Economic Contribution - Northeastern Ontario's Equine Industry

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Economic Contribution

Three Community Futures Development Corporations (CFDC’s) from Northeast Ontario decided to commission this study to attempt to answer the question of the importance of the equine (or horse) industry to the region: South Temiskaming Community Futures Development Corporation, serving the region around the community of Temiskaming Shores; NECO Community Futures Development Corporation, the CFDC serving the North Bay/east Nipissing region; and, Economic Partners Sudbury East/West Nipissing Inc., serving the area of East Sudbury and West Nipissing. FedNor saw the merit of examining a “hidden” sector and agreed to provide funding to carry out the study.

The Equine Industry directly contributes $70 million annually to the economy of Northeast Ontario – based on an estimated 14,000 horses in the region

The results of the study are the following:

The equine economy is indeed very important to Northeast Ontario, generating an annual direct economic contribution of $70 million. This makes is about 10 to 15 times larger than the maple syrup industry, although only about 5% of the forest industry in Northeast Ontario. Another way of representing the contribution is that the horse industry is equivalent to the economic impact of Nipissing University on the North Bay/Nipissing region or the equivalent of the 2003 Canada Winter Games on the economy of New Brunswick. If the indirect and induced economic impact is added, the total is a contribution of $105 million.

The estimate of this impact is based upon methodologies and average ratios applied in a number of previous studies in the United States and Canada. The most recent of these studies, published in the autumn of 2005, is The Economic Impact of the Horse Industry on the United States, commissioned by the American Horse Council Foundation (AHCF). The horse industry contributes approximately US$ 39 billion in direct impacts to the U.S. economy on an annual basis.

The industry in Northeast Ontario reflects an estimated 14,000 horses in communities throughout the region from Muskoka to Hearst. The most important sector is the Recreational segment involving nearly 6,000 horses (those riders that love their horses but don’t compete in shows). This is followed by 4,000 horses dedicated to the Showing segment (those horses and riders that participate in shows on a regular basis). The racing segment includes about 1,300 horses and a further 2,600 horses are classified as “other” (foals, horses still used for work etc.). The number of draft horses – estimated by some at 4,500 in the Northeast – is reflected in all of the categories except racing.

Estimating the number of horses in Northeast Ontario has not been an easy task. We have derived the estimate from earlier studies completed in Canada: the 1996 study of Dr. Robert Wright of OMAFRA (updated in August, 2005), the 2003 Canadian Equine Industry Profile Study, the 1998 National Horse Study of Agriculture and Agri-Food Canada and the 2001 study of Dr. Atif Kubursi on the economic impacts of racing and breeding in Ontario.

Many industries in Northeast Ontario that supply goods and services to the equine sector benefit from the impact. The exhibit below indicates the spending by categories.

Opportunities for growth exist

Up to the present, few people have recognized the economic contribution that the equine economy makes to Northeast Ontario – or, indeed, to the whole of Ontario.

The horse industry is often thought of as being part of the agricultural sector, and as such, expenditures relating to horses at feed, farm and equipment stores throughout Northeast Ontario contribute to supporting the viability of such suppliers for the agricultural sector as a whole. However, the industry goes beyond the agricultural sector as many horses are not kept on farms and many riding stables and race tracks are not part of farm operations – catering to a recreational, sports and tourism market.

The industry is relatively small compared to the large resource industries, such as forest products (2% to 3% of the size) but it is certainly in the category of developing industries that are built around the resource base (substantially larger than the maple syrup industry).

Across Canada we know that the number of horses is growing and that Ontario is likely at the head of the list. We also know that, in Ontario, the equine industry is much more predominant in the south than it is in the north (riding stables, breeding, racing etc.). However, we also have anecdotal evidence that the equine sector is growing in Northeast Ontario, as we have seen several new modern riding stables established in the last few years and the development of new breeding operations.

Northeast Ontario also has a number of local riding clubs and equine associations. All are active but could definitely use more help in moving their agendas forward. So far, in Ontario, and indeed across Canada we have not yet reached the stage where governments fully recognize the importance of the industry and its potential for growth – certainly not when compared to most countries in Europe, Australia and United States.

Click here for a copy of the full Economic Contribution Report

Click here to see the recommendations for the Northeast Ontario Equine Industry based on the report