Agricultural Research Institute of Ontario Business Plan April 2017- March 2020

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Executive summary

In 2016 the agri-food and agri-products industry contributed more than $36 billion (thirty six billion dollars) to the Ontario economy and employed approximately 790,000 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. OMAFRA 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. OMAFRA supports rural and urban communities and a high quality of life for all Ontarians. Keys to achieving success include ensuring protection and assurance in the agri-food system (e.g. food safety and animal, plant and human health); providing stewardship of Ontario's capacity to produce food (e.g. soil & water quality, climate change) and fostering economic development of the agri-food sector and rural Ontario (e.g. 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. Leading the ARIO's Infrastructure Strategy initiative 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 (e.g. New Directions, Food Safety), and the 17 ARIO owned research properties with over 7,000 acres, 300+ buildings with a book value of approximately $83 million (eighty-three million dollars) (including capital projects under construction), and over 40 tenants that include government, not for profits, industry and private.

In 2016 a Mandate Review of the ARIO found that the mandate remains strongly aligned to the Government of Ontario's goals and priorities and did not recommend any changes to the mandate. For more information on ARIO's Mandate Review see section B of this Business plan.

Key ARIO accomplishments for the 2016/17 fiscal year include:

ARIO's Infrastructure Strategy

Vineland Research and Innovations Centre (VRIC) at Vineland:

  • Grand opening of the new research greenhouse facility in June 2016.

Livestock Research and Innovation Centre at Elora:

  • OMAFRA engaged Infrastructure Ontario on behalf of ARIO to acquire additional land to expand the Elora research station to support current activities and future development. This acquisition was completed during the first half of 2016.

Other Centres:

  • Implementation of the ARIO's Infrastructure Strategy recommendations continued:
    • Planning is underway for new field crops services buildings in both New Liskeard and Winchester. Construction is expected to begin in the summer of 2017.
    • Planning continued on a new facility for the Guelph Turfgrass Institute and the relocation of research plots with detailed site design and plot construction underway. A transfer payment between the University of Guelph and ARIO was signed and initial funds transferred.
    • Ongoing discussions with Beef Farmers of Ontario regarding the consolidation of beef research at Elora and New Liskeard continued throughout 2016. A Memorandum of Understanding was signed with the Beef Farmers of Ontario for the construction of new beef cow-calf research facilities at the Elora Research Station. Construction is expected to begin in 2017.

Minor Capital program

  • Focus of the 2016-17 programs continued to be 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. Over 80 projects were undertaken during the year including numerous physical infrastructure upgrades at Ridgetown, Huron, Alfred, Winchester and Vineland.
  • Ongoing effective administration and managerial oversight of the current research infrastructure portfolio is provided by the Secretariat (Research and Innnovation staff).

Research Programs

  • Continued to support modernization of research program administration through ongoing development of the Research Management System (RMS). Focus continued to be on increasing functionality and capacity of RMS to capture and retrieve more research results data, and to accelerate knowledge translation and transfer, thereby, increasing adaptation and commercialization opportunities.
  • Continued effective administration of OMAFRA's open research programs (New Directions and Food Safety) and other research programs (e.g. Plant Germplasm Revenue Reinvestment) by Research and Innovation Branch (RIB) staff (ARIO Secretariat). Total annual expenditures of approximately $3 million (three million dollars).
  • 2015/16 included research calls related to: Soil Health and Carbon Sequestration; Preparing Rural Infrastructure for a Changing Climate; Antimicrobial Resistance; and Food Safety.

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 with implementation of the ARIO's Infrastructure Strategy and looks forward to the next phases of development and implementation 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 (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 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 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 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 representative of the agri-food sector, is dedicated to the strategic use of science and innovation to enhance the sustainability and profitability of Ontario's agri-food and rural sectors"

ARIO Manadate Review

An externally commissioned review of the mandate of ARIO was completed in 2016. Agency mandate reviews must be completed at least once every seven years in accordance with the revised Agencies and Appointments Directive (AAD).

The review noted:

  • ARIO's mandate remains strongly aligned to the Government of Ontario's goals and priorities as set out in the 2016 Mandate Letter to the Minister of Agriculture, Food and Rural Affairs. As such, recommends that ARIO maintain its current mandate without change.
  • ARIO should continue to communicate its mandate in a clear and consistent manner to both internal ministry and external sector stakeholders to ensure clarity of mission and objectives.
  • ARIO should remain committed to its role as advisor to the Minister on strategic directions for research activities that contribute to prosperous, competitive and sustainable agricultural and food sectors and rural communities in Ontario. ARIO should also continue in its role as an advocate for the future of OMAFRA's agriculture research system.
  • ARIO should remain a key component of the OMAFRA Research Advisory Network - a network of advisory bodies that provide long-term, strategic guidance for research program development as well as identification of short· term and emerging research priorities in seven research theme areas.
  • ARIO should continue in its role as real property owner of Ontario's research facilities and infrastructure. In this capacity, ARIO can continue to revitalize research infrastructure to support demand-driven research.
  • ARIO should continue implementation of its infrastructure strategy leading to a modern, integrated agri-food and agri-products research and innovation system with state of the art infrastructure capacity built on shared funding models between industry and government.
  • ARIO should continue in its role as a catalyst of support for the Ontario agricultural research system, leading to stable, adequate and growing funding that is aligned to the strategic research priorities of Ontario.
  • ARIO should continue with the model of sourcing secretariat services from OMAFRA to provide administrative and managerial oversight of the current research infrastructure, including the minor capital program.

