2019–2022 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, and economic growth and opportunities for rural Ontario. OMAFRA supports rural communities. Keys to achieving success include ensuring protection and assurance in the agri-food system (for example, food safety and animal, plant and human health); providing stewardship of Ontario's capacity to produce food (for example, soil & water quality, climate change) and fostering economic development of the agri-food sector and rural Ontario (for example, food processing, bio products).

The Agricultural Research Institute of Ontario (ARIO) is classified as a board-governed provincial agency reporting to the Minister of Agriculture, Food and Rural Affairs. ARIO is focused on ensuring Ontario maintains its competitive advantage in agri-food and agri-products research and innovation and concentrates its efforts in these four ways:

1. Providing strategic advice to the Minister on agri-food and agri-products research and innovation;
2. implementing the ARIO's Infrastructure Strategy to modernize the province's agri-food and agri-products research and innovation physical and virtual infrastructure;
3. Promoting the Ontario agri-food and agri-products research and innovation system; and
4. Providing administrative and managerial oversight of open research programs (for example, New Directions, Food Safety), and the 17 ARIO owned research properties with over 6,500 acres, 280+ buildings with a book value of approximately $80 million (eighty million dollars), and over 30 tenants that include government, not for profits, industry and private.

Key ARIO accomplishments for the 2018/19 fiscal year include:

ARIO's Infrastructure Strategy

Implementation of the ARIO's Infrastructure Strategy recommendations continued during 2018–19

Elora Research Station

• The University of Guelph, on behalf of ARIO, has completed a land use planning study for the Elora Research Station (including Alma and Ponsonby). This study identified suitable livestock development sites, areas for future crops research reorganization and expansion, future pasture expansion and utility implications. The University is reviewing and will submit land use planning study to ARIO in early 2019–20.
• Construction of a new beef research facility began in the fall of 2017 and continued through the current fiscal year. Phase 1 is expected by the summer/fall of 2019 with the rebuilding of the existing beef feedlot to follow.
• Discussion with Ontario Pork on a new swine research facility to replace the existing Arkell facility continued. Detailed planning has begun on the new facility to be located at Elora, with construction anticipated to start in spring 2020.
• Discussion and planning around the renewal of field crops research infrastructure at various ARIO research station sites across the province.

Other centres

• Construction is underway on a new field crops research services buildings in Winchester. Completion of the Winchester building is expected in the spring of 2019.
• Construction is expected to start in the spring of 2019 on a new Agronomy Research Building in New Liskeard with completion in 2020.
• Planning continued on a new facility for the Guelph Turfgrass Institute and the relocation of research plots with detailed site design and plot construction is underway.
• A master site planning exercise is underway at the Ridgetown campus. This exercise will impact future crops research infrastructure development.

Rationalization of ARIO's infrastructure portfolio

• ARIO reached an agreement to sell a significant portion of the Kemptville campus to the Municipality of North Grenville with the transaction closing at the end of the 2017–18 fiscal year. ARIO completed the sale of the lower campus (farm) portion of the Alfred campus to La ferme d'education et de recherche du campus d'Alfred (FERCA) in May of 2018. In 2018–19, ARIO has continued to complete infrastructure projects at these properties agreed to as a condition of the sale.
• During 2018–19 ARIO continued with the required due diligence to continue with the disposition of the remaining balance of lands at the former Kemptville and Alfred campus properties along with a portion of the New Liskeard property (the former college campus buildings and land) and the Guelph Turfgrass site.
• It is anticipated that these properties will be disposed of through the normal government realty disposition process in 2019–20.

Minor capital program

• The 2018–19 programs continued to focus on the completion of a number of existing large renovation projects. In addition, animal and human safety, regulatory and equipment failure issues were addressed on a case by case basis.
• Major projects in 2018–19 included preparation of new beef pastures at Elora, irrigation and laboratory upgrades at Simcoe and purchase of new crop and plot equipment at multiple locations.

Research programs

• The development of the Next Generation Research Management System (RMS) began in 2018. Completion of the project is expected in late 2019. This new system will replace the existing RMS when complete. The RMS is used by ministry staff who provide secretariat services to ARIO to administer the research programs delivered by ARIO on behalf of OMAFRA.
• Administration of OMAFRA's open research programs and other research programs (for example, Plant Germplasm Revenue Reinvestment and Quebec-Ontario Collaboration for Agri-Food Research).
• ARIO and Ministry if Training Colleges and Universities (now know as Ministry of Colleges and Universities) provided funding support of $1.65 million over 5 years for Lakehead University to take over operational control of the Thunder Bay Agricultural Research Station (TBARS). The station was previously operated by a local consortium known as the Thunder Bay Agricultural Research Association (TBARA). The funding will enable the transition of research station operations and research programming from the Thunder Bay Agricultural Research Association (TBARA) to Lakehead University and is expected to:
  • Increase the long-term sustainability of TBARS by embedding operations and research programming within Lakehead University's research system/priorities
  • Expand research programming and platforms with a broader reach across several fields of research
  • Enhance the research capability and capacity of Lakehead University through access to research station infrastructure and platforms
  • Support several fields of research benefitting the region and economy of Northwestern Ontario and the province as a whole.
• The New Directions Research Program issued a call for proposals with the following priorities: innovation for Ontario's agricultural systems and soils to reduce phosphorus loss; sustainable livestock production using precision technologies to support compliance and assurance systems; and disruptive technologies.

Strategic planning

• ARIO completed a strategic planning exercise in 2018–19. The draft report will be ready for review by the Minister appointed members of ARIO in early 2019–20.

While continuing the work of managing the current research infrastructure portfolio and the administration of OMAFRA's open research programs, ARIO recognizes the importance of continuing implement the ARIO Infrastructure Strategy and looks forward to developing and implementing the next phases of the ARIO's Infrastructure Strategy next year and in the years ahead.

Mandate and mission statement

Background

The Agricultural Research Institute of Ontario (ARIO) was created in 1962 and continues its mandate under the Agricultural Research Institute of Ontario Act. R.S.O. 1990, c. A.13 as amended (ARIO Act) and reports to the Minister of Agriculture, Food and Rural Affairs.

ARIO is classified as a board-governed provincial agency under the Agencies and Appointments Directive (AAD), with a mandate to, among other things, provide strategic advice to the Minister on agri-food research and related issues and interests, manage and hold funds (ARIO manages open research funds and other trust funds) and to acquire, maintain and dispose of real property for the conservation, protection and preservation of "agricultural lands" as defined by the ARIO Act.

ARIO's strategic priorities supporting OMAFRA's current goals and objectives are described in Section D and are summarized under four main categories as: 1) Strategic Advice, 2) Leadership — implementation of the ARIO's Infrastructure Strategy, 3) Promoting Ontario Agri-Food and Agri-Products Research & Innovation, and 4) Managerial Oversight — of the ARIO owned research infrastructure and open research programs.

ARIO mission statement

Within this legislative context, ARIO has adopted the following mission statement, in support of OMAFRA's vision for successful and sustainable agri-food and agri-products businesses:

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

The current MOU between the ministry and ARIO was revised to ensure alignment with the 2016 mandate review and the requirements of the AAD and was signed in June 2017.

