2022–2025 Agricultural Research Institute of Ontario business plan

Executive summary

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) and fostering economic development of the agri-food sector and rural Ontario (such as food processing and 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 these four ways:

• Providing strategic advice to the Minister on agri-food and agri-products research and innovation
• Implementing the ARIO’s Infrastructure Strategy to modernize the province’s agri-food and agri-products research and innovation physical and virtual infrastructure
• Promoting the Ontario agri-food and agri-products research and innovation system
• Providing oversight of open research programs

Agency mandate

The ARIO was created in 1962 and continues its mandate under the ARIO Act, R.S.O. 1990, c. A.13. 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 2021, Ontario’s Minister of Agriculture, Food and Rural Affairs issued a mandate letter to ARIO outlining her expectations of ARIO for the 2022–23 fiscal year. See Appendix A for a copy of the mandate letter.

ARIO has adopted the following mission 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 (MOU) 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.

COVID-19

ARIO and its portfolio of research stations continues to emerge from the impacts of the COVID-19 pandemic. To date, there have been moderate impacts on research and the day-to-day operational activities of the stations. During the early phase of the pandemic, research activities were scaled back, and non-essential research was paused. Many 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. 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 where potential research 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 have increased the need for the province to tighten its fiscal plan. Elevated current and forecasted inflation rates put immense pressure on infrastructure projects that need to move fast while avoiding overspending. 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 proceeds with its economic recovery strategy, research and innovation continue to be critical to the recovery of the agri-food and agri-products sector. ARIO has a key enabling role through its research platforms and programming. Trends and challenges facing Ontario’s agri-food and agri-products sector include:

• A dynamic and challenging international trading landscape, increasing innovation from Canada’s competitors and a changing climate are increasing pressure on Ontario’s agri-food system.
• Higher input costs for things like feed, energy and fertilizer, along with higher transportation and labour costs are also compounding factors.
• Rising food costs, increasing inflation, and the full lifecycle costs of food waste being incorporated in the value chain will drive change in consumer behaviours.

Environment and climate change

Changing climatic conditions are having a global impact and impact the Ontario agri-food sector. Canada’s Changing Climate Report, released by Environment and Climate Change Canada in 2019, indicates that warming in Canada is approximately double the global average. The recent extreme weather events experienced in Ontario and across Canada have highlighted the challenges farmers are facing due to climate change.

Other environmental impacts such as water access and quality, biodiversity and soil health are expected to enhance pressure points over the coming years. Research continues to play a key role in supporting Ontario’s farmers, who are already innovating and adopting more sustainable practices and technologies to improve their climate resiliency.

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.

The increased emphasis on soil health, water and energy efficiency systems to build resilience and competitiveness into their production and processing enterprises.

Agri-food and COVID-19 response and recovery equation

Ensuring research platforms are well positioned to respond to new and evolving public health emergencies on the heels of 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 innovations to enhance food production in the north, viability of vertical farming, enhancing and leveraging the strength of Ontario’s domestic supply chains).

Consumer demands increasingly complex

Consumer demand will continue to shape the agri-food sector and add more complexity. For example, the longer-term impacts of the COVID-19 pandemic are still unknown, and farm and food businesses will need to remain responsive and adaptable over the coming years, with many incorporating e-commerce solutions into their business models.

Despite price pressures, Ontarians are still 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.

Technology and labour challenges are long-term and multifaceted

Strong GDP growth in agriculture during the pandemic disguises the widespread labour shortages in the industry, including those that resulted from repeated COVID-19 outbreaks in the meat-processing sector. 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 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. There is a significant expense to adopt these emerging technologies, coupled with real or perceived advanced skills gaps, that can create a significant barrier. These technologies that evolve how food is produced can contribute to the fight against climate change, much needed productivity enhancements and protecting biodiversity; however only if those technologies can be accessed and the investments are actually made.

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 the Elora Agronomy Services Building). ARIO will need to work collaboratively with the OMAFRA and industry stakeholders to develop partnerships for future infrastructure projects. An increased allocation would be required to continue with the Infrastructure Strategy.

The Ontario Agri-food Innovation Alliance and Canadian Agricultural Partnership

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 renewal for up to an additional five years. To inform the potential renewal, a mid-term review of the Alliance was completed in 2021. The review assessed results to date (such as University of Guelph’s ability to meet program outcomes and achieve key performance targets) and will assess the University of Guelph’s ability to deliver programming within approved funding allocation.

Recommendations stemming from the review will inform OMAFRA’s negotiation strategy for a renewed agreement, including potential programming changes and funding requirements. It is anticipated that negotiations for a new agreement will take place in 2022. 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 OMAFRA to provide advice and recommendations during the review and renewal period.