The final report recommends that the Government of Ontario should continue to deliver the mandate of the ARIO using the agency structure. However the following recommendations were also made in order to explore whether the agency could be better aligned with its AAD classification:

  • ARIO should update the MOU between the Minister, the Director of Research and the Chair of ARIO, dated July 21, 2011 ("the MOU"), which sets out the governance structure of the Agency to reflect the Agencies and Appointments Directive that became effective February 2015.
  • When updating the MOU, ARIO should consider taking the necessary steps to constitute a formal Board of Directors with increased accountability to the Minister. The Agency would otherwise remain classified as an Operational Service Agency, and continue to operate in the same manner as it currently does.

OMAFRA's Response to Mandate Review

The recently completed mandate review serves as ARIO's mandate letter for the coming year.

ARIO will continue as a provincial agency as currently structured. The Ministry is not planning to undertake a review to determine whether a formal Board of Directors for ARIO should be constituted at this time. The Ministry will revise the MOU between the Ministry and ARIO to ensure alignment with the requirements of the AAD and will report back to Treasury Board (TB) by end of Q1 fiscal 2017-18 (June 30, 2017) confirming that it has been done.

ARIO's Response to the Mandate Review

ARIO will continue to provide strategic advice to the Minister on research activities and infrastructure. ARIO will also continue implementing the infrastructure strategy by moving forward with the construction of a beef research facility, new field crops services buildings in northern and eastern Ontario (New Liskeard and Winchester), and supporting construction of a turfgrass facility at the University of Guelph. Planning will continue for the relocation of poultry and swine research into new state of the art research facilities at Elora. ARIO will continue to look for options to dispose of the Alfred and Kemptville properties looking to transfer them to local interests where they can best be repurposed to provide economic benefit to their local communities.

Environmental Scan

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

This envirionmental scan describes the envirionment 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 exernal environment that could have an impact on the operation of the agency.

This environmental scan has been informed by: ARIO members and support Secretariat; OMAFRA's ongoing environmental scanning; the 2016 Synthesis Agri-Food Network report commissioned by OMAFRA to identify and analyze key trends and issues that will shape Ontario's primary agriculture, food, beverage and bio-processing sectors over the next ten years; and, the 2008 world-wide scan of how other jurisdictions organize and manage agricultural and agri-food research and development completed by KPMG on behalf of ARIO.

External factors

Legislative, regulatory or policy changes
  • Ontario's Open Government Initiative is about creating a more open and transparent Government for the people of Ontario. The Open Data Directive promotes an Open by default approach to the release of government data.
    • 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.
  • The next Agricultural Policy Framework will be put in place effective April 2018, as will the next Partnership Agreement between OMAFRA and the University of Guelph. There is opportunity for ARIO to have input into the development of both of these initiatives.
    • ARIO members have been, and will continue to provide input to the development of both of these significant multi-year initiatives.
Fiscal environment and economic outlook
  • Ontario's budget reinforced the commitment to eliminating the deficit by 2017 -18 while building Ontario up through priority investments that create jobs, expand opportunity and secure prosperity for Ontarians. The budget 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 Alfred and Kemptville research stations.
  • In 2013 the Premier announced an Agri-Food Challenge to the industry to double its annual growth rate and create 120,000 new jobs by 2020.
    • ARIO supports the Premier's challenge through its open research programs and through its Infrastructure renewal strategy that provides the modern research platforms necessary to help sustain and grow competitiveness for the agri-food and agri-products sectors locally, nationally, and globally.
Changes and trends in the environment
  • Changing climatic conditions are having a global impact.
  • Ontario is undertaking an initiative to assist in the development of Agriculture in the North.
  • 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 requesting healthier foods to accommodate health, disease, intolerances, allergies and cultural preferences (e.g. new world products). To meet these demands, retailers will respond by requesting specialized products and more variety as well as changes in the way food is produced and processed 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.
    • ARIO will remain committed to its role as advisor to the Minister on strategic directions for research activities that contribute to prosperous, competitive and sustainable agricultural and food sectors and rural communities 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