ARIO's mandate for 2019–20

ARIO's mandate for the 2019–20 fiscal year is set out in the mandate letter for 2018–19 as follows is:

1. Property Management:
   • Continue to own and effectively manage the Province of Ontario's agri-food research facilities and infrastructure.
   • Continue to revitalize the province's agri-food research infrastructure necessary to support demand-driven research and the long-term sustainability and growth of the agri-food sector in Ontario through continued implementation of the ARIO's Infrastructure Strategy, by developing modern, state of the art, integrated research infrastructure capacity built on shared funding models and partnerships between industry and government.
2. Strategic Advice:
   • Continue to provide strategic advice to the Minister and the ministry on research issues and priorities that contribute to prosperous, competitive and sustainable agricultural and food sectors in Ontario.
   • Continue to be a key component of OMAFRA's research priority setting process providing long-term, strategic guidance for research program development as well as identification of short-term and emerging research priorities.
3. Promotion and Advocacy of Ontario's Agri-Food and Agri-Products Research and Innovation System:
   • Advocate for the value of OMAFRA's agriculture research system through focused outreach opportunities, building relationships between ARIO and industry stakeholders to broaden awareness, engage and seek support for research and innovation priorities and the research infrastructure renewal needed to maintain and strengthen Ontario's local, national and global competitiveness.
4. Efficient and Effective Administration:
   • Continue sourcing secretariat services from OMAFRA to provide effective and efficient administration of current ministry open research programs, financial operations and reporting, and all aspects of property management and capital revitalization through implementation of the infrastructure renewal strategy.
   • Continue to meet all Agency Accountability Directive (AAD) provisions and requirements.

Environmental scan

Building a sustainable and thriving agri-food research and innovation system

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

External factors

Legislative, regulatory or policy changes

• The Open Data initiative supports government efficiency, effectiveness and innovation. Faster and easier access to Government Data through a one-window data portal facilitates evidence-based policy, informs service delivery and promotes greater transparency and accountability. The Open Data initiative also supports public engagement and participation by allowing Ontarians to develop their own analysis, insights, and digital products.
  • ARIO has already taken steps to ensure that the open research projects are part of the ministry's Research Management System and that data is available to the public. Research project results are routinely made available to the public through knowledge translation and transfer events held by OMAFRA.

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.
  • ARIO will continue to plan to operate within budget and will continue to implement the infrastructure strategy to realize the value of provincial assets and its investments in research infrastructure, including the disposition of the remaining portions of the Alfred and Kemptville research stations.

Changes and trends in the environment

• Changing climatic conditions are having a global impact and will have an impact on the Ontario agri-food sector which will require research to adapt.
• The Ontario agri-food sector will need to invest in soil health and water and energy efficiency systems to build resilience and competitiveness into their production and processing enterprises.
• Consumer demand will continue to shape the agri-food sector and add more complexity. For example, citizens are requesting healthier foods to accommodate health, disease, intolerances, allergies and medicinal qualities (for example, ethnic foods, cannabis). To meet these demands, retailers are responding by requesting specialized products and more variety 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.
  • All of these changes and trends will demonstrate the need for research and the modern research platforms necessary to conduct the research. ARIO's research programs and infrastructure strategy are well positioned to meet the impact of these changes.

Demographic shifts, labour market conditions, labour relations and employment conditions

• 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 as well as adaptation to changing climatic conditions and emerging market opportunities. As the younger generation takes over leadership roles in the agri-food sector, adoption of technology will become more rapid.
• 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 Planning for Tomorrow 2.0 report recently completed by the Ontario Agricultural College (OAC) at the University of Guelph indicated that there are approximately four jobs for every OAC graduate entering the agri-food sector.
  • ARIO will remain committed to its role as advisor to the Minister on strategic direction for research activities that contribute to prosperous, competitive and sustainable agricultural and food sectors in Ontario. ARIO will also continue in its role as an advocate for the future of OMAFRA's agri-food and agri-products research system.

Internal Factors

Fiscal responsibility

ARIO secretariat remains committed to finding cost savings and identifying further efficiencies for program and service delivery. The Ministry staff who provide administrative secretariat services to ARIO will be a key resource to find cost savings in relation to the management of the research portfolio. ARIO will continue to seek a shared financial commitment (minimum of 20%) with industry on all research capital infrastructure projects.

Partnership Agreements

In 2018, OMAFRA signed the Canadian Agriculture Partnership (CAP) Agreement. CAP is a five-year commitment by Canada's federal, provincial and territorial governments that will support Canada's agri-food and agri-products sectors. CAP programming provides opportunities to address emerging priorities and challenges faced by our agri-food sector. Also, in 2018 OMAFRA signed the next OMAFRA-University of Guelph Agreement (known as the Ontario Agri-Food Innovation Alliance) that support research and innovation, lab services and veterinary capacity for the agri-food sector. ARIO provided input into the development of both of these initiatives.

• ARIO has been and will continue to provide input to the implementation of both of these significant multi-year initiatives and to the development of successor initiatives.

Ministry research priority setting and governance

• In 2015 OMAFRA launched its Research and Technology Transfer Review (RTTR) which was conducted over two years. Two key recommendations from the RTTR are currently being implemented and which will continue in 2019-20:
  • A new internal governance structure for research and science activities to support coordinated ministry-wide investment in research programming was put in place in January 2019.
  • An enhanced research priority setting process that aligns priorities with OMAFRA's core businesses and objectives, identifies the most appropriate funding mechanism and includes strategic and coordinated stakeholder engagement.
    • OMAFRA is undergoing its first research priority setting process under the new model in summer 2019. This new model will include a foresighting exercise that will engage ARIO in fall 2019.
• ARIO will play a strategic role in the implementation of these two activities as it relates to its mandate and will engage at various aspects to provide input and advice on the ministry's research agenda. Consideration of research infrastructure needs related to the outcomes of the ministry's research priority setting process, identification of emerging issues in the agri-food sector, and communication of research results and Knowledge Translation and Transfer opportunities are examples of ARIO's strategic role.

In conclusion, ARIO will continue to support the success of the agri-food sector by:

• Providing advice on research initiatives, while considering the economic, social, and environmental landscape.
• Supporting objective and unbiased research that advances the competitiveness agri-food sector and province's priorities.
• Implementing the ARIO Infrastructure Strategy to provide modern, state of the art research platforms.

Overview of current and forthcoming programs and activities

The Director of Research for ARIO, the ARIO Chair and ARIO members have been, and continue to be, responsible for these key programs and activities:

Provide leadership — Implementation of the ARIO's Infrastructure Strategy

• In support of the ministry's mandate, continue implementation of the ARIO's Infrastructure Strategy leading to a modern, integrated agri-food and agri-products research and innovation system with industry-influenced governance models and modern state of the art infrastructure capacity built on shared funding models between industry and government that includes:
  1. Consolidation of livestock research at the Elora research station, including working with industry to plan for the relocation of swine and poultry research to the Elora Research Station from the current Arkell Research Station where swine and poultry research infrastructure are nearing the end of their useful lifespan.
  2. Working with the Beef Farmers of Ontario and University of Guelph researchers to design and construct a new beef research facility at the Elora research station.
  3. Working with the turfgrass industry and the University of Guelph to develop and construct new research facilities and plot grounds supporting the turfgrass sector and commence relocation activities from the Guelph Research Station to the University of Guelph Arboretum and the Elora Research Station.
  4. Construct new field crop research services buildings in New Liskeard and Winchester (north and east).
  5. Continue to refine, develop and implement investment options in the three remaining centres (enhanced field crops; bioeconomy; food for health) originally proposed as part of ARIO's long-term Infrastructure Strategy.