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 on 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.

Beyond these two key programs which drive significant research and innovation in Ontario today, the ARIO will strive to identify and work with a variety of research institutions that can move the agency’s agenda forward to support research and innovation and enable a prosperous, sustainable, and resilient agri-food and rural economy in the province.

ARIO’s role in OMAFRA’s ministry research priority setting and governance

In November 2021, the ARIO and the Parliamentary Assistant to the Minister of Agriculture, Food and Rural Affairs jointly led a Minister’s Research Roundtable that included leaders from industry, academia, and the broader innovation ecosystem. This Research Roundtable was building upon a previous OMAFRA-led strategic foresight exercise. Participants were asked to provide input on the emerging and future-looking research needs of the agri-food sector and rural communities. The exercise stressed the need to be focused and on specific areas OMAFRA and ARIO can be global leaders to deliver impact in the research domain, complementing industry research investments and objectives.

The input garnered will be valuable to OMAFRA’s research priority setting process in several ways. Detailed input received will be of value to OMAFRA as specific research needs are refined, and the broader strategic input will be reflected upon as the agency continues to fulfill its mandate to provide strategic-level advice to OMAFRA on research and innovation priorities.

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 2020–21, 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, which provides the ARIO secretariat with the opportunity to 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. The 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 (MOU).

Strategic direction, programs and implementation

ARIO has made strong progress in defining its future vision and mission and will continue developing its strategic plan (see Appendix B for ARIO Strategic Plan Overview) as a primary focus for the upcoming year. The work to provide further detail on our strategic plan will help inform and validate ARIO efforts under five key priority areas.

Provide leadership — implementation of ARIO’s Infrastructure Strategy

In support of OMAFRA’s mandate to support growth of the agri-food and agri-products sector, the ARIO plays an important role in renewing the research capacity of the research station portfolio. The ARIO’s Infrastructure Strategy serves as a roadmap for renewing and revitalizing agri-food research infrastructure and strengthening innovation in Ontario by providing state-of-the-art, research platforms.

The infrastructure strategy has enabled the renewal and modernization of several large scale, capital intensive projects supporting the livestock, field crops, horticultural and greenhouse sectors. These major capital investments have created modern research platforms that will support research in key agri-food sectors for decades to come and have allowed for the decommissioning of obsolete platforms that no longer adequately support research and were costly to operate and maintain.

Complementary to the ARIO Infrastructure Strategy is the ARIO Minor Capital Program.

• The ARIO 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 all research stations other than the Vineland Station where Vineland Research and Innovation Centre implements the minor capital plan for this station as they are the property managers for Vineland Station. 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.

The Infrastructure Strategy and the Minor Capital Program work in tandem to ensure a modern and viable agri-food research environment is maintained for the benefit of the sector with Ontario based research solutions that maintain the province’s competitive advantage in agri-food production and processing.

• 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.
• 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
• 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. The business priorities provide detail on how ARIO will enhance its research system intelligence / advice and communication / promotion roles.

Upcoming business priorities

ARIO will continue to implement and complete the construction of new major research infrastructure projects across the research station portfolio within the next three years through projects such as the new Ontario Swine Research Centre, the completion of construction activities for the final phases of the Ontario Beef Research Centre, as well as the bringing new agronomy research facilities online at Ridgetown Campus and New Liskeard Agricultural Research Station.

The ARIO is looking to enhance intelligence on the research system funding participants to make impactful recommendations and maximize the return on investment for research in the province. To support this outcome, the ARIO will be procuring a consultant to collect data on the Ontario research landscape to identify gaps and align resources to support the optimal use of limited research dollars.

ARIO is in the preliminary planning stages of planning and scope definition for a strategic review of its communications activity and will seek external advice on the development of a comprehensive communications plan to increase awareness of ARIO outcomes.

ARIO communications plan

ARIO will initiate a process to implement a new communications plan for the agency. ARIO members will be consulted throughout 2022–23 to inform this process with a key goal to raise awareness of the ARIO, the agency’s research properties and activities, and how the agency works to ensure a competitive agri-food sector in the province through investments in capital intensive research platforms and advocacy of research and innovation with industry and academia.

ARIO Act modernization

The ARIO has initiated a process to potentially modernize the ARIO Act, as per direction in the Minister’s mandate letter to the ARIO Chair for 2022–23 priorities. Current language within the ARIO Act, including as it relates to the agency’s mandate to support agri-food research, is quite dated and requires updating to be more relevant in the context of today’s modern agri-food research environment – with last major amendments to the ARIO Act occurring in the early 1990s.

The current focus is too narrow and does not fully address the current research and innovation initiatives occurring in the agri-food sector in Ontario. Potential changes to the scope of the ARIO Act may allow for greater research opportunities and growth within the sector.

