2023–2026 Agricultural Research Institute of Ontario business plan

Executive summary

The Agricultural Research Institute of Ontario’s (ARIO) 2023-2026 business plan outlines the agency’s commitments as they relate to Ministry of Agriculture, Food and Rural Affairs’ (OMAFRA) priorities, the agency’s duties and rights as outlined in the ARIO Act, the Memorandum of Understanding (MOU) between ARIO and OMAFRA, ARIO’s vision, and the 2023-2024 annual letter of direction.

To deliver on ARIO’s commitments, duties, responsibilities and direction from 2023-2026 the agency will concentrate its efforts in these 4 ways:

• Provide strategic advice to the Minister on agri-food research and innovation.
• Implement ARIO’s infrastructure strategy 2.0 to modernize the province’s agri-food research and innovation physical and soft infrastructure (data, digital equipment, virtual platforms).
• Promote the Ontario agri-food research and innovation system.
• Provide oversight of open research programs, and the 14 ARIO-owned research properties.

OMAFRA priorities

OMAFRA works to strengthen and increase competitiveness and productivity in Ontario’s agri-food sector and rural communities to create a stronger economy for the province and ensure sustainability of agriculture through research and innovation.

Keys to achieving success include robust protection and assurance systems in the agri-food sector (for example, enforce and improve food safety and animal, plant and human health), provide stewardship of Ontario’s capacity to produce food (such as soil and water quality, climate change), expand agriculture in the north and foster economic development in the agri-food sector and rural Ontario (such as food processing, bioproducts).

ARIO Act

ARIO was created in 1962 by the Agricultural Research Institute of Ontario Act. ARIO is an agency of OMAFRA and 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.

Through the ARIO Act, ARIO has the authority to own real property. This authority helps ARIO to fulfill the agency’s duties and responsibilities to stimulate research and innovation in the in agriculture and food sector.

MOU between ARIO and OMAFRA

As a board governed operational service agency, ARIO has a MOU with OMAFRA. The purpose of the MOU between ARIO and OMAFRA is to:

• Establish the accountability relationships between the Minister of Agriculture, Food and Rural Affairs, ARIO Director of Research and the Chair of ARIO on behalf of the agency.
• Clarify the roles and responsibilities of the Minister, the director of research, the chair, the Deputy Minister, the comptroller and the agency’s members.
• Clarify the operational, administrative, financial, staffing, auditing and reporting arrangements between ARIO and OMAFRA.

The current MOU between OMAFRA and ARIO was last revised in June 2019 to ensure alignment with ARIO’s 2016 mandate review and the requirements of the agencies and appointments directive.

ARIO’s vision

In 2021, ARIO’s vision, mission and strategic pillars were most recently updated to inform the agency’s strategic direction and objectives and ensure alignment with OMAFRA’s priorities.

Vision

Enabling high impact and transformational research for the agri-food sector.

Mission

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

• research and infrastructure strategic relationships and programs
• optimizing and leveraging the research infrastructure owned by ARIO
• driving research into action, evaluating, and communicating the value of research
• fostering, through stimulation of research and innovation, a prosperous, sustainable and resilient agri-food system

Strategic pillars

Advice: Provide bold, informed strategic advice to the Minister on transformative, high-impact agri-food research and innovation.

Infrastructure: Ontario’s research and innovation infrastructure and assets are leveraged to maximize benefits for the agri-food sector.

Strategic relationships: Establish strategic relationships that enhance the research ecosystem and align with the priorities and objectives of the ministry and sector.

Promote: Communicate the value of Ontario’s agri-food research, including opportunities and successes in research and innovation.

ARIO’s 2023-2024 annual letter of direction

In the fall of 2022, Ontario’s Minister of Agriculture, Food and Rural Affairs, the Honorable Lisa M. Thompson, issued the annual letter of direction to the ARIO chair, outlining the government’s 2023-2024 priorities and expectations for all agencies including priorities specific to ARIO.

2023-2024 OMAFRA agency priorities

Competitiveness, sustainability and expenditure management

• Identifying and pursuing opportunities for revenue generation through partnerships, where appropriate, including seeking opportunities to enhance use of research stations.
• Identifying efficiencies and savings through innovative practices, and/or improved program sustainability.
• Operating within the agency’s financial allocations.
• Complying with applicable direction related to supply chain centralization, including contract harmonization for planned and pending procurements, accounting practices and realty interim measures for agency office space.

Transparency and accountability

• Abiding by applicable government directives and policies and ensuring transparency and accountability in reporting.
• Adhering to accounting standards and practices, 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 agency risks, including any future emergency risks.

Diversity and inclusion

• Developing and encouraging diversity and inclusion initiatives by promoting an equitable, inclusive, accessible, anti-racist and diverse workplace.
• Support the strengthening of equity, diversity and inclusion in the Ontario Agri-Food Innovation Alliance.
• Adopting an inclusion engagement process to ensure all voices are heard to inform policies and decision-making.

Data collection

• Improving how the agency uses data in decision-making, information sharing and reporting, to inform outcome-based reporting and improve service delivery.
• Increasing data sharing with Supply Ontario when applicable regarding procurement spending and planning, contract arrangements and vendor relations to support data-driven decision-making.

Digital delivery and customer service

• Exploring and implementing digitization to increase the agency’s operational efficiency and modernize ARIO’s accounting and financial management system.
• Using a variety of approaches or tools to ensure service delivery in all situations, including pursuing delivery methods that have evolved since COVID-19.

Priorities specific to ARIO

Property management

• Continue to provide value for money in efficiently owning and facilitating the management of the Province of Ontario's agri-food research facilities and infrastructure.
• Continue to provide advice on the long-term strategic plan and recommendations for the province’s agri-food research infrastructure and 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 by developing state of the art, integrated research infrastructure capacity built on shared funding models and partnerships between industry and government.
• Pursue private partnerships in support of industry-government research and innovation priorities and modernizing research infrastructure.
• Continue to engage with the poultry sector on the development of a new poultry research centre in Elora.

Strategic planning and advice

• Continue to provide strategic advice to the Minister and the ministry on current research priorities and programs that contribute to prosperous, competitive and sustainable agricultural and food sectors and rural communities in Ontario.
• Continue to develop and implement ARIO’s vision and strategic plan for Ontario’s agricultural future to be a global leader, empowered by transformational research and innovation.
• Continue to enable adoption of innovation by supporting the objectives of OMAFRA’s Grow Ontario Strategy.
• Implement strategies that will improve the strategic management of ARIO's interests in intellectual property and commercialization.

