The Survey of Innovation and Business Strategy 2012, released at the end of 2014’s first quarter, offers insight not only into trends in innovation, but also into which industries are accessing government grants and how they vary across the provinces.
I recently drew attention to the fact that in terms of government spending to support innovation, Canada as a whole is far behind, and manufacturing firms in Ontario are accessing provincial grants for R&D at half the rate of manufacturing firms in Quebec.
But Quebec’s overwhelming dominance over Ontario in providing funding for innovation is not without exception; and that exception is the food processing sector. While 38 per cent of Quebec manufacturers accessed provincial grants compared with a relatively weak 19.7 per cent of Ontario manufacturing firms, food and beverage processors in both Quebec and Ontario stood at over 40 per cent, according to the most recent data provided by Statistics Canada (Quebec =42 per cent, Ontario =41.3 per cent). And in fact across Canada, food and beverage processing firms accessed provincial grants at a rate of 38 per cent, compared with the less than 20 per cent of Canadian food and beverage processors that accessed grants from the federal government.
Canada recognizes the world is getting hungrier
In his article on Huffingtonpost.ca this past spring, “The World is Getting Hungrier,” Peter Hall, chief economist for Export Development Canada (EDC), discusses the fact that the world’s appetite is growing as incomes grow in many markets. “The rise of the emerging markets over the past three decades is now vaulting millions into the ranks of the middle class every year. China alone is graduating 40 million a year. India is somewhere between 10 and 20 million…and it is just a beginning. Indonesia, Brazil, Mexico, the Philippines, Vietnam and others are also aggressively adding to this income cohort. The significance of these graduates is their appetite.”
Middle class citizens value safe, quality foods, and for the moment none of the emerging markets mentioned above have a reputation for quality and safety like Canada. As indicated by recent efforts of Canadian food processors to increase the efficiency of their facilities, businesses in Canada are eager to seize on this opportunity.
A taste of government grants available to food and beverage processors
For those of us familiar with government funding, the favouritism towards food and beverage processors is nothing new. Bernadeen McLeod, the founder and president of an Ontario-based consulting firm, quips throughout her government funding presentation: “If I were ever to start a business outside of my own, I would definitely choose food processing – there would be no hesitation.” That’s because whether you are looking to acquire new equipment, expand your business, or perform research and development activities there is almost certainly a funding program that will relieve you of up to 75 per cent of the project costs. In fact, there is even a program offered through the Food Processing Human Resources Council that offers up to $20,000 in funding for hiring a new employee to your business.
With the announcement of a staggering three per cent of Quebec’s GDP being diverted to government spending on innovation (including funding for food and beverage processors) Ontario firms await news from the Liberal government on plans to expand funding for one of Canada’s most promising sectors.
Ryan Weaver has a BA in economics, an MSc in management, and several published works including two books. As marketing analyst at Mentor Works, Ryan enjoys communicating with business owners and executives about government grants and funding available to help overcome obstacles to growth. Contact him at firstname.lastname@example.org