THE VOICE OF ONTARIO'S FRUIT, VEGETABLE
AND GREENHOUSE PRODUCERS FOROVER 150 YEARS

OFVGA Response to Bill 172: The Climate Change Mitigation and Low-carbon Economy Act

Photo by Doc Searls, Creative Commons
Photo by Doc Searls, Creative Commons

Executive Summary

1. The OFVGA recognizes that this Bill 172 sets out much of the structure for administering the Cap and Trade system proposed by the Government of Ontario.

2. The OFVGA is concerned that the development of the Cap and Trade system, without the provision for adequate relief, will make the sector uncompetitive.  The OFVGA recommends the use of relief and/or allowances and/or relief mechanisms, to ease the transition of growers into the Cap and Trade system.

3.  The OFVGA is concerned that without further consideration, there will be an immediate erosion of food security, in particular fruits and vegetables, within the Province of Ontario.

4. The OFVGA recommends that the Regulatory Impact Assessment on Cap and Trade be made available to the public and that the impact of Bill 172 on our ability to compete with other sectors jurisdictions be a key analysis brought forward.

5. The OFVGA is concerned about leakage of companies out of Ontario, particularly those in the fruit and vegetable sector, as a result of the implementation of Bill 172.       

6.  The OFVGA recommends that proceeds from the Cap and Trade system, as outlined in Schedule 1, be applied to the fruit and vegetable production sector to enhance its competitiveness. 

INTRODUCTION
The OFVGA recognizes that Bill 172, The Climate Change Mitigation and Low-carbon Economy Act (2016), is designed for the Ontario Government response to climate change and the Cap and Trade initiative.  We also recognize that this Bill is setting the parameters for the administration of the Act, in terms of targets, accounts, transactions involving carbon trading, carbon emissions, inspection and investigation, enforcement and how the proceeds of the Cap and Trade system should be used.  Members of the OFVGA are strongly committed to providing safe and sustainable food to the consumer in a competitive manner.  It is in the best interests of both producers and consumers that healthy food be produced and delivered in the most efficient manner possible and in a way that makes the production of these products competitive in Ontario.  It is with this in mind that the OFVGA is providing commentary on Bill 172.

Food security
The OFVGA believes that the Province of Ontario must ensure the security of its food supply by all means possible.  By engaging in a system which will directly increase the costs of production and hence the cost to retail chains, retailers are more likely to look beyond Ontario’s borders for food supply.  This has many implications including the provision of fruits and vegetables from jurisdictions that do not adhere to the same high standards for food production, including sustainable production practices, labour and environmental impact.  Further, by providing food from other jurisdictions not subject to Cap and Trade (for example, Mexico, Chile, China), the reliance of imported fruit and vegetable supply will be greatly increased, limiting the security of food from Ontario.

Competitiveness
Linked to food security is the ability of our growers to compete with other suppliers in both the domestic and international markets.  In some sectors (greenhouse, ginseng, apples), the export market is a highly valued opportunity.  Ontario growers must try to remain competitive with other jurisdictions in terms of quality of product, methods of production and costs associated with local production.  The increased costs of Cap and Trade through taxes on energy (specifically fuels) will make domestic production less competitive.  Proceeds from the revenue generated from the Cap and Trade program must be put back into Ontario based production to level the playing field with other areas.

Since one purpose of the Act is to enable Ontario to collaborate and coordinate its actions with similar actions in other jurisdictions, the OFVGA recommends that if offset credits and exemptions to the Cap and Trade system for growers exist in other partner jurisdictions that these be applied to domestic production.

Leakage
A key concern of the OFVGA is the potential for its growers to move to other jurisdictions as a result of continued government intervention, whether it is through added regulation, costs or market challenges.  This is happening now, and the Government of Ontario should be very concerned about the impact of this “Leakage” (when money and investment leave the Ontario economy) on the local economies across the province.  In particular, this is being directly seen in the southwestern Ontario area where there is a large concentration of greenhouse vegetable production.  It is very challenging for these producers of such high quality peppers, tomatoes and cucumbers to remain competitive in the export market (primarily the US market) with the added costs of doing business in Ontario.  The Ontario Government should be aware and be looking to develop ways to mitigate this movement of businesses out of the province. The OFVGA recommends that allowances/relief be put in place to address this issue, and that the timeframe for the introduction of these relief be such that the impact of the added costs can be minimized or at least manageable.

Schedule 1: Use of Funds
The OFVGA highly recommends that the funds generated from Cap and Trade be used to enhance the ability of Ontario growers to supply quality product to Ontario’s consumers and to also remain competitive in the export market.  It is recognized by the OFVGA that these funds will be used for greenhouse gas reduction initiatives, and it is recommended that part of the fund be used to address the leakage issue in the same manner as the proposal to grant free allowances, and also to enhance the efficiency of production of growers of fruits and vegetables in Ontario (which will have the impact of decreasing the greenhouse gas contribution from the sector).