ARIO Act modernization

• Continue to assess potential legislative and non-legislative options to modernize the ARIO Act to ensure the ARIO Act is more relevant to the current and future agri-food research environment in Ontario and harmonized to better support OMAFRA’s overall Grow Ontario Strategy, as well as evaluating operational tools to enhance the functions of the agency.
• Continue to lead stakeholder consultations to inform potential updates to the legislation in 2023.

Enhance collaborations, global expertise and partnerships

• Increase collaboration with other universities/research institutions, industry organizations including Indigenous peoples, communities and organizations to enhance public/private partnerships and to leverage ARIO’s assets for the benefit of the province and agri-food sector.
• To directly engage with sector partners for the purpose of expanding innovation demonstrations and technology deployment through the ARIO research centres.
• Seek opportunities to leverage expertise and knowledge from around the world to address emerging issues and enable the sector to compete in the global market.

Communications

• Actively promote the research activities and network of research centres within the agri-food sector.
• Explore options to brand ARIO and the Province of Ontario to increase the prominence of the agency and the province within the agri-food sector.

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 external and internal environment that may have an impact on the operation of the agency.

Economic and fiscal outlook

Inflation

• Inflation has been and is the primary focus of the Bank of Canada (BoC) over the last months.
• The BoC has taken significant steps to ease the demand side of inflation in Canada and it appears those steps will continue in likely increasingly significant steps over the next year.
• Canadian inflation has overall been less pronounced than in the United States (US). However, many Canadian sectors rely on American imports for many products, as such US inflation has directly contributed to Canadian cost pressures and price increases.
• Provincially, Ontario’s economy has proven resilient however growth is expected to be moderate in 2023 as higher inflation and interest rates contributing to the rise in food costs and conservative consumer spending. ARIO is also experiencing the erosion of buying power related to capital build projects through rising inflation for materials and labour costs.
• Ontario’s real GDP is projected to rise 2.6% in 2022, 0.5% in 2023, and 1.6% in 2024.
• After several years of identifying cost savings (for example, consolidation of properties) in managing the research infrastructure portfolio, the agency will now seek a modest and stable approach to infrastructure funding which balances fiscal constraint while still allowing core agri-food research infrastructure projects to move forward in a sustainable manner. Reductions to the ARIO capital budget over the last several years, alongside elevated current and forecasted inflation rates, continue to put immense pressure on ARIO’s infrastructure strategy and without stable funding will result in the continued deferral of significant capital projects.
• ARIO will need to work collaboratively with the ministry and industry stakeholders to develop strategic relationships for future infrastructure projects. An increased allocation of funding from the province or other sources will be required to address the rapid rate of inflation with respect to materials, equipment and labour costs to effectively implement the infrastructure strategy at or near the originally planned scope.

Availability and cost of fertilizer

• The Ukraine-Russia conflict have had significant impacts to the availability and cost of fertilizer in the agri-food sector in Ontario.
• To increase the domestic supply of fertilizer options, the government of Ontario announced in September 2022 the province is investing up to $2 million over 2 years in the Fertilizer Accelerating Solutions and Technology Challenge. The challenge aims to address the ongoing supply chain challenges for fertilizer, while promoting innovation in the province’s agri-food sector to reduce dependency on imported products.

Food supply chain impacts

• In March 2022 the Canadian Food Inspection Agency (CFIA) confirmed highly pathogenic avian influenza (HPAI) had been detected in poultry flocks in Ontario for the first time since 2015. Since the first confirmed outbreak for avian influenza (AI), OMAFRA has been actively engaged in the Ontario portion of an intensive nationally led response to contain the disease (where outbreaks occur, culling the flock is practiced whether infected or healthy, to contain the spread). Current animal diseases such as AI and future animal diseases such as African swine fever can represent potential significant economic losses for poultry and swine producers including food supply chain impacts.
• Current and future animal diseases may also pose operational impacts to ARIO research facilities. For example, ARIO poultry research facilities have adjusted in response to the most recent outbreak with enhanced bio security measures to safeguard the research flock and limit potential exposure.

The Ontario Agri-Food Innovation Alliance agreement and Sustainable Canadian Agricultural Partnership

The OMAFRA – University of Guelph agreement (branded as the Ontario Agri-Food Innovation Alliance agreement and the alliance) with the University of Guelph and the Sustainable Canadian Agricultural Partnership (Sustainable CAP) agreement with the federal government are 2 significant funding arrangements that will have an impact on ARIO’s research stations and future research projects.

The ministry and university have successfully concluded negotiations for a new 5-year alliance agreement from 2023-2028.

The alliance supports agri-food and rural research, laboratory services, veterinary capacity, research station management and regulatory training for the agri-food sector. The Ministry has had comprehensive agreements with the University of Guelph since 1997, with the new agreement positioned to provide fundamental programming that is critical for the province to:

• support public confidence in, and competitiveness and productivity of, the agri-food sector through activities that provide assurance in food safety and quality, protect plant, animal and related public health and that support environmental sustainability.
• ensure that Ontario has the tools and ability to respond to emergencies quickly and effectively within its agri-food sector, including disease outbreaks and extreme or sudden unpredictable events that threaten the viability and security of the agri-food sector.
• support an effective agri-food research and innovation system that:
  • sustains core capacity and that may generate new capacity to undertake world-class research
  • maximizes the use of research infrastructure in a manner that provides benefits to all of Ontario’s regions
  • informs evidence-based public policy
  • increases public awareness and dialogue
  • supports the commercialization of new technologies 
  • fosters frequent and quality collaboration among the agri-food and rural research community, the university, the agri-food sector and rural Ontario
• support the development of a skilled workforce that is ready for employment opportunities offered by the agri-food sector and rural Ontario, including development of highly qualified veterinary capacity to meet Ontario’s needs.
• grow third-party investment in research, innovation and data initiatives, which are focused on the agri-food sector and rural economic development.
• improve access to and sharing of data to facilitate new agri-food and rural research and the application of research funded under the agreement.

