Western Economic Diversification Canada
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Western Economic Diversification Canada (the department) would like to thank all of the key informants, case study participants and survey participants who generously gave of their time and knowledge to take part in the Evaluation of the Mountain Pine Beetle Program.  Without their participation and their insights, this report would not have been possible.  The evaluators also acknowledge the work done by Ference Weicker & Company in collecting key informant interview and survey data.


Western Diversification Program

The Western Diversification Program (WDP) is the department’s major program and provides support to projects that develop, strengthen and diversify the Western Canadian economy.  The WDP facilitates the department’s collaborative opportunities and responses to economic priorities.1

As an umbrella program authority, the WDP has a number of sub-components operating under its authority.  Both the Community Economic Diversification Initiative (CEDI) and the Airport Improvements Initiative (AII), using the existing WDP authority, were intended to support economic development and infrastructure projects in British Columbia communities affected by the mountain pine beetle infestation.  These two initiatives offered the federal government the opportunity to provide economic options to affected communities, some of which derived over half of their income base from the forest industry.  

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Federal Mountain Pine Beetle Program

The mountain pine beetle epidemic decimating British Columbia’s pine timber stands began in the mid-1990’s and has since grown to one of the largest insect infestations on record in North America.  The massive timber depletion caused by the infestation has devastated British Columbia’s forest industry and forest-dependent rural communities; the social and economic upheaval will be felt for decades. In 2007, the federal government announced the $200 million Federal Mountain Pine Beetle (MPB) Program designed to address both the short-term and long-term impacts of the beetle infestation. 

The Federal Mountain Pine Beetle Program, lead by Natural Resources Canada, comprised three key components delivered by different federal departments:  1) communities: targeting long term economic impacts affecting communities 5 to 8 years in the future.  Delivered by Western Economic Diversification; 2) infrastructure. Delivered by Transport Canada; and 3) forests: targeting short-term biological impacts affecting forests and trees.  Delivered by Natural Resources Canada.  The $200M in funding was allocated as follows:

  • Natural Resources Canada $100M;
  • Transport Canada $44M; and
  • Western Economic Diversification Canada $56M.

The $56M allotted to Western Economic Diversification was divided between the Community Economic Diversification Initiative ($36.6M) and the Airport Improvements Initiative ($19.4M).

Funding for the Community Economic Diversification Initiative (CEDI) and the Airport Improvements Initiative (AII) was approved in March 2007 with the Minister of Western Economic Diversification accountable for delivering the initiatives.  At that time, the department identified the risk that the tight timelines could require re-profiling of unused funds into 2008-09 and 2009-10 as outlined in Table 1.1.  In November 2009, the program’s end date was extended to March 31, 2011 and $7.74M reprofiled from 2009-2010 to 2010-2011.

Community Economic Diversification Initiative and Airport Improvements Initiative

Table 1.1 summarizes initial and proposed reprofiling of Grants and Contributions (G&C) funding for the Community Economic Diversification Initiative and the Airport Improvements Initiative.

Table 1.1 Grants and Contributions for the Community Diversification Initiative and the Airport Improvements Initiative
($ millions) 2007/08 2008/09 2009/10 Total
Community Economic Diversification Initiative (CEDI)*
Initial G&C
(reprofiled G&C)
Airport Improvements Initiative (AII)**
Prince George initial G&C
(reprofiled G&C)
Kamloops initial G&C
(reprofiled G&C)
Kelowna  initial G&C
(reprofiled G&C)
TOTAL  initial G&C
(reprofiled G&C)
*the total budget of $36.6M for CEDI included $3.48M for management costs including operating costs and a Public Works and Government Services Canada accommodation charge of 13% of salaries
**the total budget of $19.4M for AII included an additional $1.05M for operating costs.

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CEDI was to be guided by the Mountain Pine Beetle Ministerial Council composed of the BC Minister of Forests and Range, the Natural Resources Canada Minister and the Western Economic Diversification Minister and supported by a senior-level Canada-BC Steering Committee.  The Mountain Pine Beetle Ministerial Council appointed an advisory board of interested parties from academia, First Nations, industry and the community.  The Minister of Western Economic Diversification was to advise the Mountain Pine Beetle Ministerial Council on the Airport Improvements Initiative. 

