Agricultural Research Institute of Ontario Business Plan 2015-18
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The agri-food and agri-products industry contributes more than $33 billion to the Ontario economy and employs approximately 700,000 people. Research and innovation are key contributors to the strength of Ontario's agri-food industry. Ontario is a top innovator in agri-food, developing value-added products and providing industry solutions that contribute to a competitive and sustainable agri-food sector.
The Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) is the provincial lead overseeing Ontario's thriving agri-food industry. The ministry works to advance the government's efforts to promote a more competitive and productive agri-food and agri-products sector, and economic growth and opportunities for rural Ontario. The ministry supports rural and urban communities and a high quality of life for all Ontarins. Keys to achieving success include strong rural communities, thriving agriculture and food sectors, and, safe food, healthy animals and a healthy environment.
The Agricultural Research Institute of Ontario (ARIO) is 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:
In addition to "increasing consumption of local food " and "open for business ", the OMAFRA's current strategic priority that most directly aligns with the ongoing work of ARIO is "increasing the competitiveness and productivity of Ontario's agri-food and agri-product businesses through market focused innovation". For more information on ARIO's on-going work see the attached appendices.
Key ARIO accomplishments for the 2014/15 fiscal year include:
Vineland Research and Innovation Centre (VRIC):
Minor Capital program
While continuing the work of managing the research infrastructure
portfolio and the administration of the ministry's open research
programs, ARIO recognizes the importance of continuing with implementation
of its research Infrastructure Strategy and looks forward to the
next phases of development and implementation of the research Infrastructure
Strategy in the year ahead.
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 (OMAFRA).
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, competitive research funds and other trust funds) and to acquire, maintain and dispose of real property in the manner described in the ARIO Act.
ARIO's strategic priorities in supporting the ministries 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 Infrastructure Strategy 3) Promoting Ontario Agri- food and Agri- Products Research & Innovation 4) Managerial Oversight - of the ARIO owned Research Infrastructure.
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:
Partnering to build a sustainable and thriving agri-food research and innovation system
Governments around the world, including here in Ontario, are faced with a sharply increased focus on public governance, transparency and accountability and value for money when delivering services and programs to citizens and businesses. New partnership models joining industry with governments and academia are key to the long-term success of the agri-food and agri-products industry, and are necessary for sustained economic prosperity and growth.
The ARIO Infrastructure Strategy is based on principles that include:
This increase in industry involvement and commitment can also be
seen under Growing Forward 2 (GF2) federal provincial programs (2013-2018),
which has resulted in an overall increase in innovation funding
and a requirement to embed innovation throughout GF2 programs. Industry-led
research and innovation, along with industry, academic, business
and government collaborations are becoming increasingly important
to advancing innovation and commercialization, and this is reflected
in GF2 programming.
Partnership models and infrastructure review of leading jurisdictions re agri-food for research and innovation
A world-wide scan of how other jurisdictions organize and manage agricultural and agri-food research and development infrastructure was completed by KPMG on behalf of ARIO(1) . This scan concluded that jurisdictions around the world who lead in agricultural research and innovation have these success factors for agri-food and agri-products research and innovation strategic business planning and infrastructure capacity:
Building on foundation of specialized focused capacity to modernize partnerships and infrastructure
The long-term funding agreement and relationship between OMAFRA and the UofG (the Partnership Agreement) is the primary vehicle for delivering the Ministry's agri-food and agri-products innovation agenda and the supporting research Infrastructure Strategy put forward by ARIO. The Agreement provides the research and innovation capacity to help attract and retain investment by government and industry for both discovery and applied scientific research. The UofG as the primary user of the ARIO properties has an active role in the new agri-food and agri-products research and innovation centres emerging under the Infrastructure Strategy and supported through GF2.