The new alliance agreement will also continue to create new opportunities to collaborate with key stakeholders on the delivery of the alliance’s common goals and objectives throughout the province by attracting private and public sector investment and collaborations in support of agri-food research and innovation. With respect to ARIO’s research stations, the new agreement is poised to:

• facilitate the use of the ARIO research stations as platforms for research and innovation, including the promotion and formation of collaborations among the agri-food and rural research community, the University, the agri-food sector and rural Ontario
• operate, maintain, and repair the ARIO properties in a manner that is cost effective, environmentally responsible, demonstrates economic value for the Province of Ontario and is consistent with and in furtherance of the agricultural and rural research and innovation
• maximize the use of research infrastructure available at the ARIO research stations in a manner that provides benefits to Ontario’s agri-food sector and rural communities

The alliance is a significant economic driver in Ontario, returning an estimated $1.44 billion^{footnote 1[1]} to Ontario’s GDP, well beyond the province’s investment.

The Ministry and the University of Guelph worked together throughout summer and fall 2022 to negotiate an agreement that reflects their joint vision that supports the success of Ontario’s agriculture, food processing and bioproducts sectors, the vibrancy of its rural communities, and the health and well-being of the province’s citizens and the environment.

The new agreement enables and aligns with ARIO’s Strategic Plan including:

• increased Government of Ontario and ARIO visibility at research centres
• provisions that encourage greater access to the research centres by third parties
• commitment to Indigenization, equity, diversity and inclusion
• continued management of certain ARIO research centres by the University of Guelph

The Sustainable CAP began on April 1, 2023 and is the next iteration of a federal-provincial-territorial (FPT) framework that funds a breadth of projects, including agriculture research projects. The previous 2018-2023 framework was the Canadian Agricultural Partnership (CAP). Ontario’s Sustainable CAP program areas include research and innovation, productivity and growth, protection and risk resilience, and stewardship with a goal of a sustainable, resilient, trusted and thriving Ontario agri-food sector that innovates to drive integrated economic growth and one-health solutions. This next agreement may create opportunities for additional investment in research programming and capital projects at the research properties that align with provincial priorities. It could also enable increased opportunities for innovation demonstrations and technology deployment at ARIO’s research stations.

Beyond these 2 key initiatives which drive significant research and innovation in Ontario today, 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.

COVID-19: response, emergency preparedness, business continuity and digital delivery

• During the early phases of COVID-19, ARIO in consultation with OMAFRA and the University of Guelph put in place additional policies and procedures to support the essential research operations. The purpose of the plan is to help minimize the impact of an emergency or incident on the research stations and to allow operations to return to normal as soon as possible.
• More than 3 years since cases were first reported, the COVID-19 pandemic remains a global emergency.
• To date, there have been minimal impacts on research and the day-to-day operational activities of the ARIO research stations. The research system is now largely operating under normal conditions with the impacts of COVID-19 being mitigated and operationalized to allow research to carry on.
• Most research activities resumed in June 2020 under COVID-19 protocols including the implementation of a vaccination mandate in 2021-2022 requiring all people who access the research stations to be vaccinated unless they had a valid exemption.
• Overall, ARIO research stations have sustained substantial research activities with research productivity to return to near normal levels in 2022-2023, depending on any resurgence of the virus.
• To ensure business continuity ARIO research stations maintain an emergency response plan and a business continuity plan that outlines how the ARIO research stations will continue operating during an unplanned disruption in services. These plans are updated annually based on feedback from the emergency simulation exercises at the ARIO research stations.
• ARIO continues to evolve the agency’s digital delivery since COVID-19.
• Since COVID-19, ARIO has adopted a digital and hybrid approach to ARIO member meetings. This cost-effective approach offers ARIO members with the flexibility to engage virtually from any region.

Grow Ontario: a provincial agri-food strategy

• The agri-food sector’s vulnerabilities include labour shortages, outdated supply chain infrastructure and declining processing capacity. Vulnerabilities to Ontario’s food supply have been evidenced by temporary shortages, creating consumer concerns around food security.
• Innovation and technology have been identified as key to a secure, safe and resilient agri-food supply chain. However, technology adoption is one of the most prevalent barriers limiting the global competitiveness and productivity of Canada’s agri-food sector. COVID-19 exposed critical deficits (such as low automation with modern equipment) in processing capacity that put the food security of Ontarians at risk.
• In response to the sector’s vulnerabilities, the government of Ontario announced in November 2022 the plan to build a strong, secure food supply chain and securing the province’s position as a food leader in Canada through new innovations with the release of Grow Ontario.
• The strategy focuses on 3 key priorities: strengthen agri-food supply chain stability, increase agri-food technology adoption and attract and grow Ontario’s agri-food talent.
• Under the strategy’s 3 priorities there are a number of goals the province aims to achieve which are to increase:
  • the consumption of food grown and prepared in Ontario by 30%
  • the production of food grown and prepared in Ontario by 30%
  • Ontario’s food and beverage manufacturing GDP by 10%
  • Ontario’s agri-food exports 8% annually
  • the number of patents (over 250) and licenses granted through OMAFRA by 2030
• Grow Ontario has emphasized ARIO’s role in support of enabling the province’s Strategy and the activities the agency may pursue under priority 2: increase agri-food innovation and adoption. These include:
  • reviewing the ARIO Act and bring forward proposed legislative amendments to meet the future needs of the sector, including innovation and technology as a key area of focus.
  • expanding the agency’s engagement and work with sector partners to strengthen the agri-food research ecosystem and increase opportunities for innovation demonstrations and technology deployment at ARIO’s research stations to address industry opportunities.
  • continued investments in research infrastructure to encourage the use of innovation and enhance the sustainability and profitability of the agri-food sectors. This includes the completion of the new Swine Research Centre at Elora and the development of the new Poultry Research Centre.

Environment and climate change

• Changing climatic conditions are having a global impact, and an impact on the Ontario agri-food sector. The continued 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, energy efficient systems and technologies to improve their climate resiliency and to build resilience and competitiveness into their production and processing enterprises.
• ARIO continues to lower the overall intensity of its carbon and environmental footprint through the ARIO infrastructure strategy, which seeks to replace aging research facilities that are inefficient and are costly to operate and maintain with new and modern facilities based on modern building codes. New facilities operate more efficiently with inputs and resources in the areas of heating, water usage and emissions.