Key cost and program delivery drivers
  • As a government funded agency, there is always potential for change based on government policy and industry needs. ARIO has been able to manage change over the years as government priorities, policy and industry needs evolved.
    • With no growth in government funding, ARIO and its administrative secretariat remains committed to finding cost savings and identifying further efficiencies for program and service delivery. As the Partnership Agreement with the University of Guelph is renegotiated, ARIO and its administrative secretariat will be especially important with respect to the management of the ARIO portfolio of research properties. ARIO will continue to seek a shared financial commitment (20%) with industry on all research capital infrastructure projects.
Workforce demographics and labour relations issues
  • ARIO and OMAFRA are aware that staff turnover through retirement in the administrative secretariat (RIB) over the next few years is likely to be high.
    • ARIO is aware that OMAFRA expects to include these potential vacancies in their succession planning and knowledge transfer initiatives.
Program reviews, audits, surveys and recommendations
  • In 2015/16 OMAFRA conducted a Research and Technology Transfer Review. In 2017/18 the recommendations of this review will begin to be implemented.
    • ARIO is aware of the recommendations, and will be working with OMAFRA to implement those that affect ARIO and its infrastructure and research programs.

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

  • Providing advice and advocacy in responding to technical, social, and environmental changes.
  • Objective and unbiased research to facilitate a proactive approach to adaptation in the sector, keeping in mind the importance of public good (social, environmental, economic).
  • Implementation of the Research Infrastructure Strategy providing the necessary modern, state of the art research platforms necessary to sustain and grow competitiveness of the agri-food sector.

Overview of Current and Forthcoming Programs and Activities

The Director of Research for ARIO (appointed by the Minister under the authority of the ARIO Act), the appointees of the Director of Research for ARIO and the delegates of the Director of Research for ARIO (RIB as 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
  • Continue to advise the Minister on research priorities and issues related to the ministry's mandate to support growth of the agri-food sector, the Northern Growth Plan 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 on the current Uof G/OMAFRA Partnership Agreement and on emerging research centre governance models e.g. Livestock Research & Innovation Corporation (LRIC) and the Vineland Research and Innovation Centre (VRIC).
  • Provide advice on the UofG/OMAFRA Partnership Agreement renegotiations. The existing Agreement ends March 31, 2018.
  • Provide advice on the development of the next Agriculture Policy Framework (current GF2 programs end March 31, 2018).
  1. Leadership - Implementation of the Infrastructure Strategy

In support of the Ministry's mandate, continue implementation of the research 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. Consolidate livestock research at the Elora research station, including working with industry to plan for the relocation of swine and poultry research to Elora
  2. Enhancing beef research capacity at the Elora research station
  3. Acquisition of additional lands in proximity to the Elora research station to facilitate consolidation of research at Elora
  4. Working with the turfgrass industry and the University of Guelph to develop detailed plans and begin implementation of relocating from the Guelph research statioContinue to refine, develop and implement investments in the three remaining centres (enhanced field crops; bioeconomy; food for health).
  5. Continue to refine, develop and implement investments in the three remaining centres (enhanced field crops; bioeconomy; food for health).
  1. Promoting 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 that is necessary to maintain and strengthen Ontario's local, national and global competitiveness in the agriculture and agri-food and agri-product sectors.

  1. Managerial Oversight
  • Provide operational and managerial oversight of the 17 agri-food research locations comprised of over 300 buildings, 7,200 acres and over 40 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. OMAFRA provides $4 million (four million dollars) in annual funding to ARIO in support of the ARIO Minor Capital Program. An annual capital program prioritized project list is established during discussions between the Secretariat, and the UofG and VRIC. Once approved by ARIO, day to day site project management and implementation is provided by the UofG and VRIC with oversight by the Secretariat.
    2. The Base Building component of the program is used to support projects related to human health and safety, code compliance, building integrity, life cycle replacement, and efficiency, conservation and cost containment to enhance program delivery and building performance.
    3. The Infrastructure Renewal (program-related) portion of the program supports projects addressing animal care, including health, safety and well-being, program needs and priorities as well as some dedicated equipment replacements.
  • Continue to provide effective and efficient administration of current OMAFRA Open Research and other programs (e.g. New Directions; Food Safety, Plant Germplasm Reinvestment, Proof of Priniciple, etc.)
  • Continue to provide effective and efficient administration of financial operations/ programs including all aspects of financial reporting, consolidation with OMAFRA, and administration of Open Research Programs and other 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:

  1. Leadership - Implementation of ARIO's Infrastructure Strategy

In support of the ministry's mandate to support growth of the agri-food sector, the Climate Change Action Plan and the Northern Growth Plan driving environmental sustainability, expansion of agriculture in the north and economic growth across the value chain, 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, e.g. industry, government and academia achieve improved access and collaboration

For more information visit the ARIO website.

