CAN: How to off-set higher labour operating costs

Let’s start with the good news first: total sales from Canada’s greenhouse fruit and vegetable sector increased by 5.0% to $1.6 billion in 2019, continuing a trend of increases that began in 2013. The leading provinces were Ontario at (65.0%), followed by British Columbia (19.2%), Quebec (9.3%) and Alberta (5.4%). Total sales also increased, in Canada’s flower and plant sector, with an increase of 0.7% to $1.6 billion in 20191.

by Tom Brown

Now the bad news: Although sales were up, greenhouse operating expenses have increased as well. In 2019, operating expenses increased by 1.6% to $2.7 billion. The increase was mainly a result of higher labour costs. Although the number of employees decreased from 2018, payroll expenses increased by 4.1% to $787.8 million. Canada's Agriculture Sector Labour Market Forecast to 2025 report, has identified the greenhouse, nursery, and floriculture’ industry to continue to have the largest labour gap: with 27,000 more jobs than available domestic workers by 20252. A shortage of supply usually leads to higher costs, in this case, in the form of higher wages that may need to be paid by the greenhouse owner to help fill their labour gap.

The opportunity
Since Energy is typically the second-largest operating expense for a greenhouse owner and energy is a controllable expense, developing an effective energy management strategy is a perfect opportunity to help reduce the impact of higher labour costs on your greenhouse operation and to improve cashflow. Managing energy more efficiently will also help greenhouse owners to reduce the impact of higher carbon-related costs that are looming on the horizon. Setting a baseline, by capturing all of the key information from your utility billing, is the first step in developing a plan to protect your cash flow now and in the future.

Need help?
"At 360 Energy, we can help you to optimize your energy use without impacting production. Contact us today to learn about the tools and guidance we can provide to your business."

For more information:
360 Energy
www.360energy.net 


References:

1 https://www150.statcan.gc.ca/n1/daily-quotidien/200506/dq200506a-eng.htm                               

2 https://cahrc-ccrha.ca/sites/default/files/factsheet_NAT_E.pdf


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