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Community Economic Diversification Initiative

Relevance

Need for Program

The communities targeted by CEDI were highly forest-dependent and felt their well-being was significantly threatened by the mountain pine beetle.  A study, published in January 2007, assessed vulnerability in four rural BC communities; vulnerability was defined as susceptibility and ability to adapt/cope with the mountain pine beetle threat.  The study concluded that the high level of “risk awareness” in the communities created a potential and readiness for institutional change and political action.4 This readiness for action was echoed by first nations communities in the First Nations Mountain Pine Beetle Impact Assessment (2006) involving 99 bands representing 58,682 people:  31% of survey participants identified economic development, training and employment as priorities in their communities.  Many affected communities, being small, rural, Aboriginal and forest-dependent, lacked the capacity and tax base to address a complex and lasting problem like the mountain pine beetle infestation.  Furthermore, the department and the Community Futures Organizations’ staff noted that some CEDI-funded proponents were seeking additional funding for follow-on projects, indicating there was and continues to be a need for CEDI. In fact, focus group participants felt that one-time initiatives like the CEDI and the AII should be coordinated with other programs so that the affected communities were funded from the CEDI/AII for the first phase of the projects with subsequent funding coming from other sources.  Key informants who questioned the need for the CEDI/AII acknowledged the need for funding and support in the affected communities but indicated that the CEDI/AII was designed and delivered under pressure and may not have been the best approach to addressing the needs of the affected communities in a meaningful and lasting way.

The CEDI/AII complemented other government and private sector programs. The department used several approaches to minimize funding duplication and maximize leverage opportunities: 1) representatives from other relevant funding sources were briefed at a funders’ table organized during the launch phase of the CEDI; 2) Expression of Interest screening criteria assessed whether or not each proposed project could obtain funding from a different source; 3)  departmental and Community Futures Organizations’ staff referred project proponents to alternate funding sources.

The program filled a funding gap not addressed by other funders.  Twenty-seven percent of projects were developed in response to availability of CEDI funding and another 21 projects were completed earlier because of CEDI funding.  Most project proponent respondents said there was a 25% or less likelihood that their project would have gone ahead without assistance from the department (82%) and they were unaware of other funding programs, although a few cited programs such as the Northern Development Initiative Trust, Community Futures and various beetle coalitions groups. Almost half of the respondents (49%) of non-funded projects reported that their projects were no longer pursued, cancelled, or suspended and felt that the CEDI/AII complemented the other available funding programs particularly via non-financial support and assistance. The case studies support the finding that CEDI/AII funds were moderately to highly incremental. Of the eight case study projects, four were found to be totally incremental (that is, the project would not have proceeded in the absence of CEDI/AII) and four of the projects would likely have proceeded, but only after a delay or with a reduced scope (partially incremental).  The comparator communities examined in the outcome assessment were somewhat successful in procuring alternative funding; the comparator communities that did not obtain other funding did not place a high priority on the project.

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Alignment with Departmental and Federal government priorities

The initiative’s objectives supported the department’s strategic outcome at the time, Community Economic Development, and aligned with the economic focus of the department’s mandate.  The initiative’s activities and outcomes align with the federal priority of Strong Economic Growth.

The majority of departmental and Community Futures Organizations’ staff reported that CEDI was consistent with departmental priorities as well as priorities of the Government of Canada. 

Consistency with Federal Roles and Responsibilities

Residents of areas most affected by the mountain pine beetle believed the federal government should be involved.  A 2004 survey of approximately 2800 households in 13 rural communities in BC and Alberta asked respondents: “Should this organization be responsible for mountain pine beetle activity” and “How much trust do you have in the organization to properly manage for mountain pine beetle activity”.  Eighty-one percent of respondents thought the federal government should be responsible but they had little trust in the federal government (2.1 on a scale of 1 being no trust to 5 being complete trust).5

The majority of departmental and Community Futures Organizations’ staff, stakeholders and experts indicated that the CEDI/AII was aligned with an appropriate role for the federal government.  The federal government has a mandate to ensure that all regions in Canada including the rural communities are prosperous. The federal government also has a role in addressing any funding/support gaps not met by provincial/regional/local governments to deal with the mountain pine beetle infestation.

