Cherry tomatoes traveling down the production line at the Heritage Farms location in Staples, Ont., on July 21.Kati Panasiuk/The Globe and Mail
Bins filled with cherry tomatoes travel down a sleek concrete hallway wider than a soccer pitch. They move autonomously, tracing a magnetic railroad hidden under the ground.
The hallway cuts through a 90-acre greenhouse that contains hundreds of rows of grape tomatoes.
Eventually, the bins arrive at a sorting station where the contents are poured onto a long conveyer belt. The tiny tomatoes – red, yellow and green – are scanned by cameras that detect imperfections. Those that pass the test enter a complex assembly line where they are packaged, labelled, stacked, wrapped and shipped to supermarkets across the United States, Canada and Japan. The tomatoes go from the vine to the delivery truck within hours, often only touched by a human hand when first plucked.
This is Heritage Farms, a greenhouse in Leamington, Ont., an agricultural town about 45 minutes outside Windsor. Leamington is part of Essex County, the centre of North America’s largest concentration of greenhouses: 135 businesses spanning 1,300 hectares. At least that’s the size right now. The hub is on the cusp of expanding a further 50 per cent in the next decade.
However, one key constraint is limiting growth: infrastructure.
Greenhouses need water for complex drip irrigation systems, and Essex County’s water supply is at capacity. They also need natural gas for heating and electricity for supplemental lighting during the winter – two areas with skyrocketing costs. After seven years of growth, Ontario greenhouse hectares dedicated to peppers, cucumbers and tomatoes have seen a net-zero gain in the past 18 months.
Some companies say they are now eyeing expansion to the U.S., where states are courting them with investments in infrastructure and handing out perks such as tax subsidies and cheaper electricity.
“The investment into agriculture is going to happen, whether or not we have the infrastructure here,” said Richard Lee, executive director of the Ontario Greenhouse Vegetable Growers. “If we don’t, it will go south of the border.”
U.S. incentives have won businesses over before. In 2019, Heritage Farm’s parent company, One Floral, expanded a 10-acre greenhouse into 16 hectares in North Carolina. Now, One Floral is looking to grow its Heritage Farm operation – and while it has bought an extra 73 hectares in Essex County, the company is thinking of investing in the U.S. instead.
A greenhouse employee walks through the Vine Fresh Acres site, in Ruthven, Ont., completing duties while on shift on July 21.Kati Panasiuk/The Globe and Mail
“This is where the market should be,” said Jamie Lefaive, general manager at Heritage Farms. “But at the same time, if you can’t make profits to continue to support your business and grow, you have to find alternatives.”
Mr. Lee and Essex County’s other greenhouse growers are left questioning why a cutting-edge industry is not getting the same government support as other businesses, such as the Stellantis electric vehicle plant located in Windsor.
“There’s been a significant push to move more towards EV vehicle plants,” Mr. Lee said. “We do need people to have good paying jobs. But we need people to eat as well.”
Essex County, which is four hours southwest of Toronto on the shores of Lake Erie, is perfect for greenhouses. Nicknamed the “sun parlour,” it is on the same latitude as California and receives a heady amount of sunlight year around. Still, it is cooler than the southern U.S. in the summer and warmer than areas north in the winter. This saves on heating and cooling costs.
The area is also a hub for highly specialized industries that focus on the fertilizer and biologicals (pest-controlling bugs) that greenhouses need to function.
With six to seven per cent growth since 2016, greenhouse growers of peppers, cucumbers and tomatoes have a farmgate value of more than $1.3-billion, producing 503 million kilograms of produce annually, or the equivalent of 300 truckloads daily.
The farms do this with high-tech manufacturing.
Every condition in the Heritage Farm greenhouse is controlled to maximize yields. Infrared thermal cameras measure leaf temperature, collecting data that are plugged into artificial intelligence software that can adjust vents, shade screens, heating pipes and misting levels. This helps to decrease inputs while boosting yields: Ontario greenhouse growers can yield up to 15 times more produce per square metre than outdoor agriculture.
“In greenhouses, efficiency is everything,” Mr. Lefaive said.
Greenhouse employees tend to the vine plants at the Vine Fresh Acres site to maintain the overall health of the cucumbers in Ruthven, Ont., on July 21.Kati Panasiuk/The Globe and Mail
Companies are ready to pour money into the sector, boosting the industry a further five per cent every year for the next 10 years, according to an internal report conducted by the Ontario Greenhouse Vegetable Growers. But producing 20 times more food than traditional agriculture requires inputs: natural gas for heating and electricity for supplemental lighting.
Natural gas prices have doubled in price since 2016. In Ontario, electricity prices have been steadily rising since 2006. The future of power in the province is also uncertain. Increasing demand on the system could strain the entire grid as early as 2026 and even trigger chronic shortages by 2030, according to an analysis of the entire energy system published by RBC.
“But it’s just one piece of the puzzle,” Mr. Lee said. “You still need water to make sure you can feed the plants.”
And therein lies another problem.
Heritage Farms, alongside approximately 135 other greenhouses, uses the Essex County Union Water Supply System for irrigation. This system draws from Lake Erie and feeds the residential, commercial and industrial needs for four surrounding municipalities. But growth in the greenhouse sector has caused unexpected strain: Demands increased 33 per cent between 2015 and 2020 – with about 20 per cent of the increase coming from 2018 to 2021.