Modern partnerships to drive innovation and operating efficiencies
Implementation of the Infrastructure Strategy has been a catalyst for new, industry-influenced governance models that support the strong research and innovation capacity and boost Ontario's economy. The VRIC at Vineland and more recently, the Livestock Research and Innovation Centre (LRIC) at Elora have demonstrated industry's increased commitment to supporting the agri-food innovation system in partnership with governments and the research community. These two centres along with centres in the areas of Bioeconomy, Food for Health, and Field Crop Production will continue to drive the modernization of agri-food research infrastructure and the relationships between innovation partners - governments, industry and the research community.
In conclusion, to continue enabling Ontario's economic growth, Ontario needs to focus its agri-food and agri-products research and innovation, on the development of innovative products, safe food and sustainable and efficient production. To do so effectively, Ontario's agri-food and agri-products sectors must have the appropriate research and innovation infrastructure platforms, with oversight by governance models that reflect increased industry investment, access, and involvement in partnerships between government, industry and academia.
(1) KPMG. Development of a Comprehensive Agri-Food R & D Infrastructure
Strategy for the Agricultural Research Institute of Ontario: Background
Research Paper. March 7, 2008.
The Director of Research for ARIO, the delegates and appointees of the Director of Research for ARIO (under the ARIO Act), the Secretariat and the members of ARIO appointed by the Minister have been, and continue to be, responsible for these key programs and activities:
1. Strategic Advice
2. Leadership - Implementation of the Infrastructure Strategy
3. Promoting Ontario's Agri-food and Agri-Products Research and Innovation
4. Managerial Oversight
ARIO Strategic Focus
Together, the Director of Research for ARIO, the delegates and appointees of the Director of Research for ARIO, (including the Secretariat) 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:
1. Leadership - Implementation of ARIO's Infrastructure Strategy
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 has begun implementing some of the various phases of this strategy. The 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:
For more information visit the ARIO website at www.omafra.gov.on.ca/english/research/ario/institute.htm
2. Strategic Advice
A key role of ARIO is to provide strategic advice to the Minister on agri-food and rural research. The current focus is on the Infrastructure Strategy, the renewed Partnership including ongoing research themes and priorities, and the emerging governance models under the Infrastructure Strategy (e.g. LRIC) and on the strategic direction of agri-food research in the province.
3. Promoting Ontario's Agri-food Research and Infrastructure Strategy
ARIO and its members undertake focused activities to generate increased awareness of OMAFRA's agricultural, agri-food and agri-products priorities and generate buy-in for the Infrastructure Strategy through increased ARIO member engagement with agri-food industry stakeholders.
4. Managerial Oversight
ARIO provides operational and managerial oversight of the infrastructure
portfolio to ensure effective and efficient management of the research
property portfolio in support of the various research programs.
ARIO also provides oversight and the effective administration of
current OMAFRA Open Research programs and all financial operations/programs
including all aspects of financial consolidation of ARIO with OMAFRA.
Resources to meet ARIO's goals and objectives are being provided through transfer payment funding from OMAFRA as well as through secretariat services provided by the Research and Innovation Branch (RIB) of OMAFRA. ARIO also received some revenues from leasing land and buildings within its property portfolio. Funding for major capital projects (implementation of ARIO's research Infrastructure Strategy) is requested and approved annually as a key component of OMAFRA's PRRT: Program Review, Renewal and Transformation process.
Funding for the necessary staffing and operating resources required to support the administration of ARIO have been, and will continue to be, provided through RIB budget allocations within OMAFRA. The cost to administer ARIO has grown over the last few fiscal years, in light of the significantly increased responsibilities resulting from the property transfer. These costs are estimated at approximately $1.4 million annually, including all operating costs and a portion of ministry (RIB) staff salaries and benefits (*see table below). ARIO has no staff of its own and RIB provides all Secretariat functions for ARIO. The actual cost of ARIO member per diems and travel related costs is relatively insignificant and is approximately $50k/yr of the $1.4 million total.
