Canada’s ornamental horticulture industry generates farm gate receipts of over $2.2 billion a year. This, according to a newly released report, entitled The Impact of Ornamental Horticulture on Canada’s Economy.

Deloitte and Touche, an audit, consulting financial advisory company, conducted the study at request of the Canadian Ornamental Horticulture Alliance (COHA). The report was released in January 2009. The COHA is an alliance of the Canadian Nursery Landscape Association, Flowers Canada Growers, and the Fédération Interdisciplinaire de l’Horticulture Ornementale du Québec.

Statistics in the report reveal that nearly 90 per cent of ornamental sales are distributed amongst three Canadian provinces, with Ontario taking up half of the sales numbers, while British Columbia had 24 per cent and Quebec 14 per cent, leaving the remaining 12 per cent for the rest of the country.

Data gathered showed Quebec experienced the fastest growth rate, between 2002 and 2007, at 2.9 per cent growth, while B.C. grew by 2.5 per cent and Ontario had a 1.3 increase. The industry generated 110,750 full-time jobs, while there were 22,026 jobs in industries that supply and support the sector.

Deloitte researchers stated in the report, “In addition, the sector induces a significant number of additional jobs through household spending by employees in the sector. It is estimated that for every two jobs in the sector, another job is generated in the economy.” The sector generates $3.8 billion in employment income and another $820 million in end-user taxes generated (PST and GST). GST is $315 million alone.

The report lists six reasons the study was carried out: •     Highlighting the relative importance of the ornamental horticultural sector to the Canadian economy; •     Identifying consumer trends to leverage for growth; •     Identifying channels of distribution and related impacts on sector competitiveness; •     Assessing the competitive impacts of key cost drivers; •     Assessing the sector’s utilization of water and feasibility of greater adoption of conservation strategies; and •     Assessing the role of government in contributing to greater sector efficiency, market share and profitability

In highlighting the importance of the industry, the report states, “Ornamental horticultural production is significant and represents over 40 per cent of Canada’s horticultural industry.” Floriculture is the largest sub-sector in the ornamental sector, followed by nursery, sod and Christmas tree sub-sectors. Sod and nursery sectors reported highest annual growth rates at 7.9 per cent and 4.6 per cent, respectively. Despite floriculture being the largest sub-sector, its growth has been almost flat at 0.5 per cent per year. Christmas tree sales have declined by 5.7 per cent per year.

There is some good news on the horizon for the industry. The report relates that the average retired baby boomer is expected to have eight hours of daily leisure time, which should reflect in increased sales in ornamental horticulture. “Between 2011 and 2021, 3.3 million to 6 million will be in retirement, ideally suited for gardening,” reads the report. Boomers are expected to spend $2,400 per year on garden and garden-related activities. The report calculates that should result in an estimated $5.5 billion to $10.1 billion per year on ornamental horticulture at retail level (national sales for this sector were $6.3 billion in 2007). The estimated value of ornamental products at farm gate would be $2.8 to $5 billion.

The report recommends that to effectively compete for these dollars, it is recommended that the sector target consumers with a ‘pull strategy’ which promotes the economic benefits of gardening and landscaping. Echoing many other predictions for the industry across North America, the report predicts that cocooning will return as a top consumer trend for 2009.

“Businesses and industries that are slow to bring new ideas to market are less likely to benefit from first mover advantages and risk facing more competitive markets and lower returns. This challenge is being seen by ornamental producers today,” reads the report.
Three areas are outlined to demonstrate the changing economic circumstances that will challenge the strong financial track record of Canadian ornamental horticulture. Areas of concern are labour, seed and plant expenses and utilities as the biggest cost drivers. Producer profitability decreased by four per cent in 2007, while floriculture and nursery sales increased five per cent, but costs were estimated to have grown nine per cent. “The practice of absorbing incremental cost increases is putting producers at risk. Producers need to employ strategies that help them raise prices and protect/grow margins,” reads the report.

Efficient water use

The report claims that ornamental horticulture is one of the agriculture industry’s more efficient users of water. It is estimated that the sector’s annual water usage is 187 million cubic metres per year. The report estimates this to being equivalent to about 15 per cent of water used for domestic lawns and gardens, or about four per cent of Canadian agriculture’s total water intake.

The University of Guelph provided figures that estimated that approximately 96 per cent of the sector’s water use is attributable to outdoor nursery operations. The predominant water source for floriculture greenhouses, nationally, was city water, followed by collected rain water or well water. Most nurseries use well water, followed by river or lake water users and other water source users.

“Greater adoption of water conservation strategies are feasible by using methods of watering on demand, collecting rain water and recycling water and nutrient solutions,” states the report. A number of recommendations are given to achieve more efficient water use: •     Improve knowledge and use of support programs that foster water conservation •     Federal and provincial governments should invest further in research and development related to water conservation and treatment technologies •     There is a need for additional research in the nursery sector to assess water management protocols, recycling protocols and distribution systems •     Government extension agents or specialists should work closely with research and demonstration projects related to water conservation and treatment technologies •     Producers using city water for irrigation should be prepared for alternative water sources •     In light of restricting municipal water use polices, growers should stay informed on changing consumer preferences and reflect these changes in product offerings

Future looks bright

The report concludes that Canada’s ornamental horticulture sector has a major economic impact in Canada, and significant potential to develop and expand. “As such the sector should be a target for growth by government at all levels. Interviews with government officials indicate that COHA needs to establish its credentials as the lead voice at the national level. From the research in this study, innovation is fundamental to the future of the sector,” says the report. It recommends that steering a greater proportion of agricultural industry research funding toward ornamental horticulture should be among COHA’s and both the federal and provincial level governments’ top priorities.

Policy implementation roadmap


A nine point policy implementation roadmap was suggested by the study’s authors. The recommendations are:
1.     Build in-house government relations capability
2.     Develop a manageable public policy agenda
3.     Develop a clear public policy mandate – communicate to policy makers
4.     Determine those matters of interest that are beyond COHA’s scope of influence and partner with other powerful and influential associations
5.     Coordinate consistent messaging, particularly in policy areas where the regulatory jurisdictions overlap, such as pesticides, plant protection and human resources at the provincial level
6.     Focus efforts at the bureaucratic (civil service) level rather than the political (elected representative) level
7.     Seek annual “state of the industry” briefing meetings with the respective ministers and deputy ministers responsible for agriculture in the provinces of British Columbia, Ontario and Quebec
8.     Leverage publicly available funds (i.e. CanAdvance) for the purpose of developing public policy “points of view” position papers
9.     Develop a three year government relations business and implementation plan before initiating any public policy advocacy program
For a brief outline on the report and to contact the COHA, go to www.coha-acho.ca