Safeguarding research and intellectual property

• Publicly funded open and collaborative research has long been a driver of Ontario’s innovation economy and prosperity. However, against the backdrop of a contentious geopolitical environment, hostile state actors and foreign competitors are targeting Ontario institutions, talent and clandestinely accessing infrastructure, data and systems.
• ARIO is working with OMAFRA and the Ministry of the Solicitor General to enhance research and intellectual property security. This includes strengthening due diligence conditions to minimize risk associated with the operation and management of publicly invested research and infrastructure, while maintaining a safe global research ecosystem.
• ARIO will continue to engage with other Ministry partners such as the Ministry of Colleges and Universities (MCU) and the Ministry of Economic Development, Job Creation and Trade (MEDJCT) to ensure the framework is aligned with broader government mandates.

Connecting Ontario through broadband and Southwestern Integrated Fibre Technology (SWIFT)

• The government is investing nearly $4 billion to ensure every community across the province has access to high-speed internet by the end of 2025. To date, over $950 million has been allocated to nearly 190 high-speed internet, cellular and satellite projects. The government is also investing more than $63 million in the SWIFT project to bring high-speed internet access to 63,000 more homes, businesses and farms across Southwestern Ontario.
• To date, over 40 of 97 SWIFT projects have been completed, bringing high-speed internet access to over 30,000 homes and businesses. Construction is underway for the remaining projects and is expected to be complete by 2023.
• Broadband access continues to remain a challenge for ARIO properties, given they are located in rural parts of Ontario. The agency will explore options through its minor capital program (MCP) for ways to capitalize on any new fibre optic corridors with access to our research stations in rural and remote areas to increase access to broadband.

ARIO’s strategic direction: implementing the annual letter of direction and overview of current and future programs and activities

The work on the development of the ARIO strategic plan 2023-2028 is largely complete and the agency is focused on the implementation plan.

In the upcoming year, efforts will continue to further develop the ARIO strategic plan’s key pieces of work to include outputs, outcomes, objectives and performance measures that ARIO will work towards to achieve the agency’s long-term objectives. ARIO members will continue to be consulted on ARIO’s strategic plan to provide advice and ensure alignment with the annual letter of direction, the innovation and technology elements of Grow Ontario and the province’s broader research priorities.

The ARIO strategic plan’s long-term objectives focus on infrastructure, advice, strategic relationships and communications.

Infrastructure pillar: maintain and modernize operationally efficient research platforms that enable economic growth and a diversity of innovative solutions for the agri-food sector

Provide managerial oversight

ARIO will continue to provide operational and managerial oversight of the province’s 14 agri-food research properties, comprised of over 225 buildings and 5,450 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. This includes, overseeing 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.

The core investments in the renewal of research infrastructure will maintain the sustainability and competitive advantage of Ontario’s agri-food sector.

Infrastructure strategy 2.0

In support of the ministry’s mandate to support growth of the agri-food and agri-products sector, ARIO plays an important role in renewing the research capacity of the research station portfolio. 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.

Under the first phase of the infrastrcuture strategy from 2008-present, the agency made considerable progress in revitalizing the research system through targeted investments in new field crops, livestock and greenhouse facilities. In the early phase of the infrastructure strategy, it was recognized that livestock and greenhouse research facilities across the system were well past their planned life cycles, expensive to operate and prohibitive to retrofit given the complex nature of their operations and with some of the highest rates overall for research utilization. Investments in new facilities with support from industry improved the capacity and types of research that could be performed to support the competitiveness and sustainability of the sector.

It was also recognized in 2008 that some assets were in such poor shape that a consolidation and disposition strategy was also required as there were many assets no longer fit for research and/or could no longer be meaningfully brought back into service.

Under the new infrastructure strategy 2.0, key projects and strategic opportunities will be identified to enable the long-term research and innovation objectives of the agri-food sector. The strategy will continue to invest in building new state-of-the-art infrastructure pending available funding, and advocate for continued and stable funding which addresses the ongoing research infrastructure needs of the sector, that lead to a competitive and sustainable industry that is a global leader in multiple disciplines of applied agri-food research. ARIO will strive to be more intentional in all areas of work, including:

Infrastructure projects

• Investments in both hard (such as bricks and mortar) and soft (such as data, digital equipment, virtual platforms) infrastructure.

Strategic oversight

• Providing effective long-term oversight and management of ARIO’s physical assets through the development of an asset management policy and comprehensive asset management plan.
• Advocate for stable and continued funding for core capital projects while also exploring new funding models to fund future projects through strategic relationships.

Business priorities: major capital projects

ARIO will continue to implement and complete the construction of new major research infrastructure projects across the research station portfolio in the upcoming years in line with available funding. These include:

Ontario Swine Research Centre, completion – Elora

• In early fall 2021, ARIO and Ontario Pork commenced construction of a new swine research centre at the Elora Research Station.
• The new centre at Elora will replace the present facilities at Arkell which were constructed in the early 1980s and are well past their useful lifecycle, costly to operate and difficult to retrofit due to age. 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. Completion of the project is expected in summer 2023.

Ontario Poultry Research and Innovation Centre, renewal – Elora

• As part of ARIO’s infrastructure strategy to consolidate research properties, the agency is continuing to engage with the poultry sector on the development of a new Poultry Research Centre in Elora.
• A new centre at Elora will replace the present facilities at Arkell which were constructed in the early 1980s and are well past their useful lifecycle, costly to operate and difficult to retrofit due to age.
• Discussions with the poultry sector continue to unfold throughout fiscal 2023-24 towards solidifying an agreement that will confirm industry support for the new centre and enable the eventual design and construction.

Other future major capital projects of high priority

Research Feed Mill – Elora

• A new feed mill will replace the current aging facility at Arkell which is well past its planned lifecycle and prohibitive to retrofit.
• A new feed mill will support advanced nutritional research trials for both the swine research herd and poultry research flock.

Ontario Crops Research Centre – Elora

• A new crops research centre will add new research capacity and platform capability to provincial field crops research and replace the current aging infrastructure that is well past its planned lifecycle and limiting for advanced research.

Research stations operations (RSO) Centre – Elora

• Renewed RSO facilities will greatly enhance the operations and logistics of the Elora Research Station with positive impacts for both the field crops and livestock research platforms.
• New RSO facilities will result in improved maintenance and operations efficiency across the Elora property.

Aquaculture upgrades - Alma

• Future upgrades to inground infrastructure and tanks and fish handling equipment.
• Upgrades will broaden the types of research that can occur at the Alma aquaculture station.

