programs.

ARIO priorities

• ARIO’s Infrastructure Strategy provides a plan for modernizing Ontario’s network of agri-food research infrastructure to support modern platforms focused on consumer outcomes.
• The Minor Capital Program supports the entire infrastructure portfolio, including repairs, life cycle renovations and program-related improvements and repairs, and is implemented by the University of Guelph as ARIO’s property manager for the research stations. In the next three years, there are plans for multiple minor capital projects that address livestock and human health and safety standards and enhance the value of the assets.
• Knowledge translation and transfer activities enable researchers to share information on project results. Adapting to the COVID‑19 environment, presentations have been offered online which has captured a wider audience and broader engagement. This practice will continue as part of ARIO’s strategy to disseminate research results to as many interested stakeholders as possible.
• ARIO is committed to providing the best advice to the minister on strategic direction, and to promote the value of the research infrastructure and programming funded through ARIO to our stakeholders and the broader public.

Upcoming plans

• The minister’s mandate letter to ARIO outlines expectations for the agency for the upcoming year. Along with ARIO specific direction to focus on property management, strategic advice, the promotion and advocacy of Ontario’s agri-food and agri-products research and innovation system, and efficient and effective administration of research programming, ARIO is expected to contribute to government wide priorities. These priorities include expenditure management, transparency and accountability, risk management, data collection and digital delivery options for clients.
• The COVID‑19 pandemic initially impacted research at ARIO stations, however the University of Guelph was able to quickly implement COVID‑19 protocols that has allowed research activities to resume without significant delays.
• The review and renewal of the Ontario Agri-Food Innovation Alliance with the University of Guelph (the Alliance) could identify potential changes to the Property Management Schedule ARIO research stations. A review of the Alliance will be completed in 2021-2022 and any recommendation may be included in the renewed agreement.
• The Canadian Agricultural Partnership (CAP) expires on March 31, 2023. Ontario will be working with its federal-provincial-territorial (FPT) partners to develop the next policy framework of shared priorities for the agri-food sector. This will lead to the negotiation of a renewed FPT Multilateral Framework Agreement and a Bilateral Agreement between the federal government and Ontario. This renewed policy framework may create opportunities for additional investment in the research programs and ARIO research infrastructure.

ARIO membership and funding

• ARIO’s membership is comprised of up to 15 members appointed by the Minister of Agriculture, Food and Rural Affairs. In 2020-2021, six new members were appointed to ARIO, enhancing the capacity of the agency. ARIO members routinely complete a skills matrix, where they identify the skills they contribute to ARIO, and provides the ARIO secretariat with the opportunity assess potential skills gaps. The ARIO Chair, in consultation with the secretariat, continues to recommend prospective candidates to the minister that will expand the membership’s diversity based on gaps identified from assessment of the members skills matrix.
• Funding for major capital projects is requested and approved annually as part of OMAFRA’s multi-year planning process.
• ARIO Secretariat is comprised of OMAFRA employees within OMAFRA’s Research and Innovation Branch. The total estimated cost of the Secretariat is $1.4 million annually.
• Performance measures are outlined in the ARIO Memorandum of Understanding.

Key accomplishments

ARIO Infrastructure Strategy

ARIO’s Infrastructure Strategy (the Strategy) provides a plan for modernizing Ontario’s network of agri-food research infrastructure. The Strategy’s objective is to promote and support a system of modern, state of the art, integrated, multi-disciplinary research and innovation platforms focused on addressing consumer, market and economic outcomes. The expected benefits of the Strategy include driving innovation through the creation of new and value-added products, developing solutions to current and emerging issues, and validating new technologies and approaches for Ontario.

As the province’s economy recovers from COVID‑19 impacts and the government focuses on its fiscal realities, research and innovation will be critical to maintaining and strengthening the competitiveness and sustainability of the sector both provincially and globally. Modernized, relevant research infrastructure enables scientific excellence, knowledge dissemination and industry adoption, all of which are necessary for the economic growth of the agri-food and agri-products sector.

ARIO’s objective to modernize research infrastructure and drive operational efficiencies across the research station portfolio through consolidations of facilities is supported by the agri-food industry. Recent projects have seen industry partners provide 20% of the cost to build/modernize the research stations. It is anticipated that this partnership and funding commitment will continue as new projects are approved.