Targeted consultations on the ARIO Act are expected to occur throughout 2022 in order to assist the government to better understand what changes are needed to ensure the ARIO Act better reflects current and future agri-food research needs, such as technology, digital agriculture, environmental sustainability, food processing and value-added agri-food products.

Consultation with stakeholders will be used to inform policy and to identify potential changes to the ARIO Act which enable a more competitive and sustainable agri-food research environment in the province with a broader focus on the research needs of the Ontario agri-food sector.

ARIO property dispositions

ARIO continues with a process of consolidation of the research station portfolio with targeted dispositions of land and building assets that no longer support the agency’s research mandate.

In fiscal 2021–22, ARIO continued this process, through the disposition of the Guelph Research Station located within the borders of the City of Guelph. Dispositions of portions of the Woodstock Research Station and New Liskeard Research Station were also completed.

Targeted disposition of a portion of land at Woodstock has secured the site of Canada’s Outdoor Farm Show for decades to come, while further protecting remaining lands for crops research.

Targeted disposition of a portion of land containing the former educational site and buildings at the New Liskeard Research Station was undertaken to make way for a new and modern field crops research facility. This new research facility is currently being constructed on the traditional field crops plot areas of the station and is anticipated to open in fiscal 2022–23.

Funds acquired through disposition of ARIO assets will be used to further fund new research capacity within the ARIO research station portfolio.

Implementation of principles from Minister’s mandate letter (see appendix for Minister’s mandate letter to ARIO):

• The ARIO will work to implement the guiding principles issued by the Minister to enable and enhance:
  • The efficient operation of ARIO’s properties and property management
  • Advocacy and promotion of the Ontario agri-food research system
  • Strategic advice through improved and efficient harvesting of digital data from ARIO’s research centres

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 future years.

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 sectors 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 2022–23. The need to understand the Ontario research system was highlighted by ARIO members to help optimize OMAFRA/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. To support this, the ARIO will be undertaking a strategic review of its communications activities this year.
• 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.
• 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, etc.).

Provide managerial oversight

ARIO will continue to provide operational and managerial oversight of the province’s 14 agri-food research properties, comprised of over 200+ buildings and 5,600 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 that will align with Intellectual Property Ontario 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 ARIO secretariat will continue to work collaboratively with the University of Guelph and Vineland Research and Innovation Centre (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.

Resource 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 IP revenues realized from research funded under the Alliance. OMAFRA, 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. The secretariat’s 2021–22 costs to August 30, 2021, are as follows:

Note: Interim numbers as of August 30, 2021.

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 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 a number of responsibilities. The ARIO Director of Research is currently the Assistant Deputy Minister for OMAFRA’s Research and Corporate Services Division. 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 renewal 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 ARIO faces significant budget constraints which present a high level of risk that the agency will not be able to meet its core mandate commitment to modernize Ontario’s agri-food research infrastructure. The agency experienced a significant reduction to its capital budget of $20 million 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.

As a result of financial limitations, 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 will continue to work with OMAFRA’s Business Planning and Financial Management Branch (BPFMB), as well as central agencies, in submission of annual updates and refinements to the strategy captured in OMAFRA’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 in the coming years — post pandemic, 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 further proposed ARIO land dispositions.

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

Human resources and organizational governance

Membership

The ARIO is comprised of up to 15 members appointed by the Minister of Agriculture, Food and Rural Affairs. In 2020–21, six new members have been appointed, bringing current membership up to 11 in total. Members have been appointed from a broad cross section of commodity groups, business interests, knowledge, and geographic areas. Members do not represent any organization but hold their position in their own right. When putting forward the names of potential members for the Minister’s consideration, ARIO continues to strive for diversity, equity and inclusion by broadening ARIO membership. Each member also completes a skills matrix, which is used to assess skills that current members contribute and identifies 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 his/her 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 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 and the Financial Administration Act R.S.O. 1990, c. F.12 as amended. The investment strategy’s first priority is to guarantee preservation of capital, and then, to provide liquidity to meet short-term cash flow requirements, followed by maximizing returns to funds held by ARIO.

See Appendix C 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, Boards and Commissions and are paid out of OMAFRA 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 (by July 29th annually). 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 D.

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

This 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

Dear Dr. Hepworth:

As you begin planning for 2022–23, I am pleased to write to you in your capacity as Chair of the Agricultural Research Institute of Ontario (ARIO) and 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 2022–23 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 which drives 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. Our government's primary focus is to protect every life and every job where we possibly can. Without healthy people, we cannot have a healthy economy.