Business priorities: infrastructure and strategic oversight

The next phase of the ARIO infrastructure strategy 2.0 will also strategically advance enhanced analytics for investment decision making. This will primarily focus on the development of the following:

Asset management policy and plan (AMPP)

• The AMPP will consist of policies and principles that drive improved asset management within ARIO. This approach aligns with broader government policy for managing provincial assets.
• The AMPP will enable ARIO to optimally and sustainably manage its assets, and asset systems, their associated performance, risks and expenditures over their lifecycle for the purpose of achieving ARIO’s infrastructure strategy 2.0 (major capital and MCPs). This approach will enable ARIO to make informed decisions on the maintenance, retrofitting and replacement of core research assets now and in the future.
• Further development of decision metrics focused on investments with the highest return on investment (ROI) related to public good, sustainability and competitiveness outcomes for the sector.

Policy development and strategic planning for ARIO infrastructure

In support of enabling Grow Ontario, ARIO secretariat will continue its work on policy development and strategic planning for strategic relationships with the private sector in support of potential future innovation opportunities. This includes:

• pursuing strategic relationships to continue funding the modernization and renewal of research infrastructure platforms and strategic relationships that expand innovation demonstration and technology deployment activities at research stations
• developing a framework to effectively evaluate strategic relationships

Enhancing digital and data infrastructure in connection with Ontario’s open data directive

ARIO will work towards using data-driven solutions to inform decision making by enhancing the digital and data infrastructure at ARIO research stations and the agency’s financial management system. This includes:

• enhancing broadband access at research stations
• harnessing data from research stations and publishing data when possible
• creating improved data linkages across research platforms
• continuing to support Ontario’s Open Data Directive
• sharing datasets online to increase transparency and accountability and to encourage innovation and solve problems through new ideas and applications
• continuing to modernize the agency’s accounting and financial management system to enable ARIO to enhance the agency’s ability to monitor business performance, improve financial reporting capabilities, increase efficacy and the agency’s transparency and financial accountability

ARIO MCP

The ARIO MCP is an ongoing multi-year program that allocates funds across the ARIO property portfolio to support significant investments in addressing maintenance, upgrades, program related systems, equipment and building/site infrastructure. The MCP is in line with ARIO’s broader infrastructure strategy to target development and renewal of ARIO’s core research infrastructure, and to support the move away from aging infrastructure by creating operational efficiencies. Criteria for determining MCP needs on an annual basis is guided by priority areas such as human health and safety, animal health and welfare, code compliance, building integrity, life cycle replacement, efficiency, conservation and program capacity (maintain or improve) that affect building and program operations across the network of ARIO properties.

MCPs

Annual minor capital plans are submitted to ARIO by the University of Guelph and Vineland Research and Innovation Centre (VRIC) and approved at the beginning of each fiscal year outlining the priority projects for each research station. These projects can be completed throughout the fiscal year or can cover multiple fiscal years depending on the size and scope of the project.

The program is funded through an annual transfer payment from OMAFRA to ARIO.

Minor capital project priorities

• Ontario Aquaculture Research Centre - Alma: quarantine, isolation, recirculation facility upgrades, $1.75 million (Total of $4 million total over 5 years)
• Elora property: utility upgrades, $2.5 million total over 5 years
• New Liskeard property: pasture/seasonal grazing infrastructure upgrades, $1.5 million over 5 years
• Vineland property: high speed fiber infrastructure upgrade, $40,000; Farm irrigation system upgrades, $35,000
• Ponsonby General Animal Facility: Year 1 of facility upgrades and expansion; redevelopment of underutilized spaces, $2.5 million multi-year budget
• Ontario Crops Research Centre – Simcoe: Year 1 of the design and implementation of the greenhouse replacement, $3 million multi-year budget

Property management

The University of Guelph and the VRIC, in addition to providing program delivery, property manage, and maintain and modernize infrastructure at ARIO’s research stations to address research needs. Additionally, University of Guelph and VRIC provide oversight of the MCP across all of ARIO’s properties.

VRIC

The ARIO-owned Vineland Research Station is managed by VRIC who is an independent, not-for-profit, horticultural research and innovation centre created in 2007. VRIC is led by an independent board comprised of leading industry representatives. VRIC’s vision is to “be recognized as Canada’s leader in horticulture research and innovation.” Their resulting value proposition to Canada and the horticultural sector is to strengthen Canadian companies by making them globally competitive through the application of Vineland supported innovation.

OMAFRA, ARIO and VRIC staff frequently collaborate on research projects and industry initiatives including collaborating with staff from the Agriculture Development Branch (ADB) on specific projects related to their specialty commodities, such as sweet potatoes, pest management, greenhouse tomatoes, hazelnuts, tender fruit and most recently on long-cane raspberries.

Advice pillar: enabling innovation and long-term research capacity across the province through strategic advice

ARIO is committed to providing the best advice to the Minister on strategic agricultural research directions that are in line with government priorities. The ARIO chair has continued with the practice of providing research-related recommendations to the Minister following ARIO meetings. This practice creates a direct and frequent means for the provision of research advice from ARIO to the Minister and will continue in future years.

The agency will also continue 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.

The business priorities in this section provide detail on how ARIO will enhance its research systems intelligence and advice for the long-term success of the agri-food research ecosystem and competitive and sustainable agri-food sector.

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

ARIO provides strategic direction to inform OMAFRA’s research agenda which provides consolidated documentation of current research and science needs. ARIO supports the ministry to communicate, explore, strategic relationships and jointly invest in research activities to yield new knowledge, skills and solutions for key areas of impact within Ontario agriculture and agri-food sector and rural communities.

Throughout 2023-2026, ARIO will have a greater role in providing strategic advice to the ministry on research priorities and will be an enabler of collaboration on research priorities between academia, government and the industry in the following ways:

• Provide insights across agriculture and agri-food sectors by enabling and providing advice on the OMAFRA research agenda that aligns with industry and government research priorities.
• Provide advice on Knowledge Translation and Transfer (KTT) activities such as the communication of research findings for a wide variety of audiences to ensure relevancy and applicability for on-farm or in-plant daily practices.

Proposed ARIO Act modernization

In 2022, ARIO initiated the process to propose the modernization of the ARIO Act to ensure the agency remains relevant in the context of today’s modern agri-food innovation and research environment and be on the cutting edge of research and innovation for the future.