ARIO projects

Evidence of the success of reinvestment in research infrastructure can be seen in various ARIO projects across the province:

• A new Agronomy Research Services building at the Ontario Crops Research Centre in Winchester was completed in spring 2019. The new building supports the field crops research needs of eastern Ontario and has allowed ARIO to dispose of a wide range of older field crops buildings which were expensive to maintain and past their useful lifecycle.
• Site preparation and construction of an Agronomy Research Services building at the Ontario Crops Research Centre in New Liskeard began in 2020. This build will allow for the proposed disposition of a wide range of older field crops buildings which were expensive to maintain and past their useful lifecycle as research facilities.
• Construction of a new Ontario Turfgrass Research Centre and relocation of the accompanying research plots to the University of Guelph is anticipated to be complete by early spring 2021. The relocation of turfgrass research allows for the proposed disposition of old facilities and lands within the City of Guelph and results in a single modern and efficient facility.
• Construction of the new Ontario Beef Research Centre cow/calf facility at the Elora Research Station was completed in September 2019 and is now operational. This state-of-the-art building for beef research, in conjunction with other planned builds to renew feedlot and feed storage capacity, will allow for the consolidation of the province’s beef research herd to Elora. This construction allows for the proposed disposition of several older beef buildings and structures no longer suitable for research purposes.
• Advanced design of the new Ontario Swine Research Centre at the Elora Research Station commenced in September 2019. The new centre at Elora will replace the present facilities at Arkell which are well past their useful lifecycle and costly to operate and maintain. The planned research facilities will more closely resemble the current state of industry production taking place in Ontario, leading to better applied research outcomes for the sector.

The ongoing work and completion of these major projects is evidence of how the ARIO Infrastructure Strategy is working effectively to modernize the research station portfolio and establish state of the art research infrastructure in the province with strong industry participation in research planning, program oversight and capital investment.

Property Management

Under the terms of the 2018 Alliance Agreement between the University of Guelph, ARIO and OMAFRA, the University operates and provides property management services at most sites. The Vineland Research and Innovation Centre (VRIC) operates and is the property manager for the Vineland Research Station. The agreements for property management services with the University and VRIC are in place until 2023.

Minor Capital Program

ARIO supports the renewal and refurbishment of the physical infrastructure on its properties and enhancement of capacity through the Minor Capital Program. The Minor Capital Program is an ongoing multi-year program that allocates funds across the entire ARIO infrastructure portfolio to support the repairs, life cycle renovations and program-related improvements and repairs to the buildings and land. The program is funded through an annual transfer payment from OMAFRA and is supplemented by revenues generated by the ARIO (such as tenant revenues). The minor capital funding from OMAFRA continues to allow ARIO to maintain and manage its network of research stations across the province.

The Minor Capital Program continues to fund a wide range of maintenance and upgrade projects to maintain and improve the capability and research capacity of the entire ARIO infrastructure portfolio. Safety (human and animal), regulatory, building integrity and equipment failure issues that affect building and program operations across the network of ARIO facilities are addressed on a case-by-case basis throughout the year.

Research priority setting

In 2019, OMAFRA launched a new internal governance process to guide research priority setting. The process engaged OMAFRA’s experts in identifying agri-food and rural research priorities and integrated stakeholders’ research needs into OMAFRA’s research priority setting process.

As a result of this new process, OMAFRA identified 11 research priority areas:

• food safety
• animal health and welfare
• plant health and protection
• soil health
• water quality and quantity
• sustainable production systems
• productive land capacity
• competitive production systems
• innovative products and products improvement
• trade, market, targeted sector growth opportunities
• strong rural communities

Knowledge Translation and Transfer

Knowledge Translation and Transfer (KTT) plans support and accelerate research knowledge into use by working with researchers to disseminate research to impacted stakeholders. Ministry KTT activities also include inviting speakers to give presentations to staff, sharing research results with stakeholders and organizing open knowledge sharing events. Due to COVID‑19, many of the KTT events have shifted to a virtual platform, creating an opportunity to expand the audience and reach. Over the upcoming year, additional enhancements to the ministry’s KTT processes and overall strategy will continue to be implemented.

Transfer payment and third-party agreements

The Ontario Ethanol Growth Fund (OEGF) is a provincial fund established to support development of capacity in the Ontario ethanol industry. In 2012, ARIO began receiving industry funding as a condition of previous capital investments to industry by the province under the OEGF. Payments are expected to continue until 2023. ARIO is exploring options to expend this fund and will bring forward a plan for consideration in 2021-2022.

Mandate

ARIO was created in 1962 and continues its mandate under the Agricultural Research Institute of Ontario Act. R.S.O. 1990, c. A.13 as amended (ARIO Act) and reports to the Minister of Agriculture, Food and Rural Affairs. ARIO is classified under the Agencies and Appointments Directive as a Board Governed Operational Service Agency reporting to the Minister of Agriculture, Food and Rural Affairs.

In the fall of 2020, Ontario’s Minister of Agriculture, Food and Rural Affairs issued a mandate letter to ARIO outlining his expectations of ARIO for the 2021-2022 fiscal year. See Appendix A for a copy of the mandate letter.

ARIO has adopted the following mission statement in support of OMAFRA’s vision for successful and sustainable agri-food and agri-products businesses:

“ARIO, as appointed advisor to the Minister on strategic directions for research activities that contribute to prosperous, competitive and sustainable agricultural and food sectors in Ontario, is dedicated to the strategic use of science and innovation to enhance the sustainability and profitability of Ontario's agri-food sectors.”