Performance: Achievement of Expected Outcomes

General Findings

Overall, the CEDI was somewhat successful in achieving its intended objectives.  However, there were implementation issues and many projects were incomplete as of the March 2009 deadline.  The projects funded under the CEDI enabled the affected communities to deal with the consequences of the mountain pine beetle infestation by enhancing their economic capacity and infrastructure, improving their business climate, creating economic stability, generating economic opportunities, facilitating the establishment of new businesses/industries, and diversifying the local economies.  All of the case studies demonstrate progress towards diversifying the local economy into areas such as tourism, technology, manufacturing and value-added forestry operations.  

Key informants rated CEDI as moderately successful in achieving intended objectives.  Those who felt CEDI was less successful indicated that the funded projects only laid the foundation/groundwork and CEDI would have been more successful if planned as part of a comprehensive, coordinated and long-term strategy to address the impacts of the mountain pine beetle infestation with secured funding for the subsequent phases.  The efficacy of CEDI was limited by:  the lack of a proactive monitoring strategy; the absence of support from dedicated departmental staff for project implementation, particularly for proponents who lacked in-house capacity/expertise to manage their projects independently; and the global economic downturn.

Key informants identified the following critical success factors contributing to the efficacy of CEDI:

  • a dedicated departmental team during the launch phase of the CEDI;
  • solid partnerships/rapport with provincial government and other federal government departments;
  • consultation with industry, academia/experts, and the communities affected by the mountain pine beetle infestation;
  • the Aboriginal Engagement Strategy to facilitate Aboriginal CEDI application intake and assist Aboriginal project proponents with proposal development contributed to the efficacy of the CEDI
  • a two-step application process to facilitate the submission and screening of a large volume of CEDI applications within a short period of time; and

Case study proponents agreed that the two-stage application process was easy to understand and follow and found the electronic application process easy to use. 

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The CEDI faced some implementation issues.

The long approval time resulted in projects experiencing loss of momentum, missing the construction season, and losing leveraged funds.  There are several reasons for the long approval times: 1) the Request for Proposal process resulted in an unexpectedly large response creating volume delays throughout the approval process;  2) some clients lacked the capacity to refine proposals into projects and needed extensive, sometimes time-consuming, officer assistance; 3) the amount of due diligence required for projects with low levels of risk was the same as the due diligence required for projects with high levels of risk; and 4) the approval time after due diligence was complete frequently exceeded service standards.  Projects requiring environmental assessments, consultation with First Nations communities or the services of specialists/experts not available locally also faced extended timelines.

The dedicated departmental staff did not continue after March 31, 2009; instead, staff were responsible for CEDI and non-CEDI activities.  The usual departmental project monitoring began, leaving some project proponents without the support/monitoring they needed to complete their projects.

The CEDI faced some constraining factors.

Although the department provided advances to some CEDI proponents, many project proponents were reimbursed only after expenditures were made.  Proponents who did not receive advances often faced difficulties carrying out project work, particularly the volunteer-supported organizations that did not have adequate collateral/expertise to raise funds.  

Due to the absence of a streamlined and customizable project database system to process applications and generate reports using application data, departmental staff had to work overtime to manually produce the reports needed for effective decision-making, which was not efficient in terms of  cost or time.    

The global economic downturn also affected some of the CEDI funded projects. For example, one of the project proponents that received repayable assistance went into receivership due to sharp decline in sales and as a result, the project withdrew its funding request. In addition, some newly developed/expanded industrial parks found it challenging to attract new businesses during a time of declining economic activities.

