The federal and Ontario governments are giving hundreds of thousands of dollars to profitable international conglomerates under a subsidy program meant to help Canadian food and drink makers. It’s part of the Ontario Liberals’ effort to make the province competitive, to keep jobs here and make more.
The recipients include U.S.-based Cargill, Belgium’s AB InBev, Italy’s Parmalat, Japan’s Sapporo beer company and a French company that bought a Windsor rice-processing factory two years ago that it now apparently doesn’t know what to do with.
All the grants are for Ontario facilities that employ Ontarians, which is what makes them eligible for some of the $11.7 million the governments are giving out this year under a joint subsidy program they call Growing Forward. They announced the funding, for 223 projects, at Beau’s Brewing Co. in Vankleek Hill the other day, because it’s the perfect poster child for this thing in a way a Cargill meat-packing plant isn’t.
Beau’s is getting $97,000 for a new bottling line. Or actually, in a detail the actual announcement fudged, it’s already got the money and installed the line.
Whether it’s a good idea to hand public money to private companies so they can make more money is something we could argue about — if it’s really a good investment, maybe the money should come from a bank or family investors or a new partner. But if there’s money to be made and jobs to be gained and stuff to be sold abroad and all an Ontario company needs is a little help to do it, well, at least that’s an understandable purpose for these grants. To be fair, that’s most of them.
Many are for working toward meeting standards to export to the United States or Europe. Many more are to buy machines to replace manual processes — washing things, cutting them up, packaging — with automated ones for efficiency or just to increase production. The Beau’s grant is like that. So is the one grant coming to a company in Ottawa proper, New Edinburgh’s Kimicha tea company, which is getting nearly $22,000 for a machine that puts tea into teabags.
Some are of less obvious value.
There’s $100,000 for Mississauga’s CT Bakery. It makes thaw-and-serve doughnuts and brownies and whatnot, the kind of guilty snack you can buy by the cash at a gas station; they’re installing a new doughnut line. There’s another $100,000 for Toronto’s Commercial Bakeries Corp., which makes generic cookies for other companies to put their brands on (ones that look like Oreos, ginger snaps, that sort of thing); they’re installing a new oven. To produce junk food more efficiently.
Toronto’s Griffith Laboratories, which makes food additives and helps customers devise industrial-scale recipes, “will develop a family of creative crumb coating products using an innovative process that eliminates gluten to meet industry gluten-free standards,” with the help of $110,000.
Griffith Laboratories is also getting $13,500 to “complete leadership training to help enhance management and leadership skills.” Chatham-Kent’s Giffin Grain is getting $7,500 to “complete an analysis of business trends.” Bussiere Sausage in Cochrane is getting $3,300 to “develop a business plan,” after 30 years in business.
We’re giving the Oxley Estate Winery, a family operation near Lake Erie that’s less than six years old, $15,000 to develop a succession plan. Schinkel’s Legacy, a family meat company in Chatham-Kent, is getting $7,000 for the same thing, and a family sheep-cheese operation in Wellington County is getting $3,500 for it. To figure out how to pass on the family business.
Another winery, Coffin Ridge Boutique Winery near Georgian Bay, is getting $5,500 to “complete an analysis of human resource practices and financial position.” OK.
Then there’s the big money for big companies. The governments gave Cargill $100,000 for a project in Wellington County, where it operates two meat-processing plants, which “will mitigate the risks associated with erosion and runoff to a nearby river by installing a drainage system, laying asphalt and regrading land for a 12-hectare catchment area.”
The Minnesota-based Cargill empire reported revenues equal to about $140 billion Cdn last year, which is more than the Ontario government did. It also turned a profit, which the Ontario government didn’t. Blood and guts are a serious concern at a meat-packing plant, and $100,000 probably won’t go far in a project of this magnitude, but you’d think the risks of runoff into a river would be their problem.
AB InBev, which owns Labatt, is getting grants totalling $176,000 for an energy audit at its London brewery, plus a new refrigerating system and a “properly sized” air dryer. The Belgian company made $8.5 billion US in profit last year.
Italy’s Parmalat is getting $191,000 for a new cream cheese machine in Toronto and efficiency upgrades at a plant in Belleville; it made 146 million euros in profit last year.
Sapporo, which owns Sleeman, is getting $36,000 to install sinks at its Guelph brewery so people can wash their hands and not contaminate their products. Really, that’s what it says on the list. Plus another $1,900 to “complete training for key stakeholders on a food safety program following British Retail Consortium global food safety standard.”
And then there’s the rice factory in Windsor, apparently the only rice-processing facility in Canada, operating under the name Dainty Foods. It sold out to the French rice company Marbour Group in 2015. Marbour is privately held so it doesn’t report financials, though it’s been on an expansion kick lately.
Now Marbour is getting four grants, totalling $112,000, to:
“assess organization value as well as identify and assess strategic options for business growth,”
“conduct market research and assessments, through interviews with customers and sales channels,”
“complete market development planning, an in-depth analysis of the retail trade spending in Canada, consumer research of brands recognition, cost allocation analysis, and identifying specific opportunities to improve profitability and enhance stakeholder value, both short and longer term,” and
“develop a marketing strategy to refocus current resources in markets and categories to prevent further margin erosion and increase market share.”
Marbour might have done some of this work before buying the Dainty Foods mill, or asked whether Dainty had.
If the money’s just sitting there, waiting to be given out, we can’t fault the companies for asking for it. We can, though, wonder just how much care the provincial and federal governments are taking when they decide they’re going to goose private businesses with our cash.
By the numbers:
$11.7 million in total grants
223 projects
8 projects in Eastern Ontario (if your Eastern Ontario includes Cobourg, Bobcaygeon and Haliburton)
$469,000 in grants to Eastern Ontario recipients
dreevely@postmedia.com
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