The current Memorandum of Understanding between OMAFRA and ARIO was revised in June 2019 to ensure alignment with the ARIO’s 2016 mandate review and the requirements of the Agencies and Appointments Directive.

Environmental scan

The environmental scan describes the environment in which ARIO operates. It identifies key trends, events and issues that present risks and opportunities for the agency, which allows ARIO to be proactive in assessing and responding to changes in the internal and external environment that may have an impact on the operation of the agency.

External factors

COVID‑19

The COVID‑19 pandemic has had only moderate impacts on research and station activities. During the early phase of the pandemic, research activities were scaled back and non-essential research was paused. More normal research activities resumed in June 2020 under heightened COVID‑19 protocols. Construction activities to establish new research platforms faced minor delays. Research stations are currently adhering to all COVID‑19 protocols and research activities have resumed. As mentioned, ARIO, in consultation with OMAFRA and the University of Guelph, have put in place additional policies and procedures to support essential research station operations. In addition to these business continuity considerations, COVID‑19 also surfaced numerous areas (outlined below) where potential research and could be of interest in support of the province’s emergency management and overall sector capacity.

Fiscal environment and economic outlook

The Government of Ontario continues to look for ways to transform programs, manage compensation costs, ensure fair taxation and realize the value of provincial assets. The impacts of COVID‑19 will likely increase the pressure on the provincial fiscal plan. ARIO will continue to provide value for money and plan to operate within budget while continuing the implementation of the Infrastructure Strategy.

Changes and trends in the environment

As the province considers its economic recovery strategy, research and innovation will be critical to the recovery of the agri-food and agri-products sector. ARIO can play a role through its research platforms and programming.

Trends and challenges facing Ontario’s agri-food and agri-products section include:

• Changing climatic conditions are having a global impact and impact the Ontario agri-food sector.
• Ensuring research platforms are well positioned to respond to public health emergencies such as the COVID‑19 pandemic, whereby research platforms can assist in solutions-based projects which mitigate harms to wider society — this could be in the form of helping to ensure a resilient food supply in the province through increased research in food systems such as the viability of vertical farming and/or enhancing Ontario’s domestic supply chains.
• Advocating for the protection and preservation of prime agricultural lands from commercial and industrial development uses —encourage brownfields identification, selection and development ahead of agricultural lands for projects — consistent with the 2021 provincial policy statement.
• An increased emphasis on soil health and water and energy efficiency systems to build resilience and competitiveness into production and processing enterprises.
• Consumer demand will continue to shape the agri-food sector and add more complexity. For example, Ontarians are requesting healthier and culturally appropriate foods to accommodate health, intolerances, allergies and medicinal qualities (such as cannabis). To meet these demands, retailers are responding by requesting more diverse and specialized products, as well as changes in the way food is produced and processed by demanding safety, traceability, variety and affordability.
• Advances in genomics and biomarkers for health and disease will enable designer-food products that are customized to meet the needs of specific consumer segments. This will create a significant increase in niche markets, specialization and complexity.
• The generational transition that will occur in the agri-food sector over the next 10 to 20 years will also influence the uptake and adoption of new technologies.
• The agri-food sector is moving from being labour intensive to a greater focus on technology in response to the increasing labour costs and the difficulty in attracting and retaining staff. The 2017 Planning for Tomorrow 2.0 report completed by the Ontario Agricultural College (OAC) at the University of Guelph indicated that there are approximately four jobs available in the sector for every OAC graduate entering the agri-food sector.

Internal factors

Fiscal pressure to capital budget

The ARIO will be a key resource to help identify cost savings in managing the research infrastructure portfolio. Reductions to the capital budget over the last three years have put significant strain on ARIO’s Infrastructure Strategy and have resulted in deferral of several significant capital projects (such as Elora Agronomy Services Building, relocation of poultry research facility). ARIO will need to work collaboratively with the ministry and industry stakeholders to develop partnerships for future infrastructure projects.

Renewal of the Ontario Agri-food Innovation Alliance and Canadian Agricultural Partnership

The renewal of the Ontario Agri-Food Innovation Alliance agreement (the Alliance) with the University of Guelph and the Canadian Agricultural Partnership (CAP) Agreement with the federal government are two significant funding arrangements that will have an impact on ARIO research stations and future research projects.

The current Alliance agreement is set to expire on March 31, 2023, with a potential for renewal for up to an additional five years. To inform the renewal, a mid-term review of the Alliance will be completed by OMAFRA over the course of 2021. The review will assess results to date (such as the University’s ability to meet program outcomes and achieve key performance targets) and will assess the University’s ability to deliver programming within approved funding allocation.