The decision to consolidate ARIO with OMAFRA for the purposes of financial reporting and budgeting and the very significantly increased focus on agency governance, transparency and accountability have greatly impacted financial and operational reporting activities of the Secretariat resulting in a need for additional resources.
Revenues from ARIO's property portfolio (tenants) are used to partially offset the cost of ownership and maintenance of the portfolio.
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 to develop the dairy research facility at Elora, whereby, industry will provide 20% (twenty percent) of the capital costs of any construction/redevelopment projects.
Research and Innovation Branch secretariat support to ARIO:
ARIO is a Board-Governed provincial agency of the government 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.
All ARIO business decisions are the sole responsibility of the Director of Research for ARIO. The ARIO Director of Research is currently an OMAFRA Assistant Deputy Minister (Minister's appointment). ARIO has no staff and all Secretariat functions are provided by the ministry through the RIB. Funding for programs and properties administered by ARIO is provided largely through the ministry and the government's budget process.
Implementation of ARIO's Infrastructure Strategy requires significant funding over the next several years. OMAFRA has begun implementing the recommendations of the ARIO Infrastructure Strategy (e.g. new dairy facility at Elora and a new research greenhouse at Vineland); however it is always possible that budget constraints, economic and political realities might cause delays in completing the Infrastructure Strategy recommended. Given that the Infrastructure Strategy supports current priorities of the government and its focus on increasing competitiveness and productivity of the agri-food and agri-products sector, the risk of significant delays or cancellation is low. The ARIO Secretariat continues to work with the ministry's finance department (Business Planning and Financial Management Branch - BPFMB) and central agencies in submission of annual updates and refinements to the strategy captured in there process.
Given the role and decision making structure of ARIO, overall risk (operational, financial, political etc) is relatively low although maintaining financial commitment for the multi year nature of capital infrastructure construction projects is always a political risk. A detailed Agency Risk Management Plan was updated in April 2015 and the summary is included as Appendix D.
ARIO is comprised of up to 15 members appointed by the Minister for OMAFRA and has been maintained at a level between 7 and 9 for many years. Members of ARIO are recognized as leaders in the agriculture, food and rural sectors. They have been drawn from a broad cross section of commodity and business interests and geographic areas. Members do not represent any particular organization but hold positions in their own right.
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 (RIB) provides administrative, operating and managerial support and acts as the ARIO Secretariat. Operational decision-making and approvals are made by the ARIO Director of Research, or his/her authorized delegate(s). The duties 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)
As mentioned earlier, ARIO does not itself hire or employ staff. OMAFRA staff act as the Secretariat to ARIO by providing 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.
In addition to the Secretariat there is an ARIO Board. ARIO Board
members are appointed under the ARIO Act and are paid set daily
per diems and travel costs to reimburse members for attendance at
meetings held throughout the year. These per diems are set by an
Order in Council.
The following diagram summarizes the organizational structure of ARIO in its current form.
In the past several years, global fiscal and economic realities facing all governments and the need to do more with less has resulted in a more focused effort and a significant shift towards collaborative research, funding partnerships, and new industry/government governance models. For example, the model being used to build the new dairy facility at Elora whereby the industry stakeholders/producer groups have agreed to fund 20 per cent of capital construction costs, and are taking a much more active role in priority setting and overall governance through the Livestock Research Innovation Corporation, a recently established industry led not for profit. This new model of increased industry involvement and financial commitment is the model for all other sectors (livestock and others) wishing to rebuild their aging provincially supported research infrastructure and is the basis on which the revitalization of research infrastructure for the other primary livestock groups (e.g. swine, poultry, beef) is proceeding.
Currently ARIO receives industry funding ($376k/yr) as a condition of previous capital investments to industry by the province under the Ontario Ethanol Growth Fund (OEGF) to be used to support the ministry's open research programs administered by ARIO.
