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Greenhouse growers face 32% cost increase

Greenhouse operators in Ontario say it's a "scary" time to be in the business of growing crops.

Some are considering the shift to cannabis production, implementing more automation or closing altogether.

They blame Ontario's recent minimum wage hike combined with the provincial cap-and-trade program, designed to reduce greenhouse gas emissions while charging those same operations.

"I don't know if there are a lot of businesses that can take that kind of tidal wave hitting them and not be substantially affected," said Joseph Sbrocchi, general manager of the Ontario Greenhouse Vegetable Growers.

Between the minimum wage increase to $14 in January, up from $11.60, and the province's cap-and-trade program, Sbrocchi estimates that's a 32 per cent increase for Ontario greenhouses to absorb in a 12-month period.

"A lot of people are going to be looking at their books and I dare to say they're going to be shocked," said Sbrocchi.

INDUSTRY HAS BECOME 'UNSTABLE'

For Gerry Mastronardi, it's now become an "unstable" industry that's "scary" as a greenhouse grower.

His Leamington greenhouse — TG & G Mastronardi — has grown tomatoes since 1987 and employs 64 people with almost all of them at the minimum wage mark.

"This is all going to go back onto the consumer," said Mastronardi. "What was the urgency? It wasn't phased in."

Right now, the only way he can balance the books is by raising prices.

That will be very little, if any, for greenhouse producers since price is driven by the open market. And Mastronardi is competing on a global scale with greenhouses in the U.S. and Mexico that aren't facing these same pressures.

FUTURE IS UNCERTAIN

"I don't know where we're going to get the extra revenue to pay for all these extra expenses," said Mastronardi. "This year will definitely be the year that will determine a lot of things."

He's decided to put a pause on any future expansion projects, especially since Ontario's minimum wage is rising again to $15/hr in 2019.

The Mastronardi operation has already implemented some automation in recent months, which may now be accelerated because of the minimum wage increase.

"We have done what we can do to date and we're going to sit on the fence right now," said Mastronardi. "We have no intentions of spending any further money until I see what happens with another year under our belt with this minimum wage."

FROM TOMATOES TO CANNABIS?

To help offset some of those costs, Mastronardi is looking at converting some of his tomato crop into cannabis, which could be more lucrative. He admits there's a lot of red tape involved with growing pot, plus the potential of a saturated market once it becomes legal.

"All of a sudden you have all this extra production, is it going to drive the market down? Are you going to be faced in the same situation," Mastronardi asks himself.

Click here to read the full article.

Photo credit: Jason Viau/CBC


04/16/2018 - CBC/Radio-Canada



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