Recommendations stemming from the review will inform OMAFRA’s negotiation strategy for a renewed agreement. Recommendations will highlight any proposed changes to programming and related funding requirements. The status of dispositions and modernization of research stations will be a key consideration for the design of the renewed agreement. Since ARIO is a signatory to the Alliance agreement, it has specific rights and obligations related to ARIO properties, data and intellectual property and as such, will need to work collaboratively with the ministry to provide advice and recommendations during the review and renewal period.

The CAP began on May 1, 2018 and is a federal-provincial-territorial (FPT) framework that includes both Business Risk Management (BRM) and Strategic Initiatives (SI) programming. The objective of Ontario’s SI programming is to drive economic growth, improve environmental sustainability, protect the health and safety of Ontario’s resource base, and stimulate research and innovation across Ontario’s agri-food and agri-product sectors. The CAP agreement expires March 31, 2023, and Ontario officials will be working over the next two years with FPT colleagues to develop the Policy Statement for the Next Policy Framework, as well as the negotiation of the Multilateral Framework Agreement and a Bilateral Agreement with the federal government to implement provincial programming. The next agreement may create opportunity for additional investment in research programming and capital projects at the research stations that align with provincial priorities.

ARIO’s role in OMAFRA’s Ministry research priority setting and governance exercise

In the fall of 2019, OMAFRA embarked on a strategic foresight exercise. ARIO members were engaged through the process to provide feedback through informant interviews on emerging issues in the agri-food sector. The foresight exercise results will be used as an input to the ministry’s research priority setting process. Since March 2020, OMAFRA has been focusing on COVID‑19 response and expects adoption of foresight-informed research priorities to be incrementally introduced through the 2021-2022 priority-setting process.

Strategic direction, programs and implementation

Developing strategic direction for ARIO is a primary focus for the upcoming year. The members will be completing a strategic planning exercise to confirm the mandate and vision of the organization and define how innovation fits within the mandate. This strategic planning exercise will help inform and validate ARIO efforts under five key priority areas:

Provide leadership — implementation of ARIO’s Infrastructure Strategy

In support of the ministry’s mandate to support growth of the agri-food and agri-products sector, the ARIO plays an important role in modernizing the research and innovation system. The ARIO’s Infrastructure Strategy is the roadmap for modernizing research infrastructure and strengthening innovation in Ontario by providing state of the art, modern research platforms.

• Consolidation of livestock research includes working closely with industry to plan for the relocation of livestock research from the Arkell Research Station, where current research infrastructure for swine and poultry is nearing the end of its useful lifespan, to the Elora Research Station.
• Working with the turf grass industry and the University of Guelph to continue construction of the new research facilities supporting the turf grass sector and continue relocation activities from the Guelph Research Station to the University of Guelph Arboretum and the Elora Research Station.
• Continue construction of new agronomy research services buildings in New Liskeard and Ridgetown.
• Continue to refine, develop, and implement investment options as part of ARIO’s Infrastructure Strategy within a tight fiscal environment.
• The ARIO Secretariat in consultation with ARIO members, industry and academia are currently envisioning the next phase of the ARIO infrastructure strategy. This next phase will identify research platform needs for the future to support a vibrant, competitive and sustainable agri-food sector in the province, while also exploring new and emerging opportunities for partnerships, collaboration and funding models.
• Areas of focus for the next phase may include but are not limited to:
  • Precision agriculture applications across a variety of agri-food sub sector research platforms.
  • Improved data linkages across research platforms.
  • Public/private partnerships to continue funding the modernization and renewal of research infrastructure platforms.
  • Research that may have broad societal benefits.

Provide strategic advice

• The ARIO Chair has continued with the practice of providing recommendations to the Minister following ARIO meetings. This practice has created a direct and more frequent means for the provision of advice from ARIO to the Minister and will continue in 2021.
• To help refine their strategic recommendations on research, ARIO has recommended the Secretariat conduct a review of the Ontario agri-food research system to identify the level of investment and sources of funding available more broadly to the sector. This work will inform the provision of ARIO advice related to new Ontario Agri-Food Innovation Alliance and the Ontario Agri-Food Research Initiative.
• Throughout 2021, ARIO will meet to discuss updates to the Infrastructure Strategy to understand and plan for future needs including new funding models. It is anticipated that this work will culminate with recommendations to the Minister on a renewed Infrastructure Strategy to guide future investments and decision-making.
• The agency will work in close coordination with OMAFRA, industry and academia, to proactively identify and prepare for future trends that may impact the Ontario agri-food and agri-products sector and position ARIO facilities to meet the needs of future research priorities and deliver “Ontario made” solutions, technology and best practices to the sector.

Promote Ontario’s agri-food research and the ARIO’s Infrastructure Strategy

ARIO will look for ways to generate increased awareness of OMAFRA’s agri-food and agri-products research priorities and generate buy-in for the ARIO’s renewed Infrastructure Strategy through increased ARIO member engagement with industry stakeholders. As part of this process, ARIO will seek out strategic opportunities to engage stakeholders on emerging issues and trends that may impact future research and related infrastructure needs.