Performance Measurement

The Performance Activity Architecture performance indicator for most of the projects was “number of instances of increased community stability”.  According to the departmental Program Activity Architecture Performance Plan, the definition of this indicator is:

“The number of instances of increased community stability where the CFDC, FEDO or project proponent played a key role that resulted in an outcome during the reporting period such as the development of a community needs assessment study; development of a labour force adjustment initiative; a business retention and expansion program; a “buy local” campaign; a youth retention strategy, etcetera.  It can also include making a loan to an “essential service” business in the community.”6

The definition of the indicator is very broad and raises questions as to what is actually being measured.  Two officer reports stated that:  “For the MPB program, simply completing the project indicated that this indicator was met” and “The MPB program was restricted to only using this indicator.  Therefore, it is used solely to determine if the project was successful”.  However, 15 projects did not use this indicator.  The case studies also reflect confusion as to what is being measured:  one of the case studies indicated the number of instances of increased community stability would increase from zero to ten, with no explanation as to which ten communities would be affected or how; another case study indicated the “outcome will be determined at the time of project completion”.

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CEDI realized its key program outputs

The large volume of applications indicates the program achieved its key program outputs of high awareness, understanding, response and funding to target communities. The program also had a variety of horizontal impacts including: aboriginal (63), environmentally sustainable development (10) and youth (10). 

The CEDI funded projects have generated a wide range of impacts.

CEDI funded projects addressed four programming objectives:

  • Increasing community capacity to cope with the mountain pine beetle infestation;
  • Diversifying community economies away from forest-dependence;
  • Creating opportunities for diversified and value-added forestry
  • Increasing economic infrastructure.

Expected Outcome: Increased community capacity

Definition: positioning communities to exploit new diversification opportunities.  Results: 1) completion of studies facilitating exploitation of diversification projects 2) leadership mobilizing stakeholder action towards community diversification plans/projects.

The nature of community capacity building projects made them vulnerable in several ways:

  • The projects often involved consultants who, when the project approval was delayed, took other work.  When the project was approved, the proponent then had to find a consultant. 
  • Some proponents needed significant departmental support to implement their projects at a time when the dedicated CEDI staff was being reassigned to non-CEDI tasks and the department’s focus was shifting to the Economic Action Plan.
  • The success of these projects was dependent on follow-up funding for implementation.

Key informants noted that CEDI funded projects galvanized the communities affected by the mountain pine beetle infestation and brought together a diverse group of people and organizations in each community for the first time to collectively come up with solutions to address the impacts of the infestation (e.g. collaboration between tourism operators and First Nations communities). In addition, the projects served as good learning exercises for many individuals and organizations that did not have experience in undertaking similar projects but now have the capabilities to design and implement follow-on/spin-off projects.  Project proponent respondents agreed that the projects were successful in increasing community capacity and ability to cope with the mountain pine beetle infestation (3.9/5). 

Expected Outcome:  Diversifying Community economies

Definition:  communities restructuring economic fundamentals away from forest-dependency and into new sustainable engines of economic growth.  Results:  economic diversification into new or emerging non-traditional sectors such as tourism, manufacturing, entertainment and high-technology sectors. 

One of the key lessons learned at the 2008 Mountain Pine Beetle conference regarding employment in tourism as an alternative to the forestry sector was:  “Increased tourism could partially or fully offset the impact on employment.  This would further offset the negative effects on monetary indicators.  Increased traditional agricultural activity will minimally offset the impacts on employment and monetary indicators”7  However, First Nations participants at the same conference indicated tourism may not be a viable alternative for First Nations communities:   “community members have attempted to diversify by expanding into tourism.  Small business operators soon discovered the cost of insurance is too high to make a living at tourism-based jobs.”

Key informants reported that while a number of CEDI funded projects worked toward diversifying the local economic base, these projects were seen as only the beginning of a long-term undertaking and therefore, it was generally considered too early to realize any meaningful impacts in this area.   Project proponent respondents felt projects were successful in diversifying the local economy away from forest dependence (3.7/5).