This includes:

Innovation, competitiveness, sustainability and expenditure management

• Operating within your agency's financial allocations.
• Identifying and pursuing opportunities for revenue generation, innovative practices, and/or improved program sustainability.
• Complying with applicable direction related to supply chain centralization and Realty Interim Measures for Agency Office Location Criteria.
• Working with the Ministry, where appropriate, to advance the Ontario Onwards Action Plan.
• Encourage competitors to work together under a cooperative structure to help modernize the agri-food sector.

Transparency and accountability

• Abiding by applicable government directives and policies and ensuring transparency and accountability in reporting.
• Adhering to requirements of the Agencies and Appointments 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 health and emergency situations, including, but not limited to COVID-19.
• Developing a continuity of operations plan that identifies time critical/essential services and personnel.

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 privacy requirements of data work 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.

Diversity and inclusion

• Developing and encouraging diversity and inclusion initiatives promoting an equitable, inclusive, accessible, anti-racist and diverse workplace.
• Demonstrating leadership of an inclusive environment free of harassment.
• Adopting an inclusion engagement process to ensure all voices are heard to inform policies and decision-making.

COVID-19 recovery

• Identifying and pursuing service delivery methods (digital or other) that have evolved since the start of COVID-19.
• Supporting the recovery efforts from COVID-19.

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

Property management

• Continuing to provide value for money in effectively owning and managing the Province of Ontario's agri-food research facilities and infrastructure.
• Providing advice on a long-term strategy for the province's agri-food research infrastructure and recommendations on future investments in research infrastructure within the current fiscal limitations.
• Continuing 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 by developing state of the art, integrated research infrastructure built on shared funding models and partnerships between industry and government.

Continue the work to digitalize and harvest data from the research centres, strategic advice

• Continuing to provide strategic advice to me and the Ministry on current and emerging research issues and priorities that contribute to prosperous, competitive and sustainable agricultural and food sectors and rural communities in Ontario, including finding ways for private sector partners to increase research on-farm.
• Providing advice to support research that is responsive to the changing needs of the sector, especially as the province recovers from COVID-19.
• Providing 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.
• Continuing to work on an implementation approach on OMAFRA's Intellectual Property Strategy as innovation and commercialization will be critical in sustaining the sector's competitive advantage.
• Assessing potential legislative or non-legislative options to ensure ARIO's legislation and governance documents reflect the current mandate of the agency in a modern context.

Promotion and advocacy of Ontario's agri-food and agri-products research and innovation system

• Advancing OMAFRA's agriculture research and commercialization system through driving outreach opportunities, strengthening relationships between ARIO and industry stakeholders to broaden awareness, nurture support for research and innovation priorities and the research infrastructure renewal needed to maintain and enhance Ontario's local, national and global competitiveness.
• Continuing to drive the value and return on investment for ARIO infrastructure and the innovative research system it supports.
• Enhance work to ensure that research results are communicated to the sector.

Efficient and effective administration

• Continuing to source 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.
• Providing recommendations on new agency members as necessary to support robust strategic advice and the delivery of the ARIO mandate.
• Continuing to meet all Agencies and Appointments Directive 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 know we both share a desire for Ontario to be known as a leader in world-class innovation, and harnessing the knowledge base within ARIO is an exceptional way to do this.

I thank you and your fellow members for your continued support, and for your valuable contributions. Should you have any questions/concerns on these expectations, please feel free to contact the ARIO Director of Research, Lee-Ann Walker.

Sincerely,

Lisa Thompson
Minister of Agriculture, Food and Rural Affairs
cc: Lee-Ann Walker, Director of Research, ARIO

Appendix B: ARIO strategic plan overview

Agriculture Research Institute of Ontario (ARIO) Strategic Plan

Vision

ARIO 2030: Globally leading agri-food sector – empowered by transformational research and innovation

Mission

ARIO is a trusted, authoritative, credible advisory body to the Minister on:

• Research and infrastructure partnerships and programs;
• Optimizing and leveraging the research infrastructure owned by ARIO;
• Driving research into action, evaluating and communicating the value of research;

To foster a prosperous, sustainable, and resilient agri-food and rural economies

• Advise: Provide bold, informed strategic advice to the Minister on transformative, high-impact and diverse agri-food research and innovation
• Promote: Communicate Ontario’s agri-food research opportunities and successes
• Transform: Establish partnerships to deliver transformational research
• Leverage: Ontario’s research and innovation infrastructure is world leading and assets are leveraged to maximize benefits for the agri-food sector

Appendix C: 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:

• federal government treasury bills and bonds
• provincial government treasury bills and bonds
• 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 Iimit)

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 is 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 D: proforma statement of financial position

ARIO 2022–23 multi-year plan — forecast

Forecast of financial position — Form B support

Appendix E: 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.