Through focused outreach and communication opportunities, ARIO will:

• Better understand the Ontario research system to support the effective use of research resources, which will be a key deliverable for 2021-2022. The need to understand the Ontario research system was highlighted by ARIO members to help optimize ministry/ARIO programming and deliver greater impact with our funded research. This project will be valuable to ARIO, stakeholders and OMAFRA program areas as it will help inform policy and program design decisions.
• Raise awareness of Ontario’s efforts to advance agri-food research and innovation programs, modernization efforts and strategic collaborations.
• Champion ARIO infrastructure investments in research, innovation, and commercialization, and communicate the benefits of ARIO investments which support the sustainability competitive advantage of Ontario’s agri-food sector.
• Explore opportunities for new or enhanced partnerships, collaborations and funding models.
• Examine areas of social research in food insecurity, food access, food deserts, healthy and culturally appropriate foods. Explore opportunities with partners in the broader human service spheres beyond primary agricultural production (such as not-for-profits, community organizations, Indigenous communities/organizations) and undertake pilot projects in these and other areas of social research.
• Look to enhance resiliency and flexibility in the agri-food system by undertaking research and/or pilot projects informed by COVID‑19 issues (such as access to labour, congregate work environments, improving and expanding technologies).

Potential modernization of the Agricultural Research Institute of Ontario Act (ARIO Act)

Review the ARIO Act and provide recommendations to the Minister to modernize the Act or provide options on other instruments that could achieve the same outcomes.

Provide managerial oversight

• ARIO will continue to provide operational and managerial oversight of the province’s 15 agri-food research properties, comprised of over 280 plus buildings and 6,200 acres, to help ensure effective and efficient management of the research infrastructure portfolio.
• ARIO will continue to oversee and implement strategic infrastructure renewal activities which modernize the research infrastructure and platforms across the province’s portfolio. These core investments in the renewal of research infrastructure will maintain the sustainability and competitive advantage of Ontario’s agri-food and agri-products sector.
• Part of ARIO’s role includes the management and administration of ARIO intellectual property (IP) interests. The ARIO and OMAFRA are looking to better understand and optimize the management of their IP interests. To support this, OMAFRA, in collaboration with ARIO, is currently in the process of developing an IP Strategy to enhance the strategic alignment, management and administration of OMAFRA/ARIO’s IP and related commercialization support activities.
• OMAFRA provides $4.5 million in annual funding to ARIO in support of the Minor Capital Program. The Secretariat will continue to work collaboratively with the University of Guelph and VRIC to fund critical projects that maintain and enhance the quality of the research stations.
• Oversee the management of financial operations/programs related to the agri-food research properties and the financial reporting, and administration of related transfer payment agreements on behalf of OMAFRA.

Resources requirements

Resources to meet ARIO’s goals and objectives are provided through transfer payment funding from OMAFRA as well as through the Secretariat and the ARIO appointed Comptroller. ARIO also receives revenues from leasing land and buildings within its infrastructure portfolio and sharing of intellectual property revenues realized from research funded under the Alliance.

The ministry, through the Secretariat, will provide the ARIO with the ongoing administrative support and funding needed to effectively operate the agency. These costs are estimated at approximately $1.4 million annually.

Funding for major capital projects (implementation of the ARIO’s Infrastructure Strategy) is requested and approved annually as a key component of OMAFRA’s multi-year planning process.

ARIO continues to seek out non-government sources of capital investment from industry partners. The livestock sectors have agreed to the current model being used whereby industry will provide 20% of the capital costs of any new construction/redevelopment projects.

Revenues from ARIO’s research station portfolio (such as rent paid by tenants) are also used to partially offset the cost of ownership and maintenance of the research station portfolio such as Payments in Lieu of Taxes.

Risk identification, assessment and mitigation strategies

ARIO is classified as a Board Governed provincial agency reporting to the Minister of Agriculture, Food and Rural Affairs and as such, has a Memorandum of Understanding (MOU) with OMAFRA. The MOU outlines the roles and responsibilities of both parties and how the ARIO Act and the various government policies and directives apply to the relationship between ARIO and OMAFRA.

As specified in the ARIO Act, the Director of Research appointed under the Act has several responsibilities. The ARIO Director of Research is currently the Assistant Deputy Minister for OMAFRA’s Research and Corporate Services Division. All secretariat functions (other than management of the trust funds) have been delegated to OMAFRA employees. Funding for programs and properties administered by ARIO is provided largely through OMAFRA.