In 2023, the agency will continue to assess potential legislative options to modernize the ARIO Act through targeted agri-food stakeholder consultations from which recommendations on proposed legislative changes are expected to come forward for the Minister’s consideration in 2023.

Stakeholder consultations will be used to identify potential changes to the ARIO Act to enable a more competitive and sustainable agri-food research environment with a broader focus on the research needs of the Ontario agri-food sector and harmonized to better support OMAFRA’s Grow Ontario Strategy.

Research system project: review and synthesis of the Ontario agri-food and rural research system

In April 2022, ARIO began the research system project that reviewed and synthesized the extent of investment in the Ontario agri-food and rural research system so that ARIO might optimize the agency’s advice on research programming and deliver greater impact from ministry and ARIO-funded research. The research system project included data collection (such as literature review, interviews with key stakeholders and a broader survey of agri-food stakeholders) data analysis, recommendations and a final report.

The data and analysis from the research system project will inform ARIO’s next steps to maximize the ROI for research in the province and align resources to support the optimal use of research dollars and inform policy/program design decisions.

ARIO intellectual property strategy

Part of ARIO’s role includes the management and administration of ARIO intellectual property interests. ARIO and OMAFRA are looking to better understand and optimize the management of their intellectual property interests.

In July 2020, the Ontario government launched the intellectual property action plan – a comprehensive strategy to maximize the value of Ontario-grown research and innovation. The action plan consists of a series of initiatives focused on generating, protecting, managing and commercializing intellectual property. From the intellectual property action plan, Intellectual Property Ontario (IPON) was created. IPON is Canada’s first provincial intellectual property focused agency. The agency operates closely with MCU and MEDJCT. IPON’s clients will be drawn from the postsecondary education and innovation sectors to increase access to intellectual property strategy advice, legal expertise and educational resources across the province.

In 2021, the ARIO secretariat completed an intellectual property strategy review which included an analysis and recommendation for improved strategic management of ARIO’s intellectual property and commercialization processes and activities.

The strategy review informed ARIO’s intellectual property and commercialization processes in the following ways:

• Recommended best practices for ARIO’s future model of administration and management intellectual property. Identify future or emerging intellectual property, commercialization and innovation needs and broader impacts to the agri-food sector and rural communities.
• Inform ministry policy decisions on commercialization and innovation programming. Identify opportunities to increase government non-tax revenue streams.
• Ensure effective and efficient use of government funds supporting the commercialization system.

In alignment with the direction of the Ontario government’s 2020 intellectual property action plan, the 2021 OMAFRA intellectual property strategy review, and the Grow Ontario Strategy, the agency in collaboration with OMAFRA will continue to develop an intellectual property strategy that will align with IPON. By doing so, the agency will enhance the strategic alignment, management and administration of intellectual property and related commercialization support activities.

ARIO breeding reinvestment program

The Ontario Agri-Food Innovation Alliance and ARIO have a long history of supporting breeding research to advance the agri-food sectors. Historically, the Plant Germplasm Revenue Reinvestment Program (PGRRP) delivered through ARIO has funded researchers at the University of Guelph to produce new, high-value plant varieties and animal genetics that support the agri-food sector.

The PGRRP was paused in 2020-2021 to allow ARIO time to explore options to reinvest ARIO’s proportionate share of the intellectual property revenue more strategically and further advance livestock and plant breeding programs within the province.

ARIO is in the process of analyzing the scope, focus and other design elements of a new potential breeding program. The anticipated timeline of phased implementation for the new breeding program will begin in spring 2023.

Safeguarding research and intellectual property

OMAFRA, ARIO, and the Ministry of the Solicitor General (SOLGEN) are taking steps towards due diligence in intellectual property and research security. SOLGEN is working with OMAFRA and ARIO to develop a risk-based assessment process to evaluate potential economic and/or geopolitical risks associated with proposals submitted for government funding and/or support in order to close any security gaps and mitigate risk.

Grow Ontario: a provincial agri-food strategy

Innovation and technology have been identified as being key to a secure, safe and resilient supply chain. Grow Ontario outlines a plan to strengthen the agri-food supply chain through the adoption of innovation and new technologies that strengthen the sector and enhance the competitiveness and create new growth opportunities.

In Grow Ontario, ARIO has been identified as a key enabler for the deployment and adoption of new technologies. In line with Grow Ontario, ARIO will work with OMAFRA and engage with industry to:

• review the ARIO Act and bring forward proposed legislative amendments to meet the needs of today’s farmer, including proposing innovation and technology as a key area of focus.
• build and maintain world-class research infrastructure to encourage the use of innovation and enhance the sustainability and profitability of the agri-food sectors. This includes work with the sector to maintain the modern research corridor in Elora including the new the Ontario Swine Research Centre and build the new Poultry Research Centre of Ontario.
• increase research strategic relationships and joint investments with the private sector. Develop programming to support commercialization, piloting and demonstrations of new technologies and to apply new innovations on farm, in processing facilities and throughout the broader supply chain.
• strengthen the ongoing research program management and, working with Intellectual Property Ontario, increase agricultural intellectual property generation.
• harness data form research stations including publishing data when possible, to grow the use of data to support business decisions and increase efficiencies within the agri-food sector and value chain.
• attract and grow Ontario’s academic and technical expertise, ensuring flexibility in education and multidisciplinary experiential learning so that students gain the high-tech skills required – including robotics, automation and genomics – to meet the needs of the modern agri-food sector.

Indigenization, equity, diversity and inclusion (IEDI)

The ministry has developed an anti-racism action plan (ARAP) in 2021. OMAFRA has a responsibility to lead by example to promote racial equity where staff are meaningfully included and respected in the workplace, whether that is in an OMAFRA office, in the field or in a third-party workplace.

In line with the ministry’s commitment to anti-racism, ARIO will follow the objectives of OMAFRA’s ARAP through the strengthening of IEDI in both the alliance and within the agency.

ARIO will also continue to deepen our collective understanding of the legacy of the Indian Residential School System in Canada and its continued impacts on the lives of Indigenous peoples across the country. As an agency of OMAFRA, ARIO remains committed to supporting Ontario’s work as it relates to the National Truth and Reconciliation Commission of Canada’s calls to action.