  1. 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 and rural research. The current focus is on the ARIO's Infrastructure Strategy, the UofG/OMAFRA Partnership including ongoing research themes and priorities, and the emerging governance models under the ARIO's Infrastructure Strategy (e.g. LRIC) and on the strategic direction of agri-food research in the province.

  1. Promoting Ontario's Agri-Food Research and Innovation 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 ARIO's Infrastructure Strategy through increased ARIO member engagement with agri-food industry stakeholders.

  1. 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 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 (RIB) of OMAFRA. ARIO also receives some revenues from leasing land and buildings within its property portfolio. Funding for major capital projects (implementation of the ARIO's Infrastructure Strategy) is requested and approved annually as a key component of OMAFRA's PRRT: Program Review, Renewal and Transformation budget process.

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 $1.3 million (one million three hundred thousand dollars) annually. . 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 $50,000 (fifty thousand dollars)/yr of the $1.3 million (one million three hundred thousand dollars) 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 has greatly impacted financial and operational reporting activities of the Secretariat.

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.

Current (2016-17) Research and Innovation Branch secretariat support to ARIO:

Research and Innovation Branch

  Director Research Unit ARIO Secretariat Finance, Infras. & Admin Innovation Unit Total
  ARIO 40% ARIO 50% ARIO 100% ARIO 80% ARIO 30% ARIO $$
Salaries and Benefits 65,600 381,000   504,000 218,100 1,168,700
Operating 42,000 17,500 55,000 12,000 40,439 166,939
Total 107,600 398,500 55,000 516,000 258,539 1,335,639

Risk Identification, Assessment and Mitigation Strategies

ARIO is classified as 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.

As specified in the ARIO Act all ARIO business decisions are the sole responsibility of the Director of Research appointed under the Act. 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 OMAFRA through the RIB. Funding for programs and properties administered by ARIO is provided largely through OMAFRA and the government's budget process.

Implementation of the ARIO's Infrastructure Strategy requires significant funding over the next several years. OMAFRA is implementing the recommendations of the ARIO's Infrastructure Strategy (e.g. dairy facility at Elora (2015), a research greenhouse at Vineland (2016), new Guelph Turfgrass Institute at the University of Guelph and Elora and beef barn at Elora (2017)). It is always possible that budget constraints, economic and political realities might cause delays in completing ARIO's Infrastructure Strategy. However, given budget commitments and progress to date, and, that the ARIO's 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 Business Planning and Financial Management Branch(BPFMB and central agencies in submission of annual updates and refinements to the strategy captured in their processes.

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 and changes in government funding priorities, neither of which can be predicted with 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 Industry has accepted the idea that they need to be willing partners contributing 20% to all capital renewal projects.

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

Human Resources and Organizational Governance

Membership

ARIO is comprised of up to 15 members appointed by the Minister for OMAFRA and this 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 drawn from a broad cross section of commodity and business interests and geographic areas. Members do not represent any particular organization but hold their position in their own right. ARIO continues to exceed the Premier's commitment to gender diversity (40% female representation by 2019). Currently female representation is at 50% (4 of 8) and ARIO expects to at least maintain this percentage going forward. ARIO is a relatively small group making the challenge of a board that reflects Ontario's diverse make-up difficult. With respect to succession planning, all positions are posted on the Public Appointments Secretariat (PAS) and 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 potential members forward to the Minister for consideration.

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.

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 standing committees to support strong-decision making within ARIO. 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 Committee: Provides advice on the infrastructure, resources and priorities for field crops research.

The following diagram summarizes the organizational structure of ARIO in its current form.

ARIO is comprised of up to 15 members appointed by the Minister for OMAFRA. 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.

Figure 1: The organizational structure of ARIO

Third Party Initiatives

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. An example of this modelwas used to build the new dairy facility at Elora 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 priority setting and overall governance of the site through the Livestock Research Innovation Corporation. 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 and has been accepted by all of the participating industry stakeholders.

In addition, ARIO receives industry funding as a condition of previous capital investments to industry by the province under the Ontario Ethanol Growth Fund (OEGF) to be used to support OMAFRA's open research programs administered by ARIO.

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 and focuses on innovation, competitiveness and market development initiatives.

RIB provides all secretariat, administrative and managerial support functions for ARIO. With respect to research programs, 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 the Ministry of the Attorney General 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 where appropriate.