Expected Outcome:  Creating Opportunities for Diversified and Value-Added Forestry

Definition:  communities capitalizing on niche opportunities to create value from forest resources.  Results: 1) new or expanded businesses created or maintained; 2) wealth generated by value-added wood products and tradeable services derived from forest resources.

Key informants indicated that relatively few CEDI projects received funding in this area because softwood lumber manufacturers and exporters were not eligible for funding. Some projects designed to explore the feasibility of utilizing forestry resources for alternate uses such as bioenergy were highlighted as projects that generated impacts in this area.  Project proponent respondents agreed that projects were less successful in creating opportunities for diversified value-added forestry (2.9/5).

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Expected Outcome: Increasing Economic Infrastructure

Definition:  communities exploiting new systemic growth opportunities that attract incremental investment.  Results: improvements in transportation, communication, commerce, energy, skills, technology or knowledge. 

Key informants stated that projects supporting new economic infrastructure including the AII projects tended to be larger value projects. Apart from airport expansion/upgrading, these projects supported the development/expansion/upgrading of a wide range of infrastructure such as industrial parks, visitor information/interpretive centres, walking/hiking trails, fibre optic/broadband networks, connector roads/bridges etc. Project proponent respondents indicated projects had some success in creating new economic infrastructure.

Ultimate Outcome:  Developing and diversifying the Western Canadian Economy

Literature on the role of community development in achieving a diversified and developed regional economy

Under terms such as “community adjustment”, “community transition” and “community economic development”, governments have pursued various approaches to developing rural community economies towards long-term goals of sustainable regional economic diversification.  Key lessons pertaining to regional development policy show, for example:  “a range of policy instruments and measures will need to be brought into play, including financial assistance for developmental projects; seed monies; support for innovation and technology; support for community development and capacity building; resources for consultation, planning and community empowerment and involvement; and expert and technical assistance”. 8

Evidence that Community Economic Diversification Initiative Developed and Diversified the Canadian Economy

The CEDI laid a strong foundation but did not secure funding for the long term

CEDI was intended to be the first step in the federal programming response to the beetle infestation.  CEDI supported many feasibility studies that would diversify the economy when implemented through follow-up funding. However, the recession forced the diversion of the follow-up funding into economic stimulus rather than the mountain pine beetle infestation.  Among the four categories of projects, some, such as economic infrastructure, had longer term adjustment outcomes than others.  It is still too early to determine the long-term success of the initiative and some key informants claim the funded projects only laid the foundation/groundwork and CEDI would have been more successful if planned as part of a comprehensive, coordinated and long-term strategy to address the impacts of the mountain pine beetle infestation with secured funding for the subsequent phases.  Yet some projects - the case studies for example - show early evidence of progress towards diversifying the local economy and therefore contributing in a small way to diversifying the Western Canadian economy.  Although the outcome assessment component of the evaluation was meant to provide insight on the extent to which CEDI contributed to diversifying the Western Canadian economy, it ultimately failed to improve the weak evidence-base underlying the measurement of CEDI’s impacts.   

Unintended Impacts

The projects mobilized communities but delivery problems adversely affected the department’s image in the communities.

Under the CEDI, the department provided funding to many small-scale community-based organizations that previously had not received funding from the department or worked with the department directly since typical funding recipients tend to be larger, more established organizations with highly developed skills/expertise to manage large-scale, complex projects. Working directly with a new type of funding recipient enabled the department to raise its profile at the grassroots community level and cultivate new relationships.  The projects were catalysts, generating community interest and support, building capacity for future projects, generating employment and developing cooperation and partnerships.  On the negative side, the tight application deadlines combined with the long approval time lead to a sense of mismanaged expectations and disillusionment in the communities, adversely affecting the image of the department and the Community Futures Organizations.  For example, one case study proponent understood approval would be done in two months and it took 14 months, creating significant stress and frustration for the client and leaving 13 months to complete the project. 