Provide strategic advice

• Continue a strategic planning exercise initiated in 2018/19 to consider how future trends may impact the ARIO and its advice on ministry research priority setting and outcomes.
• Continue to advise the Minister on research priorities and issues related to the ministry's mandate to support growth of the agri-food sector, including expansion of agriculture in the north, enhancing sustainability efforts, promoting world crops, and driving economic growth across the value chain throughout the agri-food and agri-products sectors.
• Provide advice related to new Ontario Agri-Food Innovation Alliance.
• Provide advice to OMAFRA on the implementation of the Canadian Agricultural Partnership that took effect April 1, 2018.

Promote Ontario's agri-food and agri-products research and innovation

• Through focused outreach and communications opportunities:
  1. Raise awareness of Ontario's efforts to advance agri-food research and innovation programs, modernization efforts and strategic collaborations.
  2. Champion ARIO infrastructure investments and communicate the return on investment for ARIO investments supporting the research system.

Provide managerial oversight

• Provide operational and managerial oversight of the 17 agri-food research properties comprised of over 280 buildings, over 6,500 acres and over 30 tenants (both government and non-government) to ensure continuing effective and efficient management of the research property portfolio in support of the various research programs.
  1. The ARIO Minor Capital Program is used to support infrastructure projects related to human health and safety, animal care and well-being, code compliance, building integrity, life cycle replacement, efficiency and conservation, equipment replacement and cost containment to enhance program delivery and building performance.
  2. OMAFRA provides $4.5 million in annual funding to ARIO in support of the Minor Capital Program. An annual list of prioritized minor capital projects is established collaboratively between the ARIO secretariat, University of Guelph and Vineland Research Innovation Centre (VRIC). Once approved by ARIO, day to day site project management and implementation is provided by the University of Guelph and VRIC, with oversight by ARIO secretariat.
• Provide effective and efficient administration of current OMAFRA Open Research Program and other programs (for example, New Directions; Food Safety, Plant Germplasm Revenue Reinvestment).
• Provide effective and efficient administration of all financial operations/programs related to the agri-food research properties and research programs, including all aspects of financial reporting, consolidation with OMAFRA, and administration of related transfer payment agreements on behalf of OMAFRA.

Strategic direction

ARIO strategic focus

Together, the Director of Research for ARIO, the secretariat, the delegates and appointees of the Director of Research for ARIO and the members of ARIO appointed by the Minister are responsible for, and will continue to focus their efforts on four key aspects of the agricultural research system:

Provide leadership — implementation of ARIO's Infrastructure Strategy

In support of the ministry's mandate to support growth of the agri-food sector, the ARIO plays an important role in modernizing the agri-food and agri-products research and innovation system. For example, ARIO has recommended an approach to the Minister that OMAFRA is adopting to modernize the agri-food research and innovation system. OMAFRA continues to implement this strategy. The ARIO's Infrastructure Strategy initiative is the road-map for modernizing research infrastructure and strengthening innovation in Ontario by providing state of the art, modern research platforms necessary to support development of new value-added products and technological innovation and commercialization according to the following key criteria of the stakeholder-endorsed policy framework:

• Government, industry and academia partnerships.
• Financial operating efficiencies found, and savings reinvested into priority areas.
• Aligning infrastructure investments to specialized intellectual capacity including physical and virtual platforms.
• Greater utilization of infrastructure across both ARIO portfolio and non-ARIO infrastructure, for example, industry, government and academia achieve improved access and collaboration.

Provide strategic advice

In support of the ministry's mandate, a key role of the ARIO is to provide strategic advice to the Minister on agri-food research. With the appointment of a new Chair in January 2019, the ARIO will focus on strategic planning and reaffirming the role of ARIO.

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

ARIO and its members will look for ways to generate increased awareness of OMAFRA's agricultural, agri-food and agri-products research priorities and generate buy-in for the ARIO's Infrastructure Strategy through increased ARIO member engagement with agri-food 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.

Provide managerial oversight

ARIO provides operational and managerial oversight of the research infrastructure portfolio to ensure its effective and efficient management in support of the various research programs. ARIO also provides oversight and the effective administration of current OMAFRA Open Research programs and all related financial operations/programs including all aspects of financial consolidation of ARIO with OMAFRA with respect to these activities.

Resources needed to meet goals and objectives

Resources to meet ARIO's goals and objectives are provided through transfer payment funding from OMAFRA as well as through secretariat services provided by the Research and Innovation Branch of OMAFRA. ARIO also receives some revenues from leasing land and buildings within its property portfolio.

Funding for the necessary staffing and operating resources required to support the administration of ARIO has been, and will continue to be, provided through RIB budget allocations within OMAFRA. These costs are estimated at approximately $1.4 million annually. ARIO has no staff of its own and RIB with support from Business Planning and Financial Management Branch (BPFMB) and the Assistant Deputy Minister's Office provides all secretariat functions for ARIO. Current (2018-19) Research and Innovation Branch secretariat support to ARIO:

	Director ARIO 40%	Research unit ARIO 50%	ARIO members ARIO 100%	Finance, infrastructure & admin ARIO 80%	Innovation Unit ARIO 30%	Total ARIO
Salaries and benefits	$65,700	$376,000	$0	$588,900	$210,500	$1,241,100
Operating	$30,600	$1,700	$46,700	$2,600	$52,200	$133,800
Total	$96,300	$377,700	$46,700	$591,500	$262,700	$1,374,900

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 budget process.

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

Revenues from ARIO's research station portfolio (i.e. rent paid by tenants) are also used to partially offset the cost of ownership and maintenance of the research station portfolio.

The consolidation of ARIO with OMAFRA for the purposes of financial reporting and budgeting and the significantly increased focus on agency governance, transparency and accountability has greatly impacted the workload for the financial and operational reporting activities of the secretariat. As a result, the secretariat is examining ways to creating efficiencies in administration of ARIO activities.

Risk identification, assessment and mitigation strategies

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

As specified in the ARIO Act all ARIO business decisions are the responsibility of the Director of Research appointed under the Act. The ARIO Director of Research (Minister's appointment) is currently the Assistant Deputy Minister for OMAFRA's Research and Corporate Services Division. ARIO has no staff and all secretariat functions are provided by OMAFRA through the Research and Innovation Branch. Funding for programs and properties administered by ARIO is provided largely through OMAFRA and the government's multi-year planning budget process.