In addition, ARIO is collaborating with OMAFRA, Agriculture and Agri-Food Canada (AAFC) and other innovation partners to leverage opportunities under GF2, a Federal, Provincial and Territorial agricultural policy framework. GF2 in Ontario was announced jointly by Canada and OMAFRA on April 2, 2013 with a focus on innovation, competitiveness and market development.
RIB provides all secretariats, administrative and managerial support functions for ARIO. With respect to research programs, ARIO and the research institution enter into a Research Funding Agreement that was developed and is reviewed/modified with the Ministry of the Attorney General, Legal Branch assigned to support ARIO.
Other transfer payment initiatives administered by ARIO on behalf
of the ministry are developed in consultation with ARIO's assigned
legal support and the ministry's BPFMB ensuring compliance with
Transfer Payment and Accountability Directives.
For 2015-16, the Director of Research, the members of ARIO and the Secretariat will be responsible for the following key activities:
1. Leadership - Implementation of Infrastructure Strategy
2. Strategic Advice
3. Promoting Ontario's Agri-food and Agri-Products Research and Innovation
4. Managerial Oversight
In alignment with both the government's plan to build Ontario up through investments in the economy, people and infrastructure and the Ministry's strategic direction for research and innovation, ARIO effectively promotes Ontario's agri-food and agri-product research and innovation system through the following communication objectives:
Key Audiences / Stakeholders
Tools & Tactics
*Potential Communications Opportunities in 2015-16
* ARIO will be updated on new communication opportunities as they arise and are confirmed.
Overview of Funding
Under the ARIO Act, the Institute may accept gifts, grants, donations or bequest money for use in research and the Director of Research holds and administers these funds received "in trust".
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 generally 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. This investment plan guarantees that funds are managed on a very conservative basis in accordance with the Financial Administration Act and the Trustee Act.
See Appendix B for the Statement of Investment Policy for the Institute.
The cost to administer the programs within ARIO (including the proportionate cost of salaries and benefits for OMAFRA staff that spend varying portions of their time on ARIO issues) are paid from OMAFRA's budget within the allocation assigned to the RIB. The current estimate cost to provide the ARIO Secretariat functions is approximately $1.4 million (part of RIB budget).
Per diem rates and travel expenses 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 2015-16, 2016-17 and 2017-18 is included in Appendix C.
ARIO is consolidated for financial reporting purposes with OMAFRA
due to its close relationship, the ARIO's reliance on OMAFRA for
research program funding and administrative support, and due to
the "financial materiality" of ARIO resulting from the
transfer of 17 agri-food research properties that had an approximate
$60 million book value at the time of the transfer in 2007. ARIO
is required to provide a three-year financial outlook to OMAFRA
for financial consolidation purposes.
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 Infrastructure Strategy.
ARIO presented the following recommendations to the former Minister of Agriculture, Food and Rural Affairs "Defining an Infrastructure Strategy for Agri-Food and Rural Research, Discovery, Adaptation and Commercialization in Ontario" in 2008.
ARIO endorses a new infrastructure vision, mission and principles to guide the implementation and communication of the Infrastructure Strategy
Vision: Ontario has an internationally recognized, world-leading, integrated infrastructure system that is cohesively coordinated to support agri-food and rural research, discovery, adaptation and commercialization.
Mission: ARIO's mission is to facilitate leadership and investment in research infrastructure that is fundamental to the enhancement of Ontario's rural and agri-food value chain.
Guiding Principles: ARIO's leadership in agri-food and rural research
infrastructure investment will be guided by the following principles:
ARIO will begin a process of developing a network of up to five
regionally-led sector-oriented centres (Regional Agri-Food Research
and Discovery Centres)
Requiring strong, committed, visionary leaders and teams for driving
these ideas forward (champions)
Working with champions, develop a purpose and focus for each centre
Establish logical groups and relationships to create appropriate
Establish parameters by which OMAFRA and ARIO shepherd and support
Actively pursue involvement of federal government, other institutions and the private sector to ensure that existing provincial, federal and regional infrastructure and capabilities are considered together and to encourage collaborative approaches to common issues. This is to occur throughout the process.