ARIO works closely with many Indigenous peoples, nations, communities and organizations, as ARIO properties are located across numerous traditional territories and treaty lands. ARIO continues to engage with Indigenous peoples, communities and organizations to strengthen meaningful relationships. ARIO has a legal obligation to consult with Indigenous peoples where it contemplates decisions or actions that may adversely impact asserted or established Indigenous or treaty rights.

ARIO is committed to meeting its duty to consult with First Nations and Métis communities. ARIO is committed to reducing barriers to access programs and supports that enable research and infrastructure within the agri-food sector.

In the upcoming year ARIO will build, strengthen and advance IEDI values and priorities within the agency in order to inform all facets of ARIO’s function. The agency’s business priorities regarding IEDI are as follows:

• ARIO will advance the agency’s knowledge capacity and historical awareness and will strengthen meaningful and respectful relations with Indigenous peoples, communities, nations and organizations. As an ongoing standing item at ARIO member meetings, the agency will commit to learning and discussing opportunities for the agency and its members on government-Indigenous relations.
• Recognizing Indigenous leadership and contributions are essential for realizing meaningful Indigenous inclusion and equity, ARIO will take steps to canvas for a new member appointment that serves as ambassador at large for agri-food research and is recognized as a leader within Indigenous communities and organizations.
• The agency’s IEDI commitments will demonstrate its ongoing support and leadership to advancing IEDI principles in the “Ontario Agri-Food Innovation Alliance Agreement” between OMAFRA, University of Guelph and ARIO, particularly as they relate to research infrastructure.
• The agency’s IEDI leadership and work will also serve to advance the ministry’s commitments made under the ARAP.

Strategic relationships pillar: enhanced collaborations and global expertise

ARIO will continue to advance its work on ARIO strategic relationships in support of industry-government research and innovation priorities including the Grow Ontario Strategy. In the coming year, ARIO will take steps to continue its work on policy development for ARIO partnerships including developing a framework to evaluate potential strategic relationships and the agency’s approach for engagement with private entities.

Business priorities: ARIO partnerships

As the agency continues to advance its work on ARIO strategic relationships, ARIO will begin to take steps to developing an effective assessment framework for evaluating intellectual property risk and research security to mitigate possible risk with potential ARIO strategic relationships s and to maximize the value of Ontario-grown research and innovation. ARIO will continue to engage with other ministries, such as MCU, SOLGEN and MEDJCT to ensure the framework is aligned with broader government mandates.

Communications pillar: optimized

ARIO will initiate a process to implement an optimized communications plan for the agency with a key goal to increase awareness both internally in OMAFRA and externally. Sharing ARIO’s key mandate and how the agency works to ensure a competitive agri-food sector through investments in capital intensive research platforms.

Business priorities: ARIO communications

Refreshed and permanent station signage

ARIO will continue to work with the University of Guelph and VRIC to create updated and permanent ARIO station signage at each of the 14 centres to raise the profile of the agency and champion ARIO’s infrastructure investments in research and innovation across the province. This communications initiative will spotlight the province’s ongoing investment in Ontario’s agri-food sector.

ARIO communications material

ARIO will work towards developing tools and communications materials (external and internal materials) to support the ministry, the agency and its members to effectively communicate the agency’s mandate, opportunities and successes.

ARIO’s communications plan

Objectives

• 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, initiatives and priorities.

Key messages

• Scientific research and innovation 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 performs across a wide variety of sectors and 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. Strategic relationships, 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

ARIO will be updated on new communications and networking opportunities as they arise and are confirmed.

Resource requirements to meet objectives, mandate and strategic directions

Resources to meet ARIO’s goals and objectives are provided through the following:

• The Ministry, through the secretariat provide ARIO with the ongoing administrative support and funding needed to effectively operate the agency. The ARIO secretariat is comprised of OMAFRA employees within OMAFRA’s Research and Innovation Branch (RIB).
• ARIO receives annual transfer payment funding from OMAFRA for the MCP and payment in lieu of taxes.
• ARIO major capital funding concludes as of March 31, 2023, and the agency has expressed concern for continued and stable funding to support the implementation of the infrastructure strategy. Without some form of continued major capital funding, core infrastructure projects planned with the strategy will be deferred indefinitely pending the provision of available funding and end of life assets will be wound down.
• Implementation of the planned ARIO’s infrastructure strategy is updated and approved annually as a key component of OMAFRA’s strategic planning process (SPP).
• ARIO receives revenue from leasing land and buildings within its infrastructure portfolio. This revenue is used to offset and cover the full cost of the rising cost of payments in lieu.
• ARIO receives intellectual property revenues realized from research funded under the Ontario Agri-Food Innovation Alliance Agreement.
• For infrastructure projects, ARIO continues to seek out non-government sources of capital investment from industry partners (such as commodity organizations). The current model being used whereby industry will provide 20% of the capital costs of any new construction/redevelopment projects.

Anticipated spending incurred by OMAFRA on behalf of ARIO

ARIO governance

ARIO members play a key role in providing advice on the agency’s objectives, mandate and strategic directions.

ARIO’s membership is comprised of up to fifteen members appointed by the Minister of Agriculture, Food and Rural Affairs. 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. There are currently eleven members and one ex-officio member from Agriculture and Agri-Food Canada (AAFC) who serves to contribute a federal perspective on research activities across Canada.

The ARIO chair, in consultation with the secretariat will continue 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. Specifically, the agency has identified that a new member appointment be sought for a leader within Indigenous communities and organizations within agri-food research. The appointment of new/additional members with knowledge and experience in innovation and commercialization would also be welcomed.

The ARIO director of research is appointed by the Minister under the ARIO Act and has responsibilities related to ARIO’s business affairs. The ARIO director of research is OMAFRA’s chief administrative office/Assistant Deputy Minister for the Research and Corporate Services Division. Operational decision-making and approvals are made by the ARIO director of research, or their authorized delegate(s), such as the director of the OMAFRA’s RIB, who serves as ARIO’s general manager, or RIB management and staff who serve as ARIO secretariat support. The duties and authority of the ARIO 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.

ARIO governance structure

• 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

Risk identification, assessment and mitigation strategies

Implementation of the ARIO infrastructure strategy 2.0 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.

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 4 years starting in fiscal 2019-2020. 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, deferred indefinitely or their scope reduced significantly to ensure ARIO can maintain affordability. Furthermore, 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 the ministry, 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 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.

Full details of ARIO’s risk management plan can be found in Appendix C.

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.