Implementation of the ARIO's Infrastructure Strategy will require significant funding over the next several years. OMAFRA is implementing the recommendations of the ARIO Infrastructure Strategy (for example, beef barn at Elora (2019) and new Guelph Turfgrass Institute at the University of Guelph (2020)). It is possible that budget constraints, economic and political conditions may create delays in completing ARIO's Infrastructure Strategy. However, given multi-year planning budget commitments and progress to date and strong alignment with current government priorities; the risk of significant delays or cancellation is medium. The OMAFRA staff providing secretariat services to ARIO secretariat continue to work with the ministry's Business Planning and Financial Management Branch, as well as central agencies, in submission of annual updates and refinements to the strategy captured in the Ministry's multi-year planning budget process.

Given the role and decision-making structure of ARIO, overall risk (operational, financial, political, etc.) is very low; however, the ability to maintain financial commitments for the multi-year nature of capital infrastructure construction projects can be impacted by changes in government priorities and changes in government funding, neither of which can be predicted with complete confidence over such a time frame. This risk is mitigated by the fact that the ARIO's Infrastructure Strategy is now well underway and that significant funds for future phases have been transferred to ARIO and have been committed to individual projects, and by the fact that the industry has accepted the idea that they need to be willing partners contributing a minimum of 20% to capital renewal projects.

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

Human resources and organizational governance

Membership

ARIO is comprised of up to 15 members appointed by the Minister for OMAFRA. Membership has been maintained at a level between seven and nine for many years. Members of ARIO are recognized as leaders in the agriculture, food and rural sectors. They have been appointed from a broad cross section of commodity groups, business interests and geographic areas. Members do not represent any particular organization but hold their position in their own right. ARIO continues to balance the need for diversity with the need for specific sector expertise that addresses knowledge gaps in ARIO's membership when putting forward the names of potential members for the Minister's consideration.

The ARIO Director of Research is appointed by the Minister under the ARIO Act and is responsible for the business and affairs of ARIO. The current ARIO Director of Research is the Assistant Deputy Minister, Research and Corporate Services Division and Chief Administrative Officer of OMAFRA. OMAFRA through the Research and Innovation Branch (RIB) provides secretariat services, i.e. administrative, operating and managerial support secretariat. The Comptroller is appointed by the Director of Research and is an OMAFRA employee within the Business Planning and Financial Management Branch (BPFMB). 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.

Staff numbers (staff strength)

ARIO does not hire or employ staff of its own. OMAFRA staff provides secretariat services to ARIO i.e. all administrative and managerial support in accordance with subsection 9(4) of the ARIO Act. This support is outlined in the MOU between ARIO and OMAFRA. Standard OPS disclosure policies and procedures are applicable to staff providing support to the secretariat ARIO.

ARIO members are appointed under the ARIO Act and are paid set daily per diems and travel costs to reimburse them for attendance at meetings held throughout the year. These per diems are set by an Order in Council.

The ARIO Act allows for the establishment of committees to support — implementation of ARIO's mandate. The current committees are:

• Executive Committee
  • Provides long term strategic leadership to the ARIO including coordination of any other ARIO committee activities and, strategic advice to OMAFRA.
• Infrastructure Committee
  • Committee membership currently includes members from ARIO and Secretariat staff. The committee reviews proposals related to the properties, addresses operational issues affecting the ARIO infrastructure portfolio, and makes recommendations that are then presented to ARIO as a whole for discussion and ratification. Recommendations are then made to the Director of Research for decision.
• Field Crops Sub-Committee
  • Membership consists of ARIO appointed members, OMAFRA staff providing secretariat services to ARIO, representatives from the field crops industry in Ontario and the University of Guelph.
  • This sub-committee of ARIO provides advice on the infrastructure, resources and priorities for field crops research, which includes a strategic review of field crops infrastructure needs (renewal of facilities and equipment) across the entire network of ARIO owned stations.
• Heritage Committee
  • The Heritage committee provides advice to the Director of Research on meeting ARIO's responsibilities under the Ontario Heritage Act.
  • Committee membership consists of OMAFRA staff providing secretariat services to ARIO, Infrastructure Ontario staff and others as required. A representative from Ministry of Tourism, Culture and Sport, Culture Division sits on the committee in an advisory role.

The appointed members of ARIO will be review the committee structure as part of the strategic planning process to ensure the committees align with the priorities and activities of the ARIO. The diagram bellow summarizes the governance structure of ARIO in its current form.

Third party initiatives

Over the past several years, global fiscal and economic realities facing all governments have resulted in a more focused effort and a significant shift towards collaborative research, funding partnerships, and new industry/government governance models. An example of this model was used to build the new beef facility at the Elora Research Station whereby the industry stakeholders/producer groups agreed to fund 20 per cent of capital construction costs and are taking a much more active role in research priority setting. This new model of increased industry involvement and financial commitment has been adopted for all other sectors (livestock and others) wishing to rebuild their aging provincially supported research infrastructure. It is also the basis on which the revitalization of research infrastructure for the other primary livestock groups is proceeding and has been accepted by all of the participating industry stakeholders.

The Ontario Ethanol Growth Fund (OEGF) was a provincial fund established to support development of capacity in the Ontario ethanol industry. In 2012, ARIO began receiving industry funding in 2012 as a condition of previous capital investments to industry by the province under the OEGF to be used to support OMAFRA's open research programs administered by ARIO. Payments are expected to continue until 2022.

With respect to research programs, ARIO enters into research funding agreements with research institutions. The structure of these agreements was developed and continues to be reviewed/modified by the Legal Services Branch of OMAFRA assigned to support ARIO.

Other transfer payment initiatives administered by ARIO on behalf of OMAFRA are developed in consultation with ARIO's assigned legal support and OMAFRA's BPFMB ensuring compliance with Transfer Payment and Accountability Directives.

Implementation plan for ongoing strategies

For 2019–20, the Director of Research, the members of ARIO, supported by the OMAFRA staff providing secretariat services to ARIO, will be responsible for the following key activities:

Provide leadership — Implementation of the ARIO's Infrastructure Strategy

• Continue implementation of the ARIO's Infrastructure Strategy leading to a modern, integrated agri-food and agri-products research and innovation system. Activities related to the ARIO's Infrastructure Strategy includes:
  1. Continue to advance the strategy by:
     1. Review and implementation of a site plan by developed by the University of Guelph on behalf of ARIO for the Elora Research Station to incorporate newly purchased lands into the station and identify sites on the station for new livestock facilities and turfgrass/agroforestry that will be transferred from the Guelph and Arkell research stations.
     2. Continuing the process to divest surplus lands and buildings no longer needed support OMAFRA/ARIO priorities. This includes disposal of the remaining land and buildings at Kemptville and Alfred, sale of the Guelph Turfgrass station and sales of parts of the New Liskeard Agricultural Research Station. ARIO will continue to work with MOI and IO to support disposal of these surplus properties.
     3. Working with the University of Guelph to relocate the Guelph Turfgrass Institute to the University of Guelph and Elora.
     4. Complete construction of new beef research facilities at Elora.
     5. Work with the other primary livestock producers to advance plans for relocation from Arkell to Elora.
     6. Construction of new field crop research services buildings at New Liskeard.
  2. Continue to work with stakeholders to implement the remaining centres (Bioeconomy, Field Crops and Food and Health), originally identified as part of ARIO's long-term Infrastructure Strategy.
  3. Continue to look for opportunities for achieving operational efficiencies to support a world class integrated network of research platforms/facilities.