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.
The portfolio shall be managed to meet the following objectives
(in priority order listed):
Consistent with both the Trustee Act and the Financial Administration
Act, the following securities are examples of eligible investments
for the ARIO portfolio:
The Portfolio should be diversified, within constraints of ARIO investment policy, to reduce risk to capital.
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.
ARIO shall engage the services of a professional investment firm for investment advice through a competitive process.
The ARIO Comptroller (currently Manager, Corporate Controllership in the Ministry) shall have responsibility to ensure the Statement of Investment Policy is adhered to.
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
The ARIO investment policy shall be reviewed as required.
Agricultural Research Institute of Ontario (ARIO) - 2015-16 RbP - Forecast Proforma Statement of Financial Position
Of the $10.51M provided by the government, $10M to be used to purchase
land, added to capital assets and contributed equity
Agricultural Research Institute of Ontario (ARIO) - 2015-16 RbP - Forecast - Details regarding Capital Investment and Amortization (Buildings Only)
Agricultural Research Institute of Ontario 2015-16 RbP Forecast for the Year Ended March 31
Agricultural Research Institute of Ontario (ARIO) for the Year Ended March 31 - Notes to the Proforma Financial Statements
1. Capital Assets 2014-15
Agricultural Research Institute of Ontario (ARIO) for the Year
Ended March 31 - Notes to the Proforma Financial Statements
|Original ARIO Property||9,793||9,793||9,793|
|Livestock / Energy / Environmental (Elora) - Prov||36,155,506||36,155,506||36,155,506|
|Less: Accumulated Amortization||-21,150,487||-24,448,533||-27,746,579|
|Net Book Value - Bldgs||75,453,432||72,155,386||68,857,340|
(a) Legal transfer of Colleges and Research Stations was completed in March 2007 in the amount of $60.9M. The total transfer amount was based on the net book value of land and buildings held by ORC on behalf of the Ministry of Public Infrastructure and Renewal.
(b) Ongoing renewal and rehabilitation + base building investments to all infrastructure are costs that represent total Capital Transfer Payment received for each fiscal year. Ongoing renewal and
base building expenditures are funded by OMAFRA's TP - Capital. They represent the costs to repair structures, purchase of program-related equipment and leasehold improvements and other upgrades to infrastructure, which are currently not capitalized by the Provincial Govt. Therefore, they are expensed for this exercise instead of capitalized.
(c) Annual amortization for buildings estimated at $2.050 M for existing transferred properties. Amortization for new/additional buildings is calculated at annual cost spread over 40 years estimated useful life. Example: $3.0M/40 years = $75k per year
(d) Transfer of Capital Assets from MGS (ORC) to ARIO results in the following balances:
Note: Balance of Deferred Revenue is reduced by $2.16M annually, which represents the estimated annual amortization charged on the buildings originally transferred/donated by MBS.
Original Transfer (06/07):
Colleges Research Stations Total Land 3,099,400 10,979,680 14,079,080 Buildings 27,423,615 19,493,512 46,917,127 Acc Amort'n 0 0 0 Net Bldgs
(Also "Def Revenue")
27,423,615 19,493,512 46,917,127 Total 30,523,015 30,473,192 60,996,207
(e) Elora Livestock Researcn and Innovation Centre at Elora (Mission 2050) - Phase 1 of the Livestock Centre located in Elora, Ontario should be completed (tentatively) by end of the 2014-15 fiscal year or early in 2015-16 and in use shortly afterwards. Therefore, the building will be amortized beginning in 2015-16 with an estimated useful life of 40 years. Amortization is estimated at a total of $675k per year ($27 million / 40 years). Deferred Capital Contributions will also be amortized at the same rate. Provincial funding of $22.15M will be amortized at $550k per year...and Private funding of $5M will be amortized at $125k per year.