As a response to these capacity limitations, in March, 2021, UWSS put a moratorium on any new, large-service water applications. (Union Water did not respond to requests for an interview.)
Leamington and UWSS are researching ways to expand distribution and increase capacity, according to Hilda MacDonald, the municipality’s mayor. But this will take time and cost millions, a significant bill for a community of 30,000.
“It’ll boil down to a price tag. How much will this cost and who is going to pay?” she said.
The mayor said Essex County has mixed feelings about the greenhouse sector – the sudden expansion of which came as a surprise. On one hand, it is a growing source of revenue and jobs. On the other, the community has struggled to come to terms with changes, such as an influx of 10,000 workers.
Jamie Lefaive explains the operations of the robotics in the production plant of the Heritage Farms site in Staples, Ont., on July 21.Kati Panasiuk/The Globe and Mail
Light pollution that turns the sky into a violet or turquoise is also an issue. In June, 2022, Leamington Council passed a bylaw forcing greenhouses to either turn off their lights at night or install curtains. Between November and February, bylaw officers laid 88 charges upon 12 owners for infractions.
The tension between greenhouses and the community is expressed on the Facebook page South Essex Greenhouse Oversight Group, where local residents raise concerns about the sector exploiting migrant labour and reducing house values.
“We’re experiencing things that we’ve never had to experience in the 150 years Leamington has been in existence,” Ms. MacDonald said.
There are also questions about whether controlled environment agriculture is better for the environment than traditional, outdoor methods. There is no broad consensus, and the carbon footprint is largely dependent on the operation. From a positive standpoint, in a greenhouse water is recycled and pesticide and fertilizer usage lower. However, greenhouses require more power because of lighting demands.
For Mr. Lefaive, one thing is clear: The failure of Essex County to keep up with the expanding sector will come at a cost.
“If they’re taking three years to do it, the opportunities are already gone by then. Somebody has already moved to the U.S.”
Greenhouses are working with the province and municipality in innovative ways to curtail dependence on the electricity grid and reduce gas prices. Under Sun Acres, also in Essex County, is one of several producers in Ontario that have installed a cogeneration engine. This equipment turns natural gas into electricity – which the growers sell back to the grid during peak times – while producing heat and CO2, both of which are pumped into the greenhouse to help the plants grow. However, the engines cannot produce the power needed to run the greenhouses 24 hours a day, year-round.
Jamie Lefaive talks with The Globe and Mail reporter Kate Helmore at the Heritage Farms production plant.Kati Panasiuk'/The Globe and Mail
On the water front, other technological improvements, such as closed-loop irrigation systems, have led to an overall 40-per-cent decrease in demand on Union Water, according to the utility’s minutes from spring 2021. Producers are also drawing during non-peak times, drilling wells, using non-potable private sources of water and even capturing rain runoff from rooftops, Ms. MacDonald said.
“The industry is innovative,” she said. “... My expectation is that those things will continue.”
But this is not an expectation placed on producers in some U.S. states.
One Floral was offered significant tax reductions for consecutive years by North Carolina, plus unlimited access to water and cheap energy. Its utility costs in North Carolina are significantly below those for the greenhouse in Leamington, Mr. Lefaive said.
According to Mr. Lee, other producers have received similar incentives from states such as Ohio, New York and Georgia.
Over all, the U.S. is better set up to support agriculture, said Ron Lemaire, president of the Canadian Produce Marketing Association.
For example, he said, state electricity grids often have discounted rates for growers, whereas Quebec is the only province that has an energy rate set aside for the agricultural sector.
Mr. Lemaire also pointed to the U.S. Department Agriculture’s farm loan program, which gives operating loans to farmers who cannot obtain commercial credit from a bank or other lender. The money can be used to purchase land, equipment or supplies and to construct buildings or make improvements.
Cherry tomatoes grown on the vine at the Heritage Farms site in Staples.Kati Panasiuk/The Globe and Mail
U.S. municipalities will also help businesses with the costs of building roads and putting in natural gas lines. In Ontario, producers are mandated to build and pave the roads that lead to their property, without financial assistance, Mr. Lemaire said.
“Agriculture seems to be the last area of focus in many budgets, provincial or federal, especially in the fruit and vegetable side,” he said. “We are probably one of the most vital industries in the country relative to ensuring we put healthy foods on the market, yet we’re often seen as an afterthought.”
Back at Heritage Farms, Mr. Lefaive will continue to produce tomatoes, streamlining technology that produces food more efficiently than ever before.
To him, it makes sense that Essex County would become the North American hub of greenhouses: The sunlight, temperature, abundance of land and concentration of agricultural specialization is a perfect storm.
He just hopes that it doesn’t miss the chance.
“All the specialty things are readily available here in Leamington. You’re basically wasting the opportunity by not being ready for expansion.”
From left, CFO Jarod Hall, Globe and Mail reporter Kate Helmore, grower Jake Knelson and Ontario Greenhouse Vegetable Growers Executive Director Richard Lee, walk in Vine Fresh Acres greenhouse discussing growing operations in Ruthven, Ont., on July 21.Kati Panasiuk/The Globe and Mail
Editor’s note: An earlier version of this story included Windsor in the headline. This has been updated to Southern Ontario.