Read Appendix A 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 $1.67 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 ministry funds. Details are provided to members in the ARIO member’s handbook.

Financial projections (3-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 29 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.

ARIO is consolidated for financial reporting purposes with OMAFRA due to its close relationship, 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 3-year financial outlook to OMAFRA for financial consolidation purposes.

A forecasted balance sheet and financial statement showing projected revenues and expenses is included in Appendix B.

Performance measures

The performance measures and achievements outlined in this section are in accordance with the current performance measures framework outlined in the ARIO MOU and includes the focus of the ARIO’s infrastructure strategy 2.0. The infrastructure planning and management outcomes, performance measures and targets for 2023-2026 remain the same, unless otherwise noted as under development and to be determined.

Appendicies

Appendix A: ARIO’s statement of investment policy

General

This statement of investment policy expresses the investment objectives and constraints of 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):

• ensure safety of capital over a 1-3-year time horizon by investing in high quality fixed income securities, including government bonds and/or professionally managed pension level bond portfolios.
• 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 1 year.
• maximize the rate of return on the portfolio recognizing the constraints imposed by the previous 2 points.

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 5 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 (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 is to equal the appropriate market benchmark index over a full market cycle, namely, one to 3 years. 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 B: proforma statement of financial position

ARIO 2023–24 multi-year plan — forecast

Forecast of financial position — Form B support

Appendix C: 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.

Appendix D: 2023-2024 annual letter of direction

Dear Dr. Hepworth:

I am pleased to share our government’s 2023-2024 priorities for the ARIO.

As chair, you play a vital role in helping the ARIO achieve its mandate. It is important that your agency’s goals, objectives, and strategic direction continue to align with our government’s priorities and direction. As part of the Government of Ontario, agencies are expected to act in the best interests of the people of Ontario and ensure that they provide value for money to taxpayers. Agencies are also required to adhere to government policies and directives.

Per the requirements of the agencies and appointments directive, this letter sets out my expectations for ARIO for 2023-24. These priorities include:

1. Competitiveness, sustainability and expenditure management

• Identifying and pursuing opportunities for revenue generation through partnerships, where appropriate, including seeking opportunities to enhance use of research stations.
• Identifying efficiencies and savings through innovative practices, and/or improved program sustainability.
• Operating within the agency’s financial allocations.
• Complying with applicable direction related to supply chain centralization, including contract harmonization for planned and pending procurements, accounting practices and realty interim measures for agency office space.

2. Transparency and accountability

• Abiding by applicable government directives and policies and ensuring transparency and accountability in reporting.
• Adhering to accounting standards and practices, 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.

3. Risk management

• Developing and implementing an effective process for the identification, assessment and mitigation of agency risks, including any future emergency risks.

4. Diversity and inclusion

• Developing and encouraging diversity and inclusion initiatives by promoting an equitable, inclusive, accessible, anti-racist and diverse workplace.
• Support the strengthening of equity, diversity, and inclusion in the Ontario Agri-Food Innovation Alliance.
• Adopting an inclusion engagement process to ensure all voices are heard to inform policies and decision-making.

5. Data collection

• Improving how the agency uses data in decision-making, information sharing and reporting, to inform outcome-based reporting and improve service delivery.
• Increasing data sharing with Supply Ontario when applicable regarding procurement spending and planning, contract arrangements and vendor relations to support data-driven decision-making.

6. Digital delivery and customer service

• Exploring and implementing digitization to increase the agency’s operational efficiency and modernize ARIO’s accounting and financial management system.
• Using a variety of approaches or tools to ensure service delivery in all situations, including pursuing delivery methods that have evolved since COVID-19.

I am also sharing several priorities specific to ARIO:

Property management:

• Continue to provide value for money in efficiently owning and managing the Province of Ontario's agri-food research facilities and infrastructure.
• Continue to provide advice on the long-term strategic plan and recommendations for the province’s agri-food research infrastructure and 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 by developing state of the art, integrated research infrastructure capacity built on shared funding models and partnerships between industry and government.
• Pursue private partnerships in support of industry-government research and innovation priorities and modernizing research infrastructure.
• Continue to engage with the poultry sector on the development of a new poultry research centre in Elora.

Strategic planning and advice:

• Continue to provide strategic advice to the Minister and the ministry on current research priorities and programs that contribute to prosperous, competitive and sustainable agricultural and food sectors and rural communities in Ontario.
• Continue to develop and implement ARIO’s vision and strategic plan for Ontario’s agricultural future to be a global leader, empowered by transformational research and innovation.
• Continue to enable adoption of innovation by supporting the objectives of OMAFRA’s agri-food innovation and technology strategy.
• Implement strategies that will improve the strategic management of ARIO's interests in intellectual property and commercialization.

ARIO Act modernization:

• Continue to assess potential legislative and non-legislative options to modernize the ARIO Act to ensure the ARIO Act is more relevant to the current and future agri-food research environment in Ontario and harmonized to better support OMAFRA’s overall technology and innovation strategy, as well as evaluating operational tools to enhance the functions of the agency.
• Continue to lead stakeholder consultations to inform potential updates to the legislation in 2023.

Enhance collaborations, global expertise and partnerships:

• Increase collaboration with other universities/research institutions, industry organizations including Indigenous peoples, communities and organizations to enhance public/private partnerships and to leverage ARIO’s assets for the benefit of the province and agri-food sector.
• To directly engage with sector partners for the purpose of expanding innovation demonstrations and technology deployment through the ARIO research stations.
• Seek opportunities to leverage expertise and knowledge from around the world to address emerging issues and enable the sector to compete in the global market.

Communications

• Actively promote the research activities and network of research stations within the agri-food sector.
• Explore options to brand ARIO and the Province of Ontario to increase the prominence of the agency and the province within the agri-food sector.

I would be pleased to discuss these priorities during our next meeting, and I look forward to hearing how they will be reflected in the agency’s upcoming business plan and in ongoing agency operations.

Thank you and your fellow board members for your continued commitment to ARIO. Your work and ongoing support is invaluable to me and the people of Ontario.

Should you have any questions, please feel free to contact my office or Gregory Wootton, Assistant Deputy Minister, Research and Corporate Services Division.

Sincerely,

Lisa M. Thompson

Minister of Agriculture, Food and Rural Affairs

cc: Gregory Wootton, Assistant Deputy Minister, Research and Corporate Services Division