Ontario’s food processing sector is an important economic cluster

Michael Wolfson, the City of Toronto’s Economic Food & Beverage Sector Advisor, had this to say about the economic importance of Ontario’s Processing sector:

Having been involved in the Food Processing sector in Ontario since 1978, I have known for some time what others are just discovering. This industry is the heart and soul of Ontario’s economy. It’s centered in the Greater Toronto Area (GTA) with over half of the Provinces’ processors located here. The cluster is far reaching and includes, farming, primary production, logistics, packaging, machinery, food service, retail, institutional food supply, research centres, colleges and universities, marketing and professional services. It has grown at an average of at least 5% per year ever since I can remember and has weathered many of the economic downturns in the economy over that time.

In 2009, Statistics Canada reported total revenue for the Food Processing sector in Ontario was $33.2 Billion. In 2011, it has probably exceeded $35 billion. Employment in the Food Processing sector in Toronto is in excess of 58,000 people making it the second largest in North America. In 2008, average wages for the Toronto Census Metropolitan Area in the Food and Beverage sector were $20.59 per hour. That is only $2.40 per hour less than the automotive sector, a figure that many find hard to believe. The quality, safety and innovation of our food products are second to none. Many of the food processors in the GTA supply a myriad of retailers with private label items in the U.S. and other countries. Our multi-cultural demographic has grown over the years and has made us the envy of foodies around the world. So what does the future hold in store?

With guidance the sector will continue to grow. Toronto and region have all the makings of a strong and growing food cluster. Agricultural lands surrounding the urban areas, great natural resources, including the largest supply of fresh water in the world, an educated workforce and a strong regulatory climate that insures a safe food supply. Not many areas in the world have this combination. We need to package and promote it globally. New immigrants should be encouraged to set up production of their food products in Ontario rather than import them from their countries of origin. We need to make it easier for them to do this. Access to capital and food production space needs to be improved for our start-up food processors and small to medium size businesses. Approximately 75% of the food processors in Ontario are SMEs. They are also the fastest growing segment.

For so many years this industry has been taken for granted and shunned by investors because of the small return on investment, but the last number of global economic crises has shown the stability of the sector and its safe and steady growth. All levels of government need to recognize the potential of the sector and the influence it has on health, jobs and economic development. With proper care and investment the Toronto area can become a world leader in food development and innovation.

(You can also view this blog post on the Toronto Board of Trade’s website.)

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