(a) All current ARIO trust funds and related accounts are included in these proforma financial statements.
(a) Revenues - Revenues include annual Transfer Payments (TP's) for operations and capital improvements from the Provincial Government as well as contributions from non-provincial sources such as the Federal Govt. and other private agencies/individuals as needed.
(b) Expenditures - Assumed that OMAFRA annual allocations will fund the cost of administration of ARIO (i.e. salaries/wages, employee benefits, ODOE) from a human resources perspective. The actual costs of additions/betterments to the capital assets (land and bldgs) is not shown as an expenditure, but is added to the balance of Capital Assets as shown on the Balance Sheet.
(c) Research/Program funds: include revenues and expenditures for all current research funds and programs, including the following:
- Plant Germplasm Royalties
- Technology Royalties
- New Directions in Research
- Food Safety
ARIO Risk Management Plan Summary
Risk Category: Strategic
Risk Statement Existing Risk Mitigation Activities Risk Priorit-
Risk Management Plan Score
Rating Rationale Strategic direction /objectives / mandate not clearly understood by external stakeholders and some internal ministry staff Communications plans for major initiatives (e.g. 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 9 Low See Scores Option Chosen: Accept Rationale: Risk is low and is mitigated on an ongoing basis 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 Results-based Planning (RbP) process, leverage additional funds from other levels of government (GF2), industry partners, & academia. Infrastructure: Continue to identify capital allocation needs through the annual Results-based Planning process, leverage additional funds from other levels of government, industry partners & academia. As part of 2014-15 PRRT (RbP) process $15 million re profiled to fiscal 2018 and 2019 17 Medium Key component of long term research program effectiveness
Option Chosen: Accept Rationale: No choice but to continue to inform & advocate to senior management through annual RbP Inability to generate stakeholder support for the strategy to revitalize the agri-food research infrastructure system Have now established industry support for Infrastructure Strategy, including a joint committee in the livestock sector that is working on new governance and funding models. Turfgrass industry has notionally accepted the need for industry commitment to rebuild GTI. Continued identification of needs and progress through OPS annual RbP process
Have established financial contribution parameters that have been accepted by industry groups. Risk Option: Accept Rationale: Industry has helped to establish a precedent by committing to contributing 20% of the cost of the new Elora dairy research facility now under construction. Industry contribution will be one of the determinants in future decisions on which projects to support. Advice and recommendations on research needs and resource allocation not reflective of sector needs The advice provided to the Minister by ARIO is an important part of setting the direction & resource allocation for agricultural and agri-food related research in the province. Ministry staff work closely with and assist ARIO members in developing recommendations made by ARIO to the ministry. ARIO only provides advice to the Minister. All decisions on research direction & resource allocation are the responsibility of the ministry & take into account ARIO recommendations & other stakeholder recommendations / feedback. 6
Low See Scores Risk Option: Accept Rationale: ARIO provides advice on research needs and resource allocation & is only 1 component of the decision making process. All decision making authority rests with the ministry. ARIO is only one part of the advice informing priority setting & resource allocation.
Risk Category: Accountability/Governance
Risk Statement Existing Risk Mitigation Activities Risk Prioritization Risk Prioritization Risk Prioritization Risk Management Plan Score
Rating Rationale 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 Research & Corporate Services Division. Continued training & orientation of ARIO membersEnsure ministry staff & ARIO members are familiar with ARIO-OMAFRA Memorandum of Understanding (MOU) which details all roles & responsibilities as defined in the ARIO Act 14 Low
Role of ARIO has been established for a very long time.
Risk Option: Accept Rationale: No other option Central agencies understanding of ARIO agency's role and structure Continued discussions with central agency staff to communicate role of ministry staff, ARIO role & governance structures & relationship to ministry 14 Low
Continue to work with and educate central agency staff.