Implementation Plan for Ongoing Strategies

For 2017-18, the Director of Research, the members of ARIO and the Secretariat will be responsible for the following key activities:

Leadership - Implementation of the ARIO's Infrastructure Strategy

Continue implementation of the Infrastructure Strategy leading to a modern, integrated agri-food and agri-products research and innovation system with industry-influenced governance models and infrastructure capacity, some owned by government and some by industry. Upcoming activities related to the infrastructure component of the innovation strategy includes:

  1. Continue to advance the strategy by:
    1. Development of a site plan by U of G 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 (swine & poultry) and Turfgrass/agroforestry that will be transferred from the GTI and Arkell stations.
    2. Working with MOI and IO to sell parts of the New Liskeard Agricultural Research Station no longer needed to support OMAFRA/ARIO priorities.
    3. Working with the University of Guelph and the Guelph Turfgrass Institute to relocate to the University and Elora.
    4. Working with the beef sector to design and construct new beef research facilities at Elora.
    5. Working with the other primary livestock producers (swine and poultry) to advance plans for relocation to Elora.
    6. Construction of new field crop research services buildings at New Liskeard and Winchester as well as planning for revitalized field crop facilities at Ridgetown.
    7. Continuing the process to divest surplus land and buildings at Kemptville and Alfred campuses.
  2. Continue to work with stakeholders to implement the remaining centres (Bioeconomy, Field Crops and Food and Health).
  3. Continue to look for opportunities for achieving operational efficiencies to support a world class integrated network of research platforms/facilities (e.g. divestment/repurposing of Alfred and Kemptville properties).

Strategic Advice

  • Continue 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.
  • Continue to provide advice on the renewed the Partnership including ongoing research themes and priorities, and the emerging governance models under the Innovation Strategy (e.g. LRIC).
  • Continue ongoing support to research priority setting by providing advice via participation in OMAFRA Research Advisory Network (ORAN) on new and existing research for the agri-food and agri-products sectors.
  • Continue to provide advice on the UofG/OMAFRA Partnership Agreement renegotiations (the existing Agreement ends March 31, 2018).
  • Continue to provide advice on the development of the next Agriculture Policy Framework (current GF2 agreement expires March 31, 2018).

Promoting 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.

Managerial Oversight

Continue to:

  • Provide operational and managerial oversight of the 17 agri-food research properties comprised of over 300 buildings, 7,200 acres of land and over 40 tenants (both government and non-government) to ensure effective and efficient management of the research property portfolio in support of the various research programs.
  • Provide effective and efficient administration and managerial oversight of current OMAFRA open research programs (currently New Directions, Food Safety, Plant Germplasm Reinvestment, Proof of Principle etc.)
  • Provide effective and efficient administration and managerial oversight of all financial operations/programs including all aspects of financial consolidation of ARIO with OMAFRA.

Communications Plan

Objectives

In alignment with both the government's plan to build Ontario up through investments in the economy, people and infrastructure of Ontario and OMAFRA'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:

  1. Raise awareness to industry, government and the public (e.g. at stakeholder annual meetings, conferences) of the contributions that Ontario's agriculture sector (agri-food and agri-products research, innovation and knowledge transfer) makes to the province (in areas such as the economy; health; environmental protection; social good and job creation).
  2. Advance the ARIO's Infrastructure Strategy through internal and external communication opportunities and materials that provide progress updates on efforts working with industry stakeholders/partners to modernize research infrastructure that supports Ontario's agri-food sector's competitiveness.
  3. Raise industry and the public's awareness (through outreach events such as Canada's Outdoor Farm Show) of Ontario's agri-food research priorities and strategic partnerships that align with stakeholders (e.g. industry, AAFC, and universities, particularly the UofG) and that strengthen Ontario's agri-food research and innovation system.
  4. Establish and enhance working relationships among key partners and stakeholders (e.g. LRIC, VRIC, Agri Technology Commercialization Centre [ATCC]) to strengthen strategic partnerships to leverage communications/ research/ promotional opportunities to advance agri-food and agri-product research and innovation.

Key Messages

  • Ontario's agri-food sector is one of the province's leading economic engines, contributing $36 billion (thirty six billion dollars) annually to the province's GDP.
  • Agri-food produces substantial economic returns. The greatest returns come from enhancing the value of food products and processes through research, innovation and knowledge transfer.
  • Research and innovation are keys to the success of agri-food businesses in Ontario and are essential to maintaining a competitive and sustainable agri-food sector in Ontario.
  • Research and innovation: creates new opportunities for the agri-food sector, supports enhancement of the public good by providing safe and healthy food and supports the sustainability of agriculture and the environment.
  • Investments in research and innovation will enhance the sustainability and profitability of Ontario's agri-food and rural sectors, strengthen Ontario's economy and create more good jobs for the people of this province.
  • Partnerships such as with the University of Guelph and the 17 agri-food research stations throughout the province are key pillars that support Ontario's agri-food research and innovation system

Key Audiences/Stakeholders

  • Innovation partners (e.g. LRIC, VRIC, ATCC);
  • Industry partners across sectors sectors including commodity organizations, food processing/retailing bioeconomy, health sciences, agri-technology, knowledge mobilization;
  • Academic institutions such as universities with an interest in agriculture, agri-food, and/or rural research priorities (e.g. U of G, Brock University and Trent University);
  • Other governments and agencies across jurisdictions (e.g. Agriculture and Agri-Food Canada, provincial counterparts (e.g. AAFC, counterparts in other provinces (e.g. Alberta, Quebec) and agencies (e.g. Genome Alberta);
  • General Public; and
  • Farming, rural commties and other rural audiences

