CFFO: Ontario Exports Reach all time High but Challenges Remain

By Nathan Stevens

Earlier this month, the government of Ontario celebrated crossing the ten billion dollar threshold in food exports. In addition, a recent session held by the Cross Border Transportation Centre at the University of Windsor outlined the challenges facing exporters targeting the American marketplace. In order for our food exports to continue to grow, we need to focus on achieving greater efficiencies when it comes to moving food across the border.

Ontario has one of the largest food processing hubs in North America with over 3,000 businesses involved in food processing, employing over 100,000 people. This is a tremendous asset for Ontario farmers, as having processing close to where food is grown can provide a logistical edge for the entire value chain.

All industries face certain challenges involved in moving goods efficiently across a border. For example, the time cost of ensuring that components will arrive on time ninety-nine per cent of the time amounts to roughly thirty additional minutes per truck. This is a lot of additional labour and fuel being spent.  Agriculture has the special considerations of perishability and the added layers of inspection related to food.

Stepping back to look at the big picture, the session covered the issue of why complete harmonization of the Canada-US border in a manner similar to the European Union is unlikely. While there are vast areas of common ground between our two countries, there are serious differences. For example, would Canadians be comfortable adjusting our rules regarding the movement and possession of firearms to match those of the United States? Since that kind of change is unlikely, other programs are required.

Improving efficiency by reducing red tape at the border is of growing importance to Ontario agriculture as our processing hub and export opportunities continue to emerge. There is the need to develop agriculture specific programs that move trusted exporters into an efficient position to move goods and reduce costs. The default position is as an unknown entity which needs to be investigated for security and compliance reasons. The second position is one where the business it security cleared. The third position is one of trusted trader where the business is security cleared and known to be in compliance with other regulations.

Agriculture is not very well engaged on developing a trusted trader position for a few reasons. Government tends to treat all businesses within a sector in the same manner. A mistake or abuse my one firm has the ripple effect of impacting the entire industry. A single food contamination issue could jeopardize such a program. This means that our diverse sector with a wide array of businesses needs to place a focused effort to meet these challenges head-on.

Ontario has a growing and vibrant export food sector, having crossed the ten billion dollar threshold. Yet there are challenges that are holding the sector back from reaching its full potential. With a strategic effort we can reduce the red tape and other barriers that are reducing the sector’s potential, and grow the opportunities for farmers and processors.

Source: CFFO