Some projects resulted in impacts on a much greater scale than originally anticipated and project proponent respondents claim the projects will likely lead to long-term impacts on the communities. For example, the creation of a community garden generated widespread interest in local and sustainable food production/farming in a community, which, in turn, initiated the process to establish a local agricultural distribution venture as a way to diversify the local economy. The community garden became a symbolic beacon of hope for a community going through tough times.  Several of the case studies proponents indicated their projects garnered media attention and affected the public through increased awareness, understanding and raising the community profile locally/internationally.  One of the case study projects was invited to set up a booth at the 2010 Olympics in Vancouver.  

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Performance: Demonstration of Efficiency & Economy

Economy

For the most part, CEDI was well-structured but design changes could have improved effectiveness 

CEDI Design and Launch

The designing and launching of the CEDI were executed effectively and efficiently, particularly in light of the tight timeline.  The department had a dedicated team set up to launch CEDI, allocated the necessary resources to the CEDI/AII, and was able to leverage the resources/expertise of the provincial government and other federal government departments as well as academics/experts and relevant representatives from industry and the affected communities including First Nations bands.  As a result, key components of the CEDI/AII such as the types of assistance provided, the eligibility criteria, promotion and outreach, initial screening of applications, and the provision of assistance/support to applicants in preparing Expressions of Interest and proposals was designed and delivered in an effective and timely manner.   

Most respondents of non-funded projects said the CEDI was well-structured but some experienced delays in getting responses, found the application timeline difficult to meet and indicated there could be a clearer focus on primary objectives. The project proponent survey respondents found the assistance and seminars provided by the department and Community Futures Organizations to be helpful.  Proponents of non-funded and funded projects felt there could have been more promotion of the program.  Focus group participants stated that promotion of the CEDI and the AII was done during the summer months when many potential project proponents were away on vacation, reducing the effectiveness and reach of promotional activities.

CEDI Request for Proposal and Approval Process

An interim review of CEDI’s Request for Proposal process9 concluded:

  • The large number of Expressions of Interest overwhelmed both project officers and the department’s technical systems, making it difficult to meet service standards and proponent expectations.  
  • The program neglected to complete a value for money comparison to select projects with the best potential outcomes because it was not oversubscribed at the proposal stage. 
  • The program “generated a high degree of awareness, program understanding, quickly identified projects, and, while formal in structure, also allowed for project officers to undertake developmental work with proponents and support capacity building in communities.” 

The departmental key informants raised several issues surrounding the approval process.  The CEDI projects involved file reviews by more than 10 staff within the various departmental offices in Vancouver, Edmonton and Ottawa.  Each project underwent extensive due diligence review and some staff noted that the information required from applicants was onerous given the relatively low value of funding sought. In order to fast-track the approval process, department staff batched the more detailed or complete proposals together and sent them out for approval while they worked with applicants to fine-tune the proposals that required additional work.  This approach worked well for some batches; however, the entire batch could be stalled if it contained one questionable application.

The lengthy approval process combined with a lack of communication with applicants affected the projects in several ways: 