Tools and Tactics

  • Internal communication materials to brief OMAFRA's Minister and senior management on progress and successes to date and on implementing next steps of the ARIO's Infrastructure Strategy;
  • Formal annual reports and business plans submitted to the Minister containing updates regarding the ARIO's Infrastructure Strategy and the operational and managerial oversight of the 17 research stations;
  • ARIO meetings that provide an opportunity to engage key partners and stakeholders in supporting planning, evaluation and reviewing, updating and advising on agri-food and agri-products research priorities and issues; and
  • Stakeholder and partner engagement/communications activities planned in consultation with OMAFRA, including opportunities to participate in various industry trade shows, outreach events and annual meetings.

Potential Communications Opportunities in 2016-17

Event

Date

New Field Crop Services Buildings at New Liskeard and Winchester Summer 2017 (TBD)
OCE Discovery 2017 May 2017
LRIC - New Beef research facility announcement (ground breaking) Fall 2017 (TBD)
LRIC - New Swine research facility announcement (MOU signing) Spring 2017 (TBD)
Guelph Turfgrass Institute - ( Relocation announcement) Summer 2017 (TBD)
Outdoor Farm Show September 12-14, 2017
International Plowing Match September 19-23, 2017
Ontario Economic Summit, Niagara-on-the-Lake November 8-10, 2017
Royal Agricultural Winter Fair November 3-12, 2017

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

Financials

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.

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 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 $1.3 million (one million three hundred thousand dollars) (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 Balalnce Sheet and Financial State showing projected revenues and expenses for 2016-17, 2017-18, 2018-19 and 2019-20is 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 (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 (2012-18)

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.

Achievements:

The LRIC at Elora: The Livestock Research and Innovation Corporation (LRIC), representing the primary livestock commodity groups (Beef Farmers of Ontario, Ontario Pork, Dairy Farmers of Ontario and the Poultry Industry Council) have confirmed 20% support for the capital costs of redevelopment of Elora into the Livestock Research and Innovation Complex. 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 and is demonstrated through the dairy industry contribution of $5million (20%)towards the $25 million new dairy research facility recently completed.

The Beef Farmers of Ontario have committed to contributing 20% of the capital cost of the new facility and have made an intialinitial payment to ARIO.

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.

Accountability and efficiency in the operation of infrastructure

Infrastructure Operation & Maintenance measures that consider third party investment in Operation & Maintenance, efficiencies and offsets developed. 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 UofG (on behalf of ARIO).

  Client Service Standards ARIO participates in periodic client service standards review as part of RIB.

Appendix A - Strategic Recommendations

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.

Recommendation 1

ARIO endorses a new infrastructure vision, mission and principles to guide the implementation and communication of the Infrastructure Strategy

Vision: ARIO endorses a new infrastructure vision, mission and principles to guide the implementation and communication of the Infrastructure Strategy

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:

  • All recommendations and actions are taken to establish Ontario as having a world-leading integrated system (human and physical capacity) for agri-food research, discovery, adaptation and commercialization
  • Investment in the system infrastructure must create tangible value for participants in the agri-food sector
  • Investment in the system infrastructure must provide value to the broader public
  • Investment in the system infrastructure will be done in close connection with the private sector to assure that the research leads to market-driven products

Recommendation 2

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):

  • Challenging regions across the province to develop concepts for regionally/sector-championed and supported centres for agri-food research, discovery, adaptation and commercialization.

Requiring strong, committed, visionary leaders and teams for driving these ideas forward (champions)

Recommendation 3

Working with champions, develop a purpose and focus for each centre.

  • Each centre will:
    • Advance research and innovation (research)
    • Generate new ideas and bring them to market (value-added)
    • Be a visible hub for regional and community activity (community)
  • Centres will share in the direction of effort and results, providing regionally-championed, sector-oriented solutions.

Recommendation 4

Establish logical groups and relationships to create appropriate models.

  • Centres will link to the UofG's hub of basic research and knowledge translation, leveraging off OMAFRA's sustained commitment through the new Partnership Agreement
  • Champions will define the infrastructure requirements to support the value-added vision for agri-food research, discovery, adaptation and commercialization in Ontario, expecting that they include provincial, federal and other infrastructure capacity.

Recommendation 5

Establish parameters by which OMAFRA and ARIO shepherd and support centres.

  • Confirm ongoing government role (emphasis may vary and evolve over time)
    • Continue to set strategic direction
    • Continue to provide core funding support
    • Continue to provide regional and technical support
  • Sponsor the creation of new partnerships across governments, with universities, research institutions and the private sector, where appropriate.

Recommendation 6

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.