Community Economic Diversification Initiative

The Community Economic Diversification Initiative was initially a two year $36.6M federal contribution program addressing long term impacts of the mountain pine beetle on approximately 180 forest-dependent communities in British Columbia.  CEDI funding eligibility was based on three sets of criteria: 

  • applicant criteria: eligible applicants comprise a range of legal entities including non-profit organizations, community and sector associations, local governments, small business ventures, Aboriginal groups and regional alliances.
  • community criteria: eligible communities must be located in one of two “immediate risk” provincial zones2.  Among eligible communities, additional priority was given to those that were:  Aboriginal; located in zone 2, which was targeted to receive at least 70% of the funding; forest-dependent; experiencing negative community impacts resulting from the mountain pine beetle. 
  • project criteria:  funded projects were to address one of four programming objectives: community capacity building, economic diversification, economic infrastructure or value-added forestry. 

Not-for-profit organizations were eligible for non-repayable funding; small and medium sized enterprises proposing for-profit projects involving innovative forest and value-added wood were eligible for unconditionally repayable contributions. 

According to the department’s project database (as of July 2010), 144 projects (104 clients) were approved and proceeding: 61 projects (42%) were complete and 83 were ongoing and scheduled to end by March 31, 2011..  Per project, committed departmental assistance ranged from a low of $5,117  to a high of $2.12M with half the projects being under $121,000. 

The department delivered the Community Economic Diversification Initiative in partnership with 19 Community Futures Organizations and other community stakeholders.  Based on the Softwood Industry Community Economic Adjustment Initiative, a pre-launch effort promoted the program and prepared potential proponents for the request for proposal process.  Approximately 100 (56%) of the 180 affected communities were First Nations, prompting the department’s development of the “Aboriginal Engagement Strategy” to facilitate Aboriginal uptake and proposal development.  The two-step application process included an initial request for expressions of interest followed by a request for proposals from applicants submitting the top-ranked expressions of interest.   The department ranked the expressions of interest according to proponent eligibility, location, partnership, benefit, viability, timing and concurrence with Treasury Board conditions for the program.  A dedicated departmental team in the department’s Vancouver office assumed delivery responsibilities including: extensive support for proposal development, environmental assessment reviews, Aboriginal consultations and compliance with the official languages act. The team and funding partners developed a list of alternative funding sources (a “Pathfinding Resource”) to assist proponents not funded under CEDI.  Projects that addressed the objectives of both CEDI and the Pine Beetle Recovery Program (Northern Development Initiative Trust3) were invited to submit a common application to both Western Economic Diversification and the Northern Development Initiative Trust. 

The Initiative operated within tight timelines, allowing six weeks for the Expressions of Interest phase  (September 7 to October 19 of 2007).  Expressions of Interest were evaluated against a pre-established set of assessment criteria.  By November 26, 2007, the top ranked Expression of Interest applicants were invited to develop a more detailed proposal.  The proposal submission deadline was December 17, 2007.  Many projects were incomplete as of the initial deadline for project completion (March 2009), prompting two deadline extensions to March 2010 and then to March 2011.

The department implemented special intake, review and approval processes to handle the very large volume of CEDI applications received. There was an electronic application process at the intake stage, a dedicated Unit to undertake support for project development and due diligence at the review stage, and a batching system to group applications for ministerial approval. 

Airport Improvements Initiative

Recognizing that airport improvements represent an early and immediate opportunity to stimulate development and growth across large numbers of impacted communities, the two-year Airport Improvements Initiative funded three airport expansions: Prince George ($11.3M), Kamloops ($6.6M) and Kelowna ($1.5M). Operating funds for delivery costs were also funded under this initiative.  The province of British Columbia had targeted the three airports for infrastructure funding under its Transportation Partnerships Program and agreed to match the federal funding for two of the airport expansions (Prince George and Kelowna) and contributed $4M towards the Kamloops airport expansion.   Although at least ten BC local and regional airports were seeking funds at the time the initiative began, only airports located in and adjacent to affected regions were eligible under this program.

Prince George Airport:  located within Prince George timber supply area where some communities derive up to half their income base from forestry.  The airport first obtained departmental funding in 2004 under the Softwood Industry and Community Economic Adjustment Initiative (SICEA) to expand its terminal building and was again successful in obtaining an additional $11.3M under the Mountain Pine Beetle Initiative, announced in January 2007.  The $11.3M would fund an expansion of the airport runway, purchase of a snow-clearing vehicle, re-construction of taxiway/ apron and other improvements such as lighting and the navigational system. The project was scheduled to begin in September 2007.  Upgrades were expected to increase international air cargo and fuel stops.  Prince George would become a competitive fuel stop and air cargo option to Anchorage for trans-pacific air traffic between North America and Asia.