  • The relatively brief period of time applicants had to apply for funding signalled that the federal government was committed to disbursing the CEDI funds on a priority basis to assist the affected communities.  But the long approval time, in stark contrast to the time given to applicants to apply for funding, did not deliver on the raised expectations and resulted in a sense of disillusionment in the communities. There was also a resultant loss of momentum as some project proponents became engaged in other projects/priorities while awaiting approval;
  • Projects involving construction work missed the construction season and required extension.  This problem was mentioned in several of the case studies and sometimes meant that the proponents were unable to adequately source for the best price because they had only a few months to implement the project;
  • Projects requiring environmental assessment or consultation with First Nations communities did not have a realistic timeline to complete such complex procedures. The lengthy approval process further pushed their timeline;
  • Some projects required the services of specialists/experts (e.g. geomorphologist) not available locally and required additional time to secure such services from outside their respective regions.  The delay in approval further pushed their timeline; and
  • Some projects lost the funding leveraged from other sources while they awaited departmental approval because the other funders could not remain committed.
    The extent and impact of the long approval process was a common theme throughout the case studies.  As previously mentioned, one case study proponent waited 14-months for approval.  An interval spanning six months or more from application receipt to project approval appeared to be the norm rather than the exception among the case studies:
  • One proponent underwent a 16 month approval process because the department wanted presales.  The proponent’s funding was eventually approved in April 2009 with project completion in March 2010.  Since work could not be done in the winter, the proponent was essentially faced with completing the project in six months.
  • Another project was initially approved for less funding than requested, leading to several months of negotiation before obtaining the funding needed to do the project.  The proponent was then notified of funding approval but had to wait six to seven weeks for the announcement by the federal government before they could start the work.  Three other case study proponents experienced approval delays of between six months and one year, including, in one case, a six-week delay while waiting for the funding announcement. 

Some case study proponents indicated they didn’t know deadlines would be extended and worked very hard, under considerable stress and additional expense, to meet the original deadlines – in effect they were punished for meeting deadlines.  The deadline extension was also stressful for departmental staff who couldn’t announce an extension until it was approved.  The long approval time, combined with the prevalence of a relatively high number of project proponents who lacked in-house capacity/expertise to manage projects independently and the absence of proactive and consistent departmental follow-up and support, resulted in many projects not completing as per the original deadline and requiring an extension. The extensions of the CEDI program was cited as the major reason as to why department and Community Futures Organizations’ staff felt that the CEDI was not implemented as planned. 

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CEDI project monitoring and follow-up was lacking

The dedicated departmental team set up for the CEDI did not continue after the administrative funding for CEDI ended on March 31, 2009.  Departmental staff were then assigned both CEDI and non-CEDI responsibilities.  The monitoring for the CEDI projects was the same as for other projects under other programs and did not provide capacity or expertise to help clients manage their projects.  This was problematic because many project proponents lacked in-house capacity/expertise to manage their projects independently and needed proactive and frequent follow-up/support.  The lack of monitoring may partially explain why 25% of projects failed to submit their first progress report within the 12 months following their acceptance of the letter of offer.  

Almost all (78%) projects were delayed for a combination of reasons most often involving the slow approval process, weather conditions and delays related to consultants/contractors;  however, respondents said that since there was flexibility on the implementation timeline side, these delays did not significantly affect the success of the projects.  The final reports for 48 of the 61 completed projects indicated that the department could not have engaged the client more effectively although some funded and non-funded project proponents felt communication with project officers could have been improved.  The case study proponents were generally pleased and grateful for the help from the department; problems most commonly cited by case study proponents related to staff going on vacation without someone to fill in for them, the large amount of paperwork required for reporting purposes, delays in processing claims and high departmental staff turnover.  A clear succession plan was not always in place following the departure of a number of departmental staff involved in the CEDI.  The initial extension of CEDI created problems related to a lack of a clear extension strategy along with the allocation of additional resources to ensure adequate departmental oversight of the outstanding CEDI funded projects.  

Project outputs and outcomes were moderately cost-effective and the CEDI/AII obtained good value with respect to the use of public funds.

The majority of staff and project proponent respondents felt CEDI/AII was moderately cost-effective.  Staff indicated that conditions such as the use of competitive bidding and supplier quotes that project proponents were contractually obligated to meet ensured that project outputs and outcomes had been generated at the lowest possible cost.  Contractual obligations were not strictly followed in every case because some proponents were forced to pay more than the lowest possible cost in order to meet project completion deadlines. The administrative costs of delivery were also seen as consistent with the costs of delivering similar initiatives/programs. However, the assessment of administrative costs was based on the initial allocation and did not take into account the administrative funds spent on the CEDI subsequent to the extension.   