Appendix B - 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.
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 (currently Manager, Corporate Controllership in OMAFRA) 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 C - ARIO Proforma Financial Statements

Agricultural Research Institute of Ontario (ARIO)

2016-17 RbP - Forecast

Proforma Statement of Financial Position

Assets Opening (April 1, 2016) Trans-actions End Balance (Mar 31, 2017) 2017-18 2018-19 2019-20
Cash 0 1,464,560 1,464,560 3,139,220 4,658,880 6,178,540
Temporary Invest-ments 32,421,349 2,052,099 34,473,448 16,823,448 17,673,448 19,323,448
Accounts Receiv-able 251,583   251,583 251,583 251,583 251,583
Prepaid Land Deposits 250,000 (250,000)        
Cash and invest-ments restricted for land purchase 13,018,125 (13,018,125)  
   
Capital Assets under construc-tion   3,000,000 3,000,000
8,5000,000
  7,500,000
Capital Assets - Net 79,874,364 10,481,335 90,355,699 103,898,508 117,016,317 112,921,626
Total Assets
125,815,421
3,729,869
129,545,290
132,612,759
139,600,228
146,175,197

 

Liabilities Opening (April 1, 2016) Transactions End Balance (Mar 31, 2017) 2017-18 2018-19 2019-20
Accounts Payable 1,622,680
1,622,680 1,622,680 1,622,680 1,622,680
Holdbacks 602,853
602,853 602,853 602,853 602,853
Deferred Revenue 380,736
380,736 380,736 380,736 380,736
Sub Total Current Liabilities 2,606,269 2,606,269 2,606,269 2,606,269 2,606,269
Deferred Capital Contribution - Original Infra. Tfr 53,657,716 (3,244,691) 50,413,025 46,955,834 43,073,643 38,978,952
Deferred Capital Contribution - Mission 2050 - Prov Funding 28,226,201 3,000,000 31,226,201 31,226,201 31,226,201 31,226,201
Deferred Capital Contribution - Mission 2050 - Private Funding 9,018,755   9,018,755     17,368,755
Deferred Capital Contribution - Research Cluster Centres - Prov Funding
-
2,510,000 2,510,000 5,020,000 10,010,000 17,510,000
Deferred Capital Contribution - Other Investment - Provincial Funding
Sub Total Deferred Capital Contributions 90,902,672 2,265,309 93,167,981 94,560,790 100,028,599 105,083,908
Total Liabilities
93,508,941
2,265,309
95,774,250
97,167,059
102,634,868
107,690,177

 

Equity Opening (April 1, 2016) Trans-actions End Balance (Mar 31, 2017) 2017-18 2018-19 2019-20
Fund Balances 14,852,366 1,464,560 16,316,926 17,991,586 19,511,246 21,030,906
Unclaimed Expendi-tures (Research Programs) 3,447,638
3,447,638 3,447,638 3,447,638 3,447,638
Accumulated Remeasure-ment Losses (30,807)   (30,807) (30,807) (30,807) (30,807)
Contributed Equity 14,037,283
-
14,037,283 14,037,283 14,037,283 14,037,283
Sub Total 32,306,480 1,464,560 33,771,040 35,445,700 36,965,360 38,485,020
Total Liabilities and Equity
125,815,421
3,729,869
129,545,290
132,612,759
139,600,228
146,175,197

Agricultural Research Institute of Ontario 2016-17 RbP Forecast for the Year Ended March 31

Revenue
  2016-17
Full Fiscal Year (12 months)
2017-18
Plan
2018-19
Outlook
2019-20
Outlook
Research
Grants - Provincial 2,000,000 2,000,000 1,850,000 1,850,000
Grants - Federal        
Grants - Other 98,000 378,000 378,000 378,000
Intellectual Property 1,100,000 1,000,000 1,000,000 1,000,000
Sub Total 3,198,000 3,378,000 3,228,000 3,228,000
Property
Grants - Provincial - Minor Capital 4,500,000 4,500,000 4,500,000 4,500,000
Rental income - Provincial 825,869 865,000 870,000 870,000
Rental income - Private industry 1,322,654 1,400,000 1,400,000 1,400,000
Mission 2050 GTI 8,000,000 0 0 0
Operations and Maintenance - Provincial 0      
Operations and Maintenance - Private industry 0      
Transfer payments - payments in lieu of taxes 750,000 750,000 900,000 900,000
Payments in lieu of taxes - IO 82,158 82,160 82,160 82,160
Payments in lieu of taxes - UG and Vineland 114,000 114,000 114,000 114,000
Amortization of deferred capital contribution 3,244,691 3,457,191 3,882,191 4,094,691
Sub Total 18,839,372 11,168,351 11,598,351 11,810,851
Other
Other Income        
Investment income 156,898 121,000 111,000 111,000
Sub Total 156,898 121,000 111,000 111,000
Total Revenues (A)
22,194,270
14,667,351
14,937,351
15,149,851