Implementation of the ARIO’s Infrastructure Strategy will require significant funding over the next several years to ensure the modernization of core research platforms can be completed and operated in a manner that maintains the sustainability and competitiveness of the Ontario agri-food sector. The agency experienced a significant reduction to its capital budget of $20M over four years starting in fiscal 2019-20. This has greatly reduced the ability of the agency to complete or undertake capital projects approved within the ARIO Infrastructure Strategy which presents a high level of risk that ARIO will not be able to meet its core mandate commitment to modernize Ontario’s agri-food research infrastructure.

Current capital projects under construction have been scaled back, delayed or their scope reduced significantly to ensure the ARIO can maintain affordability. ARIO is also experiencing the erosion of buying power related to capital build projects through rising inflation for materials and labour costs. This inflationary period will continue to erode capital budgets as the economy recovers from COVID‑19 and higher material costs are expected to continue as the construction sector begins to ramp up in the province. The ARIO secretariat continues to work with the ministry’s Business Planning and Financial Management Branch, as well as central agencies, in submission of annual updates and refinements to the strategy captured in the ministry’s multi-year planning budget process.

The ability to maintain financial commitments for the multi-year nature of capital infrastructure construction projects could be greatly impacted by changes in government priorities and changes in government funding, neither of which can be predicted with complete confidence in light of COVID‑19.

Without restored levels of investment, Ontario’s agri-food research system risks falling into obsolescence resulting in the possible departure of specific sub-sectors of agri-food research capacity from the province.

ARIO will seek to mitigate these significant risks on the horizon by seeking commitments from industry to support capital build projects which benefit their sector while also seeking to coordinate closely with central agencies regarding innovative ways to fund infrastructure, whether that be through the approval of new transfers or the retention of funds for infrastructure through proposed ARIO land dispositions.

Full details of ARIO’s Risk Management Plan can be found in Appendix C of this document.

Human resources and organizational governance

Membership

The ARIO is comprised of up to 15 members appointed by the Minister for OMAFRA. In late 2020 and early 2021, six new members have been appointed, bringing current membership up to ten in total. Members have been appointed from a broad cross section of commodity groups, business interests and geographic areas. Members do not represent any organization. When putting forward the names of potential members for the Minister’s consideration, ARIO continues to enhance diversity including assessing skills that current members contribute and identifying gaps that can be filled by prospective members. With the addition of the recent members, the ARIO has filled several competency gaps and is well positioned to provide strategic advice on a research and innovation priorities.

The ARIO Director of Research is appointed by the Minister under the ARIO Act and has responsibilities related to ARIO’s business affairs. Operational decision-making and approvals are made by the ARIO Director of Research or their authorized delegate(s). The duties and authority of the Director of Research are detailed in the ARIO Act, as well as in the MOU between ARIO and OMAFRA. The diagram below summarizes the governance structure of ARIO in its current form.

• Minister
  • ARIO Chair
    • ARIO Members
      • Deputy Minister
        • Director of Research
          (Currently the ADM of Research and Corporate Services Division OMAFRA)
          • Comptroller
          • ARIO Secretariat
            Research and Innovation Branch (RIB) OMAFRA
            • Director RIB
              • Manager (Research and Knowledge Management Unit)
                • ARIO Support
                  • Research Analysts
                  • Open Research Programs
                  • OMAFRA/UofG Agreement
                  • Knowledge and Tech Transfer
              • Manager (Research Accountability, Management, and Administration Unit)
                • ARIO Support
                  • Research Analysts
                  • Agency Liaison
                  • Research Infrastructure
                  • Programs Administrator

Download printer-friendly organization chart (PNG).

Communications plan

The ARIO members review and update the communications plan on an ongoing basis.

Objectives

• Raise awareness of Ontario’s efforts to advance agri-food research and innovation programs, modernization efforts and strategic collaborations.
• Raise awareness of, engage and seek support of research priorities.
• Raise awareness with key stakeholders of investments that modernize the province’s research platforms with the intent to increase station utilization and increase support for ARIO projects and initiatives.

Key messages

• Scientific research in agri-food is critical for the pursuit of knowledge and leads to new discoveries that help to ensure Ontarians have access to healthy, safe food and that our farmers and businesses have the information they need to be competitive and sustainable.
• The ARIO research station portfolio of research platforms across a wide variety of sectors serves as a nexus for government, industry, and academia to support and impact the competitiveness and sustainability of Ontario’s agri-food and agri-products sector.
• Partnerships, such as the Ontario Agri-Food Innovation Alliance with the University of Guelph, are key pillars that support Ontario agri-food research and innovation.

Key audiences/stakeholders

• Agricultural sector including commodity organizations, food processing/retailing, bioeconomy, health sciences.
• Ontario academic institutions.
• General public and rural communities.

Tools and tactics

Financial information

Overview of funding

Under the ARIO Act, ARIO may accept gifts, grants, donations or bequest money for use in research or the conservation, protection or preservation of agricultural lands and the Director of Research holds and administers these funds received “in trust” in accordance with the terms, if any, on which it was given.