The OFVGA would like to have some indication as to the anticipated allocation of funds paid out of the Consolidated Revenue Fund.  In particular, many of these funds are earmarked to the Crown to pay for administration and enforcement of this Act.  The OFVGA recommends that these costs be kept in check and that they be made publicly available on an annual basis.  The fund is also being used to support those activities that are reasonably likely to reduce, or support the reduction of greenhouse gas.  The OFVGA recommends that a fund specifically for improving edible horticultural efficiency be developed from these funds.

Framework
The OFVGA recognizes that Bill 172 sets out the framework for the Cap and Trade system in Ontario.  There are a number of initiatives in the Bill which the OFVGA would like to identify as being in question.

Section 5 (3).  It is stated that the Lieutenant Governor in Council may by regulation set interim targets for the reduction of greenhouse gases.  How will these targets be determined?  The OFVGA recommends a science-based approach based upon Ontario-relative science.

Section 8 (1).  We agree that the Minister should provide a report on the status of the Action Plan, however, recommend that this should be an annual report, rather than at least every 5 years.

Section 21 (2).  The OFVGA questions why the Minister, the Director or other such persons as may be prescribed would be exempted from being a registered participant within the auspices of this Bill.

Section 26 (3). The OFVGA suggests that the Minister or the Director must notify the registered participant prior to removing emission allowances and credits from the participants cap and trade accounts.

Section 33.  Offset registration.  The OFVGA commends the Ontario Government for initiating the ability for offsets under this Bill, and recommends that agricultural activities specifically tied to capturing and sequestering carbon be included as part of the offsets as per Section (3) (a) – designed to reduce greenhouse gas emissions, to avoid the emission of greenhouse gases or to remove greenhouse gases from the atmosphere and (b).

Section 48 (1) provides details of fines for first and subsequent convictions under the Act.  Then Section 49 provides information on those Acts which could apply to these subsequent convictions. The OFVGA recommends re-ordering these sections to reflect 49 first.

Section 69 (1).  The OFVGA recommends at least one of the Directors be specifically from agriculture, and preferably from the edible horticultural sector.

Schedule 1 Section 2.  It is recommended that the wording for “Initiatives relating to the reduction of greenhouse gas from land use and buildings including the following” be amended to “Initiatives relating to the reduction of greenhouse gas from land use and buildings including, but not limited to, the following”.   This would apply to Sections 3, 4, 5, 6 and 7.

Conclusions
OFVGA appreciates the opportunity to comment on this proposed Bill. The OFVGA has considerable concerns about the impact on food security, competitiveness, leakage of Ontario businesses to other jurisdictions, and specific challenges within the framework.  All policies that are brought forward must keep each of these things in mind, and should be evidenced through the provision of a specific Regulatory Impact Assessment for Ontario to have a stable, secure supply of locally produced food.

To download a PDF file of the response, please click here.

About the Ontario Fruit and Vegetable Growers’ Association (OFVGA)

OFVGA was established in 1859, which makes it one of Ontario and Canada’s oldest farm commodity organizations.  As the voice of Ontario’s fruit, vegetable and greenhouse farmers, the OFVGA is a nationally recognized not-for-profit association that advocates on behalf of Ontario fruit and vegetable farmers and the edible horticulture industry, representing its members provincially, nationally, and internationally. 

The sector supports 30,000 farm-based, non-family jobs in Ontario, as well as a further 8,700 jobs specific to horticulture and specialty crops. Over 125 different fruit and vegetable crops are grown in Ontario with an estimated annual farm gate value of $1.6 billion (2013).

CONTACTS

Dr. John Kelly, Executive Vice President
Ontario Fruit and Vegetable Growers Association
105 – 355 Elmira Road North
Guelph, Ontario.  N1K 1S5
johnkelly@ofvga.org
519 763 6160 x115

Mark Wales, Section Chair
Ontario Fruit and Vegetable Growers Association
105 – 355 Elmira Road North,
Guelph, Ontario.  N1K 1S5
walesfarm@hotmail.com
519 773 6706

Dr. Justine Taylor, Energy and Environment Co-ordinator
Ontario Greenhouse Vegetable Growers
32 Seneca Road
Leamington, Ontario. N8H 5H7
jtaylor@ontariogreenhouse.com
519 326 2604 x205

Brian Gilroy, Section Chair
Ontario Fruit and Vegetable Growers' Association
105 – 355 Elmira Road North
Guelph, Ontario.  N1K 1S5
nighthawkorch@brucetelecom.com
519 270 3032

George Gilvesy, Board Chair
Ontario Greenhouse Vegetable Growers
32 Seneca Road
Leamington, Ontario. N8H 5H7
gilvesy@ontariogreenhouse.com
519 326 2604

Jan Vanderhout, Vice-Chair
Ontario Fruit and Vegetable Growers' Association
105 – 355 Elmira Road North,

Guelph, Ontario.  N1K 1S5
jan.vanderhout67@gmail.com
905 628 2503

Katie Burt, Communications
Ontario Fruit and Vegetable Growers' Association
105 – 355 Elmira Road North

Guelph, Ontario.  N1K 1S5
communications@ofvga.org
519 763 6160 x125

Norm Charbonneau, Director
Ontario Fruit and Vegetable Growers' Association
105 – 355 Elmira Road North,

Guelph, Ontario.  N1K 1S5
norm@hiberryfarm.com
519 832 5283