 

Expenditures
  2016-17
Full Fiscal Year (12 months)
2017-18
Plan
2018-19
Outlook
2019-20
Outlook
Research
Research project\program 2,300,000 2,150,000 2,150,000 2,150,000
Intellectual Property 865,000 865,000 865,000 865,000
Sub Total 3,165,000 3,015,000 3,015,000 3,015,000
Property
Payments in lieu of taxes 1,000,000 1,200,000 1,200,000 1,200,000
Minor capital 4,500,000 4,500,000 4,500,000 4,500,000
Mission 2050 GTI 8,000,000 0 0 0
Operations and maintenance 820,000 820,000 820,000 820,000
Amortization of capital assets 3,244,691 3,457,191 3,882,191 4,094,691
Sub Total 17,564,691 9,977,191 10,402,191 10,614,691
Other
Other expenses 19 500 500 500
Write down of investment 0 0 0 0
Sub Total 19 500 500 500
Total Expenditures (B)
20,729,710
12,992,691
13,417,691
13,630,191
Net Surplus (Deficit) (A - B)
1,464,560
1,674,660
1,519,660
1,519,660

Agricultural Research Institute of Ontario (ARIO) for the Year Ended March 31, 2017

1. Capital Assets 2016-17

>
  Opening Balance (April 1, 2016) Additions Amortization Balance (March 31, 2017)
Land
Original ARIO Property 9,793     9,793
Colleges 3,092,104     3,092,104
Research Stations 10,967,029 13,726,026   24,693,055
Total Land 14,068,926 13,726,026   27,749,952
Buildings
Colleges 38,330,296     38,330,296
Research Stations 48,314,549     48,314,549
Other Infrastructure        
Total Buildings 86,644,845     86,644,845
Less: Accumulated Amortization -20,839,407   -3,244,691 -24,084,098
Total 79,874,364 13,726,026 -3,244,691 90,355,699

 

2. Capital Assets 2017-20

  2017-18 2018-19 2019-20
Land
Original ARIO Property 9,793 9,793 9,793
Colleges 3,092,104 3,092,104 3,092,104
Rsearch Stations 24,693,055 24,693,055 24,693,055
Total Land 27,749,952 27,749,952 27,749,952
Buildings
Colleges 38,330,296 38,330,296 38,330,296
Research Stations 65,314,549 82,314,549 82,314,549
Other Infrastructure      
Total Buildings 103,644,845 120,644,845 120,644,845
Less: Accumulated Amortization -27,541,289 -31,423,480 -35,518,171
Total 103,898,508 117,016,317 112,921,626

 

Appendix D - ARIO Risk Management Plan Summary

Risk Category: Strategic

Risk Statement Existing Risk Mitigation Activities Risk Prioritization 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 8 Low The ARIO Infrastructure Strategy has raised the profile and awareness and understanding of ARIO 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. Constraints have resulted in some reprofiling to out years

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.
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.

Continued identification of needs and progress through OPS annual PRRT process.

Turf, Swine & Beef sectors have committed to funding new facilities.
14 Low 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. Industry contribution will be one of the determinants in future decisions on which projects to support.

Risk Category: Accountability/Governance

Risk Statement Existing Risk Mitigation Activities 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: Completion of mandate review indicated status quo is the best 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.

Central Agencies were active participants in the mandate review.
14 Low Continue to work with and educate central agency staff. Risk Option: Accept Rationale: 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. 8 Low Some difficulty in addressing priorities due to gaps in membership expertise and gender.

Delays experienced in approvals
Risk Option:
Mitigate Rationale: Continued focused effort to identify good candidates that fill gaps in the membership and meet gender and minority guidelines.
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 10 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 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. 10 Low Ongoing work with service providers (UofG & VRIC). Issues identified and dealt with on as they arise.

Excellent working relationship with U of G who have extensive experience and continue to provide professional site operations and management.
Risk Option: Accept Rationale: Issues are identified & 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 (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.

Some adjustments to PILs based on tenant activity have already been made.
11 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 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.

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: Accept Rationale: Property risks (theft, fire vandalism) are well managed. Each site has individualized emergency management procedures/plans. Service providers (UofG & VRIC) 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. 11 Low Continuously working with service providers. Risk Option: Mitigate Rationale: RIB provides secretariat services to ARIO. RIB/ministry succession and contingency plans are considered adequate.

Risk Category: Other

Risk Statement Existing Risk Mitigation Activities 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 Low   Risk Option: Mitigate Rationale: ARIO's Investment plan is very conservative & focused on capital preservation, liquidity and return (in that order).

Investments are managed by a contracted management firm with oversight from RIB staff on behalf of ARIO.

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For more information:
E-mail: research.omafra@ontario.ca
Author: Sara Fisher,RIB
Creation Date: 1 April 2016
Last Reviewed: 26 May 2015