Provide strategic advice

To provide strategic advice by continuing:

• The strategic planning exercise initiated in 2018/19 to review the current role of the ARIO and to explore options for an increased role in ministry research priority setting.
• To advise the Minister and OMAFRA senior management regarding the implementation and strategic positioning of the ARIO's Infrastructure Strategy including both new investments and opportunities to achieve operational efficiencies.
• To participate in and advance the Ontario Agri-Food Innovation Alliance, including by providing advice on ongoing research themes and priorities.
• Ongoing support to the Minister and OMAFRA on research priority setting by providing advice on new and existing research for the agri-food and agri-products sectors.
• To provide advice to the Minister and OMAFRA related to research needs that could be funded under the Canadian Agriculture Partnership.

Promote Ontario's agri-food and agri-products research and innovation

• Through focused outreach opportunities for the Chair and members, build relationships between ARIO and industry stakeholders to broaden awareness, engage and seek support for OMAFRA's research and innovation priorities and the research infrastructure renewal necessary to maintain and strengthen Ontario's local, national and global competitiveness in the agriculture and agri-food and agri-product sectors.

Provide managerial oversight

Provide managerial oversight by continuing:

• Operational and managerial oversight of the 17 agri-food research properties comprised of over 380 buildings, over 6,500 acres of land and over 30 tenants (both government and non-government) to ensure effective and efficient management of the research property portfolio in support of the various research programs.
• Effective and efficient administration and managerial oversight of current OMAFRA Open Research Programs (New Directions, Food Safety, Plant Germplasm Revenue Reinvestment, Proof of Principle)
• Effective and efficient administration and managerial oversight of ARIO's financial operations/programs including all aspects of financial consolidation of ARIO with OMAFRA.

Communications plan

The ARIO members will review and update the communications plan in the Fall of 2019.

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.

Key messages

• Scientific research in agri-food is critical for the pursuit of knowledge and leads to new discoveries that to help ensure Ontarians have access to healthy, safe food, and that our farmers and businesses have the information they need to be competitive and sustainable.
• Partnerships, such as the Ontario Agri-Food Innovation Alliance with the University of Guelph, is a key pillar 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

Potential Communications Opportunities in 2019–20*

*ARIO will be updated on new communication opportunities as they arise and are confirmed.

Tactic	Date
Minister briefings (to share progress and successes on implementing next steps of the ARIO's Infrastructure Strategy)	Ongoing
Annual reports and business plans to be posted on the OMAFRA website (containing updates on ARIO's Infrastructure Strategy and the operational and managerial oversight of the province's research properties)	Ongoing
ARIO meetings (to engage key stakeholders in supporting planning, evaluation and reviewing, updating and advising on agri-food and agri-products research priorities and issues)	Ongoing
Summaries of research priorities and programs on the OMAFRA website	Ongoing
Start of construction for the new Agronomy Research Building in New Liskeard	To be determined
Design and construction of the new Swine Research Centre in Elora	Summer 2019
Opening of the Elora Research Station Beef Facility	September, 2019

Financials

Overview of funding

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

Investments held in trust

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

See Appendix A for the Statement of Investment Policy for the Institute.

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 within the allocation assigned to the RIB. The current estimate cost to provide the secretariat functions to ARIO is approximately $1.4 million (which is part of Research and Innovation Branch budget).

Per diem rates and travel expenses for appointed ARIO members are set by Orders in Council and are paid to ARIO members for their attendance at scheduled meetings. These per diems follow Treasury Board Guidelines for Agencies, Board and Commissions and are paid out of RIB 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 29th annually). The annual report is prepared by OMAFRA staff and includes financial statements that are prepared and audited by an external auditor (public accountant) contracted by OMAFRA.

A forecasted Balance Sheet and Financial Statement showing projected revenues and expenses for 2018–19, 2019–20, 2020–21 and 2021–22 is included in Appendix B.

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 due to the "financial materiality" of ARIO resulting from the transfer of 17 agri-food research properties that had an approximate $60 million (sixty million dollars) book value in 2007 at the time of the transfer of the properties from the then Ontario Realty Corporation to ARIO. ARIO is required to provide a three-year financial outlook to OMAFRA for financial consolidation purposes.

Performance measures

Infrastructure planning and management

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

Outcomes	Performance measures	Targets
Increased third party investment/collaboration in R&D infrastructure	Level of funding from non-OMAFRA sources that goes toward investment in infrastructure. Performance target : Average 20% of capital investment to come from non-provincial government sources.	Targets: Develop industry-influenced governance and funding models for the up to five (5) new centres recommended under the ARIO's Infrastructure Strategy — Vineland (Hort), Elora (Livestock), Bioeconomy, Field Crops and Food for Health. Achievements: The primary livestock commodity groups (Beef Farmers of Ontario, Ontario Pork, Dairy Farmers of Ontario) have confirmed 20% support for the capital costs of redevelopment of Elora into the Elora Livestock Centre. This has established a new model of shared investment between industry and government that will be used for all future centres under the ARIO's Infrastructure Strategy. ARIO continues to work with the poultry industry to confirm support for renewal of the poultry research facility. The Beef Farmers of Ontario and Ontario Pork have committed to contributing 20% of the capital cost of the new facilities. The Beef Farmers have completed their contribution and Ontario Pork has made an initial payment to ARIO.
Accountability and efficiency in the operation of infrastructure	Infrastructure operation and maintenance measures that consider third party investment in operation and maintenance, efficiencies and offsets developed.	Targets: Absorb inflation and other new costs through the implementation of cost efficient planning and processes. Achievements: Identified and implemented operating efficiencies in current ARIO properties. These savings have offset inflation pressures as budgets have remained flatlined. Additional opportunities have been identified and are under consideration. Effective and cost efficient management of ARIO infrastructure/property portfolio achieved by the ARIO Secretariat and the University of Guelph (on behalf of ARIO).
Accountability and efficiency in the operation of infrastructure	Client service standards	Targets: All property maintenance issues resolved in a timely manner. Achievements: ARIO participates in periodic client service standards reviews as part of RIB and has received no complaints from tenants across the network of ARIO owned research station properties since taking over in 2007.

Appendix A — 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 1 to 3 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 portion of the portfolio available to adequately meet short-term (up to 1 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 ( i) and (ii) above.

Investment constraints

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

1. Federal Government Treasury Bills and Bonds.
2. Provincial Government Treasury Bills and Bonds.
3. Instruments offered by the five major chartered banks, namely, Royal Bank, TD Canada Trust, Bank of Montreal, Canadian Imperial Bank of Commerce and Bank of Nova Scotia including GICs, Term Deposits and Bankers Acceptances (note: investments can be greater than the $60,000 CDIC 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, 1-3 years. *Note: this goal is ambitious given that the ARIO portfolio(s) are constrained i.e. 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 a detailed monthly statement 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

The ARIO investment policy shall be reviewed as required.