Investments held in trust

ARIO contracts with an investment management company to assist with the management of investments held within the ARIO trust funds. The ARIO’s investment policy follows the requirements of the Trustee Act R.S.O. 1990, c. T23 as amended (Trustee Act) and the Financial Administration Act R.S.O. 1990, C.F.12 as amended (Financial Administration Act). The investment strategy’s priority is to guarantee preservation of capital, and subsequently to provide liquidity to meet short-term cash flow requirements while maximizing returns.

See Appendix B for ARIO’s Statement of Investment Policy.

Operational costs (excluding operation and management costs of the research stations)

The cost to administer the programs within ARIO (including the proportionate cost of salaries and benefits for OMAFRA staff that provide secretariat services) are paid from OMAFRA’s budget. The current estimated cost to provide the secretariat functions to ARIO is approximately $1.4 million annually.

Per diem rates and travel expenses for appointed ARIO members are set by Orders-in-Council and are paid to ARIO members for their attendance at scheduled meetings. These per diems follow Treasury Board Guidelines for Agencies, Board and Commissions and are paid out of ministry funds. Details are provided to members in the ARIO member’s handbook.

Financial projections (three-year outlook)

ARIO is required to submit its Annual Report including audited financial statements to the Minister within 120 days of its year-end. The annual report is prepared by the Secretariat and includes financial statements that are prepared and audited by an external auditor contracted by OMAFRA.

A forecasted Balance Sheet and Financial Statement showing projected revenues and expenses is included in Appendix C.

ARIO is consolidated for financial reporting purposes with OMAFRA due to its close relationship, the ARIO’s reliance on OMAFRA for research program funding and administrative support and given the financial materiality of ARIO resulting from an approximate $60 million book value of the research infrastructure in 2007 at the time of the transfer from the Ontario Realty Corporation to ARIO. ARIO is required to provide a three-year financial outlook to OMAFRA for financial consolidation purposes.

Performance measures

Infrastructure planning and management

Below is a report on achievements in accordance with the current performance measures framework outlined in the ARIO MOU and includes the current focus of the ARIO’s Infrastructure Strategy.

Appendices

Appendix A: ARIO’s mandate letter

Dr. Lorne Hepworth
Chair, Agricultural Research Institute of Ontario
15-50 Northumberland Rd
London, ON N6H 5J2

Dear Mr. Hepworth:

As you begin planning for 2021-22, I am pleased to write to you in your capacity as Chair of the ARIO, to provide you with a letter setting out expectations and direction for ARIO in the year ahead. Pursuant to the requirements of the Agencies and Appointments Directive, this letter sets out my expectations for ARIO for the 2021-22 fiscal year. Ontario's board-governed agencies are vital partners in ensuring the delivery of high quality services to Ontarians. The work that you and your fellow members undertake to establish the goals, objectives, and strategic direction ensures that ARIO is continuing to support research and innovation in the agri-food sector and drive economic growth, jobs and sustainability in Ontario. It is important that this direction is consistent with government priorities, your agency mandate, key policies and directives and my directions, where appropriate. I thank you for your willingness to serve.

As part of the Government of Ontario, agencies are expected to act in the best interests of Ontarians by being efficient, effective, and providing value for money to taxpayers. This includes:

Competitiveness, Sustainability and Expenditure Management

• Operating within your agency's allocations.
• Identifying and pursuing opportunities for revenue generation, innovative practices, and/or improved program sustainability.
• Identifying and pursuing efficiencies and savings.
• Complying with applicable direction related to supply chain centralization, Realty Interim Measures and Agency Office Location Criteria.

Transparency and Accountability

• Abiding by applicable government directives and policies and ensuring transparency and accountability in reporting.
• Adhering to requirements of the Agencies and Appointment Directive, and responding to audit findings, where applicable.
• Identifying appropriate skills, knowledge and experience needed to effectively support the board's role in agency governance and accountability.

Risk Management

Developing and implementing an effective process for the identification, assessment and mitigation of risks, including planning for and responding to emergency situations such as COVID‑19.

Data Collection

• Improving how the agency uses data in decision-making, information sharing and reporting, including by leveraging available or new data solutions to inform outcome-based reporting and improve service delivery.
• Supporting transparency and data sharing with the ministry, as appropriate.

Digital Delivery and Customer Service

• Exploring and implementing digitization or digital modernization strategies for the provision of services online and continuing to meet and exceed customer service standards through transition.
• Using a variety of approaches or tools to ensure service delivery in all situations, including COVID‑19.

In addition to these government-wide priorities, I expect ARIO to focus on:

Property Management

• Continue to provide value for money in effectively owning and managing the Province of Ontario's agri-food research facilities and infrastructure.
• Continue to provide advice on a long-term strategic plan for the province's agri-food research infrastructure and recommendations on strategies to continue investments in research infrastructure within the current fiscal limitations.
• Continue to revitalize the province's agri-food research infrastructure necessary to support innovative research and the long-term sustainability and growth of the agri-food sector in Ontario by developing state of the art, integrated research infrastructure capacity built on shared funding models and partnerships between industry and government.