Efficiency

CEDI incorporated some best practices but efficiency could have been improved.  The following discussion compares CEDI to comparable programs and best practices in economic adjustment.

CEDI delivery costs were reasonable.  The CEDI program operating costs are within the normal costs of program delivery of the reviewed programs.  The total budget of $36.6 million for CEDI, includes $3.48 million for management costs including operating costs and a Public Works and Government Services Canada accommodation charge of 13% of salaries. Thus delivery costs were 9.5% of program funding.  The average delivery costs for the reviewed programs were under 10%.

CEDI requirement to leverage funds appeared to be reasonable.  The department did not provide 100% funding to any CEDI project.  On average, the department funded 73% of project costs; however the departmental contribution varied considerably across projects (ranging from 15% to 92%).  Collaboration between stakeholders is a recognized success factor10 ; the CEDI funded projects leveraged funding from a wide range of sources including provincial/regional/municipal governments, other federal government funding programs, economic development organizations/trusts, Beetle Action Coalitions, First Nations/Aboriginal organizations, the private sector (e.g. credit unions, chambers of commerce etc.), and the project proponents themselves (Table 3.1). Table 3.2 summarizes the department’s contribution to the total project costs and the dollars contributed by other funders for each departmental dollar invested (dollars leveraged).  Although leveraging varied across zones and program objectives, overall each department dollar was matched by fifty cents from other contributors.  A leveraging ratio of fifty cents is low compared to the $1.14, $1.25 and $2.00 leveraged by three similar programs11.  However, the requirement for leveraging in an adjustment program can have a negative impact, especially in depressed areas.  Conversely, some staff indicated that the department had a more rigorous set of screening/assessment criteria to approve funding compared to other funding sources, which meant that securing funding from the CEDI/AII helped open doors to other funding sources. Project proponent respondents agreed that CEDI funding helped leverage funding from other sources.

Table 3.1 Collaborative Funding
Project Partner Funding Contribution ($, % of total cost)
  Other Federal Provincial Municipal Client Total Partner Funding
CEDI Total $1.23  (2.4%) $1.16  (2.3% ) $4.26  (8.5%) $9.82  (19.7%) 32.9%
*All numbers in millions CAD$

Table 3.2 Departmental Contributions and Leveraging Ratios, July 2010
Project Total WD contribution (% of total cost Total Cost Of Projects Dollars Leveraged  Per WD Dollar
CEDI Total $33.47 (67%) $49.94 $ 0.50
Note: All numbers in millions CAD$

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The top down design had some advantages.  A top down design is a design largely imposed by the funding agency.   Although the priorities of the program were based on recommendations resulting from a one-year community and public consultative process, the program design was top-down in terms of project selection, delivery and monitoring. 

The best practices literature notes that the advantage of the top down approach is that it ensures that aggressive lobbyists do not control the program to the detriment of vulnerable social groups.  CEDI made a point of preparing First Nations clients for the program and making the involvement of First Nations an advantage for rankings of projects. The top down approach enabled the process to be more inclusive. The CEDI program had developed very clear guidelines and criteria that were comprehensive and easily understood. The program also used a call for an “Expression of Interest” from potential project proponents to reduce the amount of unnecessary effort on the part of proponents that had no chance of success. Successful programs follow this approach to maintain a higher level of client satisfaction; however, some project proponent respondents felt the application process could be simplified for small projects. 

Another feature of the program design that was made possible by the top down approach was the targeting of communities that were suffering the most from the pine beetle infestation.  However this approach can also mean that communities with low capacity for carrying out meaningful projects are targeted.  Other programs have focussed on increasing capacity before and during an economic adjustment initiative.  This is particularly important when an initiative is centrally administered.   