Appendix B — proforma financial statements

2019–20 multi-year plan — forecast proforma balance sheet

Assets

Assets	Opening (April 1, 2018)	Transactions	End balance (March 31, 2019)	2019-20 plan	2020–21 outlook	2021–22 outlook	2022–23 outlook	2023–24 outlook
Cash	$6,662,999	$539,300	$7,202,299	$9,440,299	$9,757,299	$10,040,299	$10,323,299	$10,606,299
Temporary investments	$27,213,712	$10,000,000	$37,213,712	$32,823,712	$23,323,712	$23,323,712	$23,323,712	$23,323,712
Accounts receivable	$188,426	N/A	$188,426	$188,426	$188,426	$188,426	$188,426	$188,426
Accounts receivable — OMAFRA (re: TBARS)	$500,000	($500,000)	N/A	N/A	$0	$0	$0	$0
Note receivable — North Grenville (re: Kemptville sale)	$4,000,000	($4,000,000)	N/A	N/A	$0	$0	$0	$0
Subtotal — current assets	$38,565,137	$6,039,300	$44,604,437	$42,452,437	$33,269,437	$30,052,437	$36,835,437	$37,118,437
Tangible capital assets under construction	$8,432,364	$8,000,000	$16,432,364	$35,766,182	$35,600,000	$24,000,000	$6,000,000	$0
Tangible capital assets — net (see capital asset continuity)	$78,598,160	($2,500,000)	$76,098,160	$66,733,186	$82,353,559	$102,805,250	$117,681,941	$119,408,632
Subtotal — capital assets	$87,030,524	$5,500,000	$92,530,524	$102,499,368	$117,953,559	$126,805,250	$123,681,941	$119,408,632
Total assets	$125,595,661	$11,539,300	$137,134,961	$144,951,805	$151,222,996	$156,857,687	$160,517,378	$156,527,069

Liabilities

Liabilities	Opening (April 1, 2018)	Transactions	End Balance (March 31, 2019)	2019–20 plan	2020-21 outlook	2021-22 outlook	2022-23 outlook	2023-24 outlook
Accounts payable	$1,570,026	$0	$1,570,026	$1,570,026	$1,570,026	$1,570,026	$1,570,026	$1,570,026
Holdbacks	$528,076	$0	$528,076	$528,076	$528,076	$528,076	$528,076	$528,076
Unclaimed expenditures (research programs)	$3,267,330	$0	$3,267,330	$3,267,330	$3,267,330	$3,267,330	$3,267,330	$3,267,330
Deferred revenue	$562,552	$0	$562,552	$562,552	$562,552	$562,552	$562,552	$562,552
Subtotal current liabilities A	$5,927,984	$0	$5,927,984	$5,927,984	$5,927,984	$5,927,984	$5,927,984	$5,927,984
DDC — Elora Livestock Centre (provincial funding)	$61,794,811	$9,975,000	$71,769,811	$84,925,656	$90,479,847	$95,481,538	$100,058,229	$96,984,920
DDC — original infrastructure transfer	$16,826,781	($750,000)	$16,076,781	$5,374,780	$4,624,780	$3,874,780	$3,124,780	$2,374,780
DDC — research cluster centres (provincial funding)	$0	$0	$0	$0	$0	$0	$0	$0
Total DCC — provincial	$78,621,592	$9,225,000	$87,846,592	$90,300,436	$95,104,627	$99,356,318	$103,183,009	$99,359,700
DCC — Elora Livestock Centre (non-provincial funding)	$10,047,548	$1,775,000	$11,822,548	$14,947,548	$16,097,548	$17,197,548	$16,747,548	$16,297,548
Subtotal deferred capital contributions B	$88,669,140	$11,000,000	$99,669,140	$105,247,984	$111,202,175	$116,553,866	$119,930,557	$115,657,248
Total liabilities A + B	$94,597,124	$11,000,000	$105,597,124	$111,175,968	$117,130,159	$122,481,850	$125,858,541	$121,585,232

Equity

Equity	Opening (April 1, 2018)	Transactions	End Balance (March 31, 2019)	2019–20 plan	2020–21 outlook	2021–22 outlook	2022–23 outlook	2023–24 outlook
Fund balances	$18,367,711	$539,300	$18,907,011	$21,145,011	$21,462,011	$21,745,011	$22,028,011	$22,311,011
Accumulated remeasurement losses	($51,348)	N/A	($51,348)	($51,348)	($51,348)	($51,348)	($51,348)	($51,348)
Contributed equity (note 1d)	$12,682,174	N/A	$12,682,174	$12,682,174	$12,682,174	$12,682,174	$12,682,174	$12,682,174
Total liabilities and equity	$125,595,661	$11,539,300	$137,134,961	$144,951,805	$151,222,996	$156,857,687	$160,517,378	$156,527,069

Income statement — statement of revenue and expenses (for the year)

Revenue — research

Revenue	2017–18 audited actuals	2018–19 interim	2019–20 plan	2020–21 outlook	2021–22 outlook	2022–23 outlook	2023–24 outlook
Grants — provincial	$500,000	$1,850,000	$1,850,000	$1,850,000	$1,850,000	$1,850,000	$1,850,000
Grants — federal	$0	$0	$0	$0	$0	$0	$0
Grants — other	$378,000	$378,000	$378,000	$378,000	$378,000	$98,000	$0
Intellectual property	$1,539,667	$725,000	$725,000	$725,000	$725,000	$725,000	$725,000
Total	$2,417,667	$2,953,000	$2,953,000	$2,953,000	$2,953,000	$2,673,000	$2,575,000

Revenue — property

Revenue	2017–18 audited actuals	2018–19 interim	2019–20 plan	2020–21 outlook	2021–22 outlook	2022–23 outlook	2023–24 outlook
Grants — Provincial (minor capital)	$4,500,000	$4,500,000	$4,500,000	$4,500,000	$4,500,000	$4,500,000	$4,500,000
Grants — Provincial (food innovation)	$800,000	$0	$0	$0	$0	$0	$0
Rental income — provincial	$948,489	$597,000	$365,000	$365,000	$365,000	$365,000	$365,000
Rental income — private industry	$1,570,505	$1,347,000	$170,000	$170,000	$170,000	$170,000	$170,000
Deferred capital impairment	$765,910	$0	$0	$0	$0	$0	$0
Deferred capital contributions on sale of TCA	$3,437,392	$0	$0	$0	$0	$0	$0
Transfer payments — payments in lieu of taxes	$750,000	$750,000	$750,000	$750,000	$750,000	$750,000	$750,000
Payments in lieu of taxes — IO	$69,430	$48,300	$33,000	$33,000	$33,000	$33,000	$33,000
Payments in lieu of taxes - UG, Vineland & Vinnova	$120,000	$120,000	$120,000	$120,000	$120,000	$120,000	$120,000
Amortization of DCC — provincial	$2,421,531	$2,275,000	$2,304,155	$2,695,809	$3,248,309	$3,673,309	$3,823,309
Amortization of DCC — non-provincial	$224,593	$225,000	$275,000	$350,000	$400,000	$450,000	$450,000
Total	$15,607,850	$9,862,300	$8,517,155	$8,983,809	$9,586,309	$10,061,309	$10,211,309

