Food processing bigger than auto industry in Ontario: Report

Casco in London, Ontario on Thursday, March 29, 2012. Approximately 1350 tonnes of corn a day is processed into various products like fructose and starch.

Credits: EREK RUTTAN/ The London Free Press /QMI AGENCY


LONDON, ON - Food processing in Ontario is a $39-billion industry and its workforce of 126,000 makes it a bigger player here than the auto sector, a new report says.

In a study released Wednesday, the Alliance of Ontario Food Processors said the province's food and drink sector continues to grow -- at a pace of about 2% per year -- even as traditional manufacturing in Ontario shrinks.

"Ontario has long looked to the automotive industry to fuel the provincial economy but it is clear that food and beverage processing is the economic engine that drives it," the association's president Craig Richardson said in a news release.

Steve Peters, head of the Association of Ontario Food Processors and a former Ontario agriculture minister from St. Thomas, said it's time to change the image of the sector.

"It has the ability to create really good and sustainable jobs," he said.

The group, comprised of food and drink manufacturers, said the sector's annual economic impact is estimated at $67 billion.

In the heart of that wealth is Southwestern Ontario, where most of that food is grown and processed and from where much of the end product is shipped.

They include London-based companies such as corn-sugars giant Casco, beer-maker Labatt, spice leader McCormick Foods and frozen-vegetable processor Bonduelle.

But the sector's economic clout is too often overlooked when governments set economic policy or when they re-work agricultural support programs, Peters said.

"For too long, people have looked at the Ontario economy as having four wheels and we are the engine that drives it as well," Peters said.

In 2010, the data year used in the study, the auto sector in Ontario had revenues of $43.6 billion. Food processing's revenue was $39 billion; add in the value of agricultural products, farm revenue, and the ag-and-food total increases to almost $50 billion.

Direct employment by the auto sector was 31,500 and for food processing was 127,000. Farming jobs added another 90,000, the report says.

The impact of agri-food is not only under-estimated it's often undersold, even by those in the business, agreed David Sparling, who heads the Agri-food Innovation centre at the Richard Ivey School of Business.

"This is a really important sector. It doesn't get enough attention from governments, investors or potential employees," Sparling said.

Auto jobs have traditionally paid better -- a 200-job parts plant will almost certainly generate more economic impact than a similar-sized food-packing plant.

But the steady growth of food processing is an enviable advantage Ontario has over almost any other jurisdiction in North America, the report says.

Sparling agreed. He expects the newly announced Southern Ontario Development Fund, for companies looking to expand their businesses here, will be a great tool for local agri-food companies.

"Those are exactly the big opportunities," he said.
The report is also a lobbying tool for the group, a reminder to governments that food should also be an investment priority.

"Much as you had an auto investment fund, we're advocating for a food and beverage (investment) fund," Peters said.

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