CEDI did not advance money to all proponents who might have benefitted from an advance. Approximately one third of proponents received advance payments and the remainder were reimbursed after expenditures were made.  Reimbursement can create hardships for organizations in severely economically depressed areas, especially given the lengthy waits for reimbursement that occurred.  Some project proponent respondents found it difficult to undertake their project without advanced funding.  Other programs, recognizing the financial situation of their clients, will advance funds.  The Nechako-Kitamat Development Fund Society Grant Program advances proponents 50% of the value of the project on approval.  Case study proponents agreed that this caused significant cash flow problems for them. 

The department partnered with the local Community Futures Organizations in order to provide information and assistance with project development and help with promotion.  According to the literature and program administrators, complementing centralized delivery with a local presence can slow the delivery process but can have the following positive impacts.

  • Enhanced quality of applications generated and approved;
  • Improved ability to consider the true capacity of communities to do projects or help to build that capacity;
  • Increased flexibility in response to individual community circumstances; and
  • Greater likelihood of reaching small communities or maximizing the fit of projects to priorities. 

At least half of the case study proponents described their local Community Futures Organization as instrumental in promoting CEDI and the application process.  Project proponent respondents felt the program could be improved by engaging more local government involvement or the involvement of local organizations so that the funding agencies are more aware of the communities’ needs.

The centralized monitoring was unlikely to be as effective as local monitoring.  Local monitoring of project progress more accurately reflects the circumstances of the proponents efforts than centralized paper-based analysis.  Centralized monitoring often results in more paper and effort as the arms-length monitoring officer seeks to be reassured by the success of a project that has not been seen.

The short time frame between the program announcement and the application date created issues for applicants.  The program had at least the appearance being rushed into implementation.  This affected the quality of the applications and reduced the ability of communities with little local capacity to participate. 

The term of the program limited its ability to mitigate pine beetle infestation impacts.
Although CEDI was meant to be the first step in the federal programming response, the follow-up funding for implementation was not secured and did not materialize.  At the time CEDI was implemented, community economies were booming but the long-term economic impacts of the pine beetle infestation were expected in 5-8 years. CEDI was a time limited program with little potential to effect long term adjustment without follow-up funding.  This is supported by evidence that shows that a time limited program restricts the opportunity for significant adjustment and reduces the potential for highly effective strategic programming with truly sustainable adjustment techniques.  In fact, one of the recommendations emerging from the evaluation of the two-year program upon which CEDI was based was to “set a longer program duration from the beginning.”12

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Possible Improvements and Lessons Learned

There were several processes during the CEDI implementation that took too long for a two year program.  The database did not capture the lengthy amount of time involved in proposal development that occurred prior to receipt of the proposal. The departmental database indicates that the time between the receipt of the proposal and completion of the Due Diligence Report was at least 231 days for half of the projects (ranging  from 83 to 566 days).   Other time periods throughout the project lifecycle included:  1) an average of 14 days from time of completion of the Due Diligence Report to regional approval; 2) an average of 89 days from time of regional approval to ministerial approval; and 3) an average of 5 days from ministerial approval to issue of the letter of offer. 

Focus group participants suggested a few changes that, if implemented in the design phase of the process, could improve the effectiveness of the program:

  • Develop a template for one-time and time sensitive initiatives like the CEDI and the AII that could fast track the design and delivery processes. The template should be flexible enough to accommodate the unique needs of each program.   Technical system requirements should also be considered. 
  • Consult local delivery partners early in the design phase to pinpoint specific community needs and fund the most qualified proponents in each community.
  • Adjust funding criteria to promote regional collaboration and discourage competition for limited funding among the individual communities located in the target region.
  • When funding a large number of projects under different categories, it is necessary to recognize that the same timeline may not be realistic or appropriate for all projects.  For example, projects involving environmental assessment or consultation with First Nations communities tend to require more time.
  • Allocate some funding to project monitoring/follow-up early in the process to avoid