Revenue — other

Revenue	2017–18 audited actuals	2018–19 interim	2019–20 plan	2020–21 outlook	2021–22 outlook	2022–23 outlook	2023–24 outlook
Gain on disposal of TCA	$4,197,692	$0	$2,778,000	$0	$0	$0	$0
Investment income	$465,843	$450,000	$400,000	$225,000	$225,000	$225,000	$225,000
Total	$4,663,535	$450,000	$3,178,000	$225,000	$225,000	$225,000	$225,000
Total revenues A	$22,689,052	$13,265,300	$14,648,155	$12,161,809	$12,764,309	$12,959,309	$13,011,309

Expenditures — research

Expenditures	2017–18 audited actuals	2018–19 interim	2019–20 plan	2020–21 outlook	2021–22 outlook	2022–23 outlook	2023–24 outlook
Research project/program	$1,430,079	$3,300,000	$3,400,000	$2,228,000	$2,228,000	$1,948,000	$1,850,000
Intellectual property	$1,005,668	$455,000	$455,000	$455,000	$455,000	$455,000	$455,000
Total	$2,435,747	$3,755,000	$3,855,000	$2,683,000	$2,683,000	$2,403,000	$2,305,000

Expenditures — property

Expenditures	2017–18 audited actuals	2018–19 interim	2019–20 plan	2020–21 outlook	2021–22 outlook	2022–23 outlook	2023–24 outlook
Payments in lieu of taxes	$1,032,852	$1,151,000	$1,106,000	$1,216,000	$1,250,000	$1,250,000	$1,250,000
Minor capital	$4,226,092	$4,500,000	$4,500,000	$4,500,000	$4,500,000	$4,500,000	$4,500,000
Transfer payments — University of Guelph (Guelph Turfgrass)	$5,000,000	$0	$0	$0	$0	$0	$0
Transfer payments — University of Guelph (food innovation)	$800,000	$0	$0	$0	$0	$0	$0
Provision for forgivable loan	$3,700,000	$0	$0	$0	$0	$0	$0
Operations and maintenance	$1,198,997	$820,000	$370,000	$400,000	$400,000	$400,000	$400,000
Impairment of TCA	$765,910	$0	$0	$0	$0	$0	$0
Amortization of capital assets	$2,646,124	$2,500,000	$2,579,155	$3,045,809	$3,648,309	$4,123,309	$4,273,309
Total	$19,369,975	$8,971,000	$8,555,155	$9,161,809	$9,798,309	$10,273,309	$10,423,309
Total expenditures B	$21,805,722	$12,726,000	$12,410,155	$11,844,809	$12,481,309	$12,676,309	$12,728,309
Net surplus (deficit) (A - B)	$883,330	$539,300	$2,238,000	$317,000	$283,000	$283,000	$283,000

Capital assets — land

Capital assets	2018–19 assets opening balance	2019–20 forecast balance	2020–21 forecast balance	2021–22 forecast balance	2022–23 forecast balance
Original ARIO property	$9,793	$9,793	$9,793	$9,793	$9,793
Regional campuses	$1,736,994	$704,994	$704,994	$704,994	$704,994
Research stations	$24,642,184	$19,562,184	$19,562,184	$19,562,184	$19,562,184
Total land	$26,388,971	$20,276,971	$20,276,971	$20,276,971	$20,276,971

Capital assets — buildings

Capital assets	2018–19 assets opening balance	2019–20 forecast balance	2020–21 forecast balance	2021–22 forecast balance	2022–23 forecast balance
Regional campuses	$25,118,835	$21,718,835	$21,718,835	$21,718,835	$21,718,835
Research stations	$45,373,538	$44,749,720	$63,415,902	$87,515,902	$106,515,902
Total buildings	$70,492,373	$66,468,555	$85,134,737	$109,234,737	$128,234,737
Total	$96,881,344	$86,745,526	$105,411,708	$129,511,708	$148,511,708

Appendix C — ARIO risk management plan summary

The Risk Prioritization is a cumulative index combining individual scores for Likelihood, Strategic Impact, Reputational Impact, Financial Impact, Speed of Onset and Risk Tolerance. Higher scores reflect increased risk. The maximum score is 28. Risk prioritization rating are defined as Low <=14; Med 15–18 and High 19–28.