Risk Option: Accept Rationale:
No other option. Mitigation is continual & ongoing
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. 6 Low Some difficulty in addressing priorities due to gaps in membership expertise. e.g food processing Risk Option:
Mitigate Rationale: Continued focused effort to identify good candidates that fill gaps in the membership.
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 & members are familiar with MOU which details all roles & responsibilities as defined in the ARIO Act 8 Low See Score Risk Option: Accept Rationale: New member training and role of ARIO often discussed at meetings Inherent government liability in ARIO agreements (e.g. 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 on all agreements - research and tenant Risk Option: Accept Rationale: Mitigation is continual & ongoing through extensive reliance on Legal & BPFMB on any and all agreements etc.
Risk Category: Operational
Risk Statement Existing Risk Mitigation Activities Risk Prioritization Risk Prioritization Risk Prioritization Risk Management Plan Score Rating Rationale Inability to effectively & efficiently operate & manage the infrastructure portfolio. All of the ARIO owned properties are operated & managed under agreements with third parties. The University of Guelph operates & manages all of the properties except the Vineland research station which is operated & managed by VRIC. The risk is low given the UofG's experience in managing the same properties for many years. The licence agreement between ARIO, UofG & the ministry & the management agreement between ARIO & VRIC details all roles and responsibilities of each party for operation, management and maintenance of the properties. The UofG & VRIC submit an annual prioritized capital plan that details need property maintenance & repairs. Decisions on funding are the responsibility of ARIO.There is a very good working relationship between ARIO, UofG, 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. ARIO Secretariat (Research and Innovation Branch) is governed by OMAFRA emergency and business continuity planning which is considered adequate for ARIO purposes. 13 Low
Ongoing work with service providers (UofG & VRIC). Issues identified and dealt with on as they arise.
Risk Option: Accept Rationale: Issues are identified & managed on an ongoing daily basisRelationship with service providers well established and very strong (UofG and VRIC) Inadequate business continuity plans 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: Accept Rationale: All facilities have individual emergency management procedures/plans Tenant or delivery agent activities which result in changes in PIL/Tax and assessment Tenants and delivery agents are carefully screened to ensure that they are compatible with ARIO's mandate and direction. Sublet agreements require Director of Research approvalAll 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 & cost allocation. 14 Low Overall financial implications are minor. Risk Option: Accept Rationale: No other choice. Overall risk/ impact is lowMost tenant agreements make tenant financially responsible.
Risk Category: Information Technology and Infrastructure
Risk Statement Existing Risk Mitigation Activities Risk Prioritization Risk Prioritization Risk Prioritization Risk Management Plan Score Rating Rationale Potential damage or destruction of property The risk of loss is low. 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 previous Ontario government ownership of these properties. Leases and occupancy agreements require tenants (including the UofG) to carry adequate liability insurance. Tenants 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 per Ontario Government policy. If ARIO's existing resources are insufficient a request for funding for repair of damage would be made to the Ministry.Lease revenue and capital TP are available to assist with repair of major and uninsured damage when it occurs. 13 Low See mitigation activities. ARIO as a government agency is included in the government's self insurance scheme per government policy. Risk Option: Accept Rationale: Property risks (theft, fire vandalism) are well managed. Each site has individualized emergency management procedures/plans. Service provider (UofG) very responsive to any items that come up. 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. 14 Low Continuously working with service providers. Risk Option: Mitigate Rationale: RIB is focusing on developing succession plans.RIB is in the process of implementing a pilot KMS.
Risk Category: Other
Risk Statement Existing Risk Mitigation Activities Risk Prioritization Risk Prioritization Risk Prioritization Risk Management Plan Score
Rating Rationale 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
Risk Option: Mitigate Rationale: Investments are managed externally by a profession firm with oversight from RIB staff.Investment plan is very conservative focused on capital preservation.
|Creation Date:||26 November 2015|
|Last Reviewed:||26 November 2015|