Kamloops Airport:  located within Kamloops timber supply area where many communities rely on forestry for 10% to 20% of their income base.  The proposed airport expansion included a runway extension, taxiway/apron expansion, renovations to the air terminal building and improved navigational aids.  The upgrades were expected to support transcontinental charter operations, making Kamloops an international all-season ski and golf destination. Construction start was scheduled for December 2007 but was delayed to spring 2008 while the Kamloops Airport Authority completed the Environmental Impact Assessment. 

Kelowna Airport:  located within the Okanagan timber supply area where communities rely on forestry for between 10% and 30% of their income base.  The proposed airport expansion included a runway extension, improvements to navigational aids and a doubling of existing facilities, making Kelowna an international ski tourist destination for Europeans. The upgrades were expected to increase tourism.  While one local First Nations band strongly endorsed the project, the project was not supported by the Okanagan Indian Band and a Justice Canada review concluded contractual obligations and mitigation measures assumed by the Kelowna Airport reasonably addressed the issues identified by the Okanagan Indian Band.  An official groundbreaking ceremony occurred in February 2008. 

According to the department’s project database (as of July 2010), the Kelowna Airport project is complete, final claim has been approved on the Prince George Airport and first claim has been approved for the Kamloops Airport.    

Evaluation Mandate

Using the existing WDP authority, the Community Economic Diversification Initiative and the Airport Improvements Initiative will be evaluated based on the Performance Measurement Framework of the WDP. The evaluation will focus on the degree to which projects achieved their intended objectives and contributed to the development and diversification of the Western Canadian economy. The 144 projects funded under the Community Economic Diversification Initiative and the three airports funded under the Airport Improvements Initiative were examined as part of the evaluation. The CEDI and AII evaluation covers the fiscal years 2007-08 to 2009-10.

CEDI and AII are one-time initiatives that are not being renewed. Therefore, the evaluation will address the performance and the past/current, rather than ongoing, relevance of the programs. 

Evaluation Scope and Objectives

The 2009 Treasury Board Policy on Evaluation requires departments develop a five-year evaluation plan to cover 100% of program spending over a five-year period. The Community Economic Diversification Initiative and the Airport Improvements Initiative were evaluated in the context of the department’s approved Five-Year Evaluation Plan (2009-14). This evaluation of the Community Economic Diversification Initiative and the Airport Improvements Initiative included various data collection methods outlined below. The objectives of the evaluation and the core evaluation issues are presented in Table 1.2.

Table 1.2 Core Evaluation Issues for the Community Economic Diversification Initiative and the Airport Improvements Initiative
Evaluation Issues
  1. Is there a continued need for the Initiatives?
  2. Are the Initiatives aligned to departmental and federal government priorities?
  3. Are the Initiatives consistent with federal roles and responsibilities?
Achievement of Expected Outcomes

Strategic Outcome
In what manner and to what extent have the Initiatives developed and diversified the western Canadian economy?
Measuring Success

  1. To what extent did projects achieve their performance targets?
  2. To what extent have the Initiatives achieved their intended outcomes?
  3. What factors facilitated or impeded the achievement of Initiative outcomes?
  4. Were the Initiative designs appropriate for achieving the expected results?

Unexpected Outcomes

5. Were there unexpected positive and/or negative outcomes from the Initiative activities?

Demonstration of  Efficiency and Economy
  1. Were the Initiatives achieving intended outcomes in the most economical manner?
  2. Were the Initiatives undertaking activities and delivering products in the most efficient manner?


[1] Western Economic Diversification Canada (n.d.) Western Diversification Program. http://www.wd.gc.ca/eng/301.asp

[2] Zones were defined by timber supply areas (TSAs): “integrated resource management units established in accordance with Section 6 of the Forest Act” (http://archive.ilmb.gov.bc.ca/slrp/datamanagement/glossary/T.HTM).
Zone 1: timber supply areas of MacKenzie, Dawson Creek, Bulkley and all BC timber supply areas to the west and south of zone 2.
Zone 2:  timber supply areas of 100 Mile House, Kamloops, Williams Lake, Quesnel, Prince George, Lakes, Morice.

[3] “The Northern Development Initiative Trust was established in 2004 as an economic development funding corporation for central and northern British Columbia.  The trust operates independently of government and provides funding and support for new opportunities for stimulating economic growth and job creation.”  Source:   A Review of Rural and Regional Development Policies and Programs.  Canadian Policy Research Networks, March 2008, page 55-56.
Investments under The Pine Beetle Recovery Program of the Northern Development Initiative Trust would ‘result in new jobs and investment, revenues and/or exports with special focus on the mid term period of anticipated timber harvesting reductions”.  Funding was restricted to “public’ applicants (local government, First Nations, non-profit society).  Source:  Community Economic Diversification Initiative documentation binder, Section 1.3, page 4.