Risk category	Risk statement	Existing risk mitigation activities	Risk prioritization score	Risk prioritization rating	Risk prioritization rationale	Risk management plan
1. Strategic	Strategic direction/objectives/ mandate not clearly understood by external stakeholders and some internal ministry staff.	Communications plans for major initiatives (for example, Infrastructure Strategy) have been developed and/or refined for all relevant stakeholders. Discussions between external stakeholders and ARIO members continue to take place as needed.	8	Low	The ARIO Infrastructure Strategy has raised the profile and awareness and understanding of ARIO.	Risk Option Chosen: Accept Rationale for choosing option: risk is low and is mitigated on an ongoing basis.
2. Strategic	Inadequate funding for programs and capital infrastructure.	ARIO provides advice to the ministry on program resource requirements and allocation. Decisions on allocations are the responsibility of ministry. Program: Continue to identify allocation needs through the annual multi-year budget planning process, leverage additional funds from other levels of government, industry partners, and academia. Constraints have resulted in some reprofiling to out years. Infrastructure: Continue to identify capital allocation needs through the annual multi-year budget planning process, leverage additional funds from other levels of government, industry partners and academia.	17	Med	Key component of long-term research program effectiveness.	Risk Option Chosen: Accept Rationale for choosing option: No choice but to continue to inform and advocate to senior management and central agencies through annual PRRT budgeting process.
3. Strategic	Inability to generate stakeholder support for the strategy to revitalize the agri-food research infrastructure system	Have now established industry support for infrastructure strategy and funding model. Continued identification of needs and progress through the annual multi-year budget planning process. Turfgrass, swine and beef sectors have committed to funding new facilities.	14	Low	Have established financial contribution parameters that have been accepted by industry groups.	Risk Option Chosen: Accept Rationale for choosing option:Industry has helped to establish a precedent by committing to contributing 20% of the cost of the recently completed new Elora dairy research facility. Industry contribution will be one of the determinants in future decisions on which projects get approval.
4. Accountability/ Governance	Perceived conflict of interest re: governance structure with respect to the current dual role of Director of Research/CAO and dual role of staff secretariat.	The Director of Research of ARIO is appointed under the ARIO Act to administer the business and affairs of the Institute. The Director of Research is the ADM of the ministry's Research and Corporate Services Division. Continued training and orientation of ARIO members. Ensure ministry staff and ARIO members are familiar with ARIO-OMAFRA Memorandum of Understanding (MOU) which details all roles and responsibilities as defined in the ARIO Act.	14	Low	Role of ARIO has been established for a very long time.	Risk Option Chosen: Accept Rationale for choosing option: Completion of mandate review indicated status quo is the best option.
5a. Accountability/ Governance	Central agencies understanding of ARIO agency's role and structure.	Continued discussions with central agency staff to communicate role of ministry staff, ARIO role and governance structures and relationship to ministry. Central Agencies were active participants in the mandate review.	14	Low	Continue to work with and educate central agency staff.	Risk Option Chosen: Accept Rationale for choosing option: Mitigation is continual and ongoing.
5b. Accountability/ Governance	Impact of government transition and agency review.	Continued discussions with the Minister's office and Premier's Office to communicate ARIO role, importance of the Infrastructure Strategy, and the impact and value of research to agri-food and rural sectors and provincial economy.	18	Med	Implementation of the Infrastructure Strategy is essential to providing the platform for research necessary to support the sector and its competitiveness in the future. The Infrastructure Strategy has widespread support in the agriculture industry with commodity organizations having committed funding to the next phases of construction. Delays in implementation could jeopardize this funding and delays in construction could lead to increased cost. Significant delays could result in the cost exceeding the fixed budget for the project.	Risk Option Chosen: Accept Rationale for choosing option: No option.
6. Accountability/ Governance	Inability to maintain sufficient and qualified number of members, as well as timely appointments to fill vacancies in membership	Quorum for meetings is defined by the ARIO Act as 50% of the appointed members. The ARIO Act allows members to continue to serve past the end of their term until they are replaced. Appointments are at the sole discretion of the Minister. Ensure appropriate advertising of open positions through the PAS system	8	Low	Some difficulty in addressing priorities due to gaps in membership expertise. Delays experienced in approvals.	Risk Option Chosen: Mitigate Rationale for choosing option: Continued focused effort to identify good candidates that fill gaps in the breadth of membership and experience.
7. Accountability/ Governance	Member roles and responsibilities not clearly understood by the members.	Ensure all current and new members are provided with orientation materials and appropriate training is provided. Ensure program staff and members are familiar with MOU which details all roles and responsibilities as defined in the ARIO Act.	10	Low	See score	Risk Option Chosen: Accept Rationale for choosing option: New member training and role of ARIO often discussed at meetings.
8. Accountability/ Governance	Inherent government liability in ARIO agreements (for example, leases, research funding etc.) allowing exposure to legal actions.	Legal review of all agreements before they are finalized to ensure liabilities are minimized where possible. Standardization of agreements where possible.	8	Low	Ongoing work with Legal Service Branch on all agreements - research and tenant.	Risk Option Chosen: Accept Rationale for choosing option: Mitigation is continual and ongoing through extensive reliance on Legal Services Branch and Business Planning and Financial Management Branch on any and all agreements etc.
9. Operational	Inability to effectively and efficiently operate and manage the infrastructure portfolio. All of the ARIO owned properties are operated and managed under agreements with third parties. The University of Guelph operates and manages all of the properties except the Vineland research station which is operated and managed by the Vineland Research and Innovation Corporation.	The risk is low given the University of Guelph's experience in managing the same properties for many years. The agreement between ARIO, the university and the ministry, and the management agreement between ARIO and VRIC, details all roles and responsibilities of each party for operation, management and maintenance of the properties. The university and VRIC submit an annual prioritized minor capital plans that detail needed property maintenance and repairs. Decisions on funding are the responsibility of ARIO. There is a very good working relationship between ARIO, the University of Guelph, VRIC and the ministry. Notice requirements in the licence agreement and management agreement provide ARIO adequate time to contract a replacement property manager if required.	10	Low	Ongoing work with service providers (University of Guelph and VRIC). Issues identified and dealt with as they arise. Excellent working relationship with the university, who have extensive experience and continue to provide excellent professional site operations and management.	Risk Option Chosen: Accept Rationale for choosing option: Issues are identified and managed on an ongoing daily basis. There is now almost 10 years of experience managing the portfolio with no significant issues to date. Relationship with service providers well established and very strong (University of Guelph and VRIC).
10. Operational	Inadequate business continuity plans.	OMAFRA staff providing secretariat services to ARIO secretariat (Research and Innovation Branch) is governed by OMAFRA emergency and business continuity planning which is considered adequate for ARIO purposes.	6	Low	All services are provided to ARIO by ministry staff in RIB. RIB/ministry contingency plans are adequate.	Risk Option Chosen: Accept Rationale for choosing option: All facilities have individual emergency management procedures/plans.
11. Operational	Tenant or delivery agent activities which result in changes in Payments in Lieu (PIL)/Tax and assessment.	Tenants and delivery agents are carefully screened to ensure that they are compatible with ARIO's mandate and direction. Any sublet agreement requires Director of Research approval. All new leases/licences/ operating agreements contain a clause that states that if assessments/PILs increase as a result of the tenant/occupant's activities they are liable for the increase. Approval of new buildings to consider operating budget impacts including PILs. In the case of a tenant owned building on ARIO property a land use agreement will be completed to spell out responsibilities and cost allocation. Some adjustments to PILs based on tenant activity have already been made.	11	Low	Overall financial implications are minor.	Risk Option Chosen: Accept Rationale for choosing option: Overall risk /impact is low. Tenant agreements make tenant financially responsible.
12. Information Technology and Infrastructure	Potential damage or destruction of property.	ARIO has owned the research properties since 2007. There are no significant property losses or destruction on record during ARIO's ownership or during the Government of Ontario's ownership of these properties. Leases and occupancy agreements require occupants (including the University of Guelph) to carry adequate insurance. Occupants are required to include ARIO and the government as additional insureds on their policies. ARIO as an agency of the government is included in the government of Ontario's self insurance scheme. ARIO maintains a reserve for any potential issues. Lease revenue and ARIO's minor capital funding are available to assist with repair of major and uninsured damage when it occurs. If ARIO's existing resources are insufficient a request for funding for repair of damage would be made to the Ministry.	13	Low	See mitigation activities. ARIO as a government agency is included in the government's self insurance scheme per government policy.	Risk Option Chosen: Accept Rationale for choosing option: Property risks (theft, fire vandalism) are well managed. Each site has individualized emergency management procedures/plans. Service providers (University of Guelph and VRIC) very responsive to any items that come up.
13. Information Technology and Infrastructure	Lack of process documentation and/or knowledge transfer (including cross training).	Implement plans to ensure cross-training of staff occurs when needed. Annual review of branch plans will pinpoint any required improvements in documentation for ARIO purposes. Implement succession planning strategies for ARIO secretariat staff due to impending retirements.	11	Low	Continuously working with service providers and with developing understanding with staff in RIB.	Risk Option Chosen: Accept Rationale for choosing option: RIB provides secretariat services to ARIO. RIB/ministry succession and contingency plans are considered adequate.
14. Other	Potential financial losses incurred on investments.	Funds are invested with a "conservative" strategy as required by the Financial Administration Act to safeguard form capital losses of public funds. Investment management firm (RBC as of April 2015) fees are based on the value of investments, so the firm has incentive to maximize value and returns and avoid losses.	11	Low		Risk Option Chosen: Mitigate Rationale for choosing option: ARIO's investment plan is very conservative and focused on capital preservation, liquidity and return (in that order).Investments are managed by a contracted management firm with oversight from RIB staff.