Strategic Advice

• Continue to provide strategic advice to me and the Ministry on current research issues and priorities that contribute to prosperous, competitive and sustainable agricultural and food sectors and rural communities in Ontario.
• Provide advice to support research that is responsive to the changing needs of the sector, especially as the province recovers from COVID‑19.
• Provide strategic advice to me and the Ministry on the long-term research needs that will enable the agriculture and food sectors to remain a global leader in years to come.
• Review the Agricultural Research Institute of Ontario Act and provide recommendations that would modernize the Act.

Promotion and Advocacy of Ontario's Agri-Food and Agri-Products Research and Innovation System

• Advocate for the value of OMAFRA's agriculture research and commercialization system through focused outreach opportunities, building relationships between ARIO and industry stakeholders to broaden awareness, engage and seek support for research and innovation priorities and the research infrastructure renewal needed to maintain and strengthen Ontario's local, national and global competitiveness.
• Continue to communicate the value and return on investment for ARIO infrastructure and the research system it supports.

Efficient and Effective Administration

• Continue sourcing secretariat services from OMAFRA that provide effective and efficient administration of Ministry open research programs, timely and accurate financial operations and reporting, and all aspects of property management and capital revitalization.
• Provide recommendations on new agency members to support robust strategic advice and the delivery of the ARIO mandate.
• Continue to meet all Agency Accountability Directive (AAD) provisions and requirements.

Through these measures, we can continue to ensure that ARIO is supporting research and innovation in the agri-food sector and driving economic growth, jobs and sustainability in Ontario.

I thank you and your fellow members for your continued support, and for your valuable contributions. Should you have any questions/concerns, please feel free to contact the Director of Research, Greg Wooton.

Sincerely,

Ernie Hardeman
Minister of Agriculture, Food and Rural Affairs

Appendix B: ARIO’s statement of investment policy

General

This Statement of Investment Policy expresses the investment objectives and constraints of the ARIO. In addition to providing a framework for general direction of the portfolio, it provides a basis upon which to periodically review and evaluate portfolio performance relative to appropriate asset class benchmarks.

Investment objectives

The portfolio shall be managed to meet the following objectives (in priority order listed):

1. Ensure safety of capital over a one-to three-year time horizon by investing in high quality fixed income securities, including government bonds and/or professionally managed pension level bond portfolios.
2. Provide liquidity, with a significant portion of the portfolio available to adequately meet short-term (up to one year) individual program and capital reinvestment cash flow requirements. Investments may include Treasury Bills, Government of Canada/Provincial bonds or coupons, and Bankers Acceptance Paper maturing within one year.
3. Maximize the rate of return on the portfolio recognizing the constraints imposed by (1) and (2) above.

Investment constraints

Consistent with both the Trustee Act and the Financial Administration Act, the following securities are examples of eligible investments for the ARIO portfolio:

1. Federal Government Treasury Bills and Bonds.
2. Provincial Government Treasury Bills and Bonds.
3. Instruments offered by the five major chartered banks, namely, Royal Bank, TD Canada Trust, Bank of Montreal, Canadian Imperial Bank of Commerce and Bank of Nova Scotia including GICs, Term Deposits and Bankers Acceptances (note: investments can be greater than the $60,000 Canada Deposit limit).

Diversification

The portfolio should be diversified, within constraints of ARIO investment policy, to reduce risk to capital.

Performance objectives

The performance objectives of each element of the portfolio are to equal the appropriate market benchmark index over a full market cycle, namely, one to three years. *Note: this goal is ambitious given that the ARIO portfolio(s) are constrained. For example, Canadian corporate bonds are not eligible investments but are included in the benchmark index, and due to high cash flow demand. Cash maturities may average less than 90 days.

Investment advisor

ARIO shall engage the services of a professional investment firm for investment advice through a competitive process.

ARIO comptroller

The ARIO Comptroller shall have responsibility to ensure the Statement of Investment Policy is adhered to.

Reporting

The investment advisor shall prepare and provide detailed monthly statements showing the composition of the portfolio at month end and shall report all transactions during the month.

A comprehensive portfolio review and performance evaluation shall occur annually including performance of the portfolio, as well as updates on the current and future economic outlook and investment strategy.

All fees billed shall be fully disclosed, transparent and included in the monthly/quarterly report as they occur.

Review of investment policy

This ARIO Statement of Investment Policy shall be reviewed as required.

Appendix C: proforma statement of financial position

2021-22 Multi-year plan - forecast

Appendix D: ARIO risk management plan summary

The risk rating has been calculated using an index combining individual scores for Likelihood, Strategic Impact, Reputational Impact, Financial Impact, Speed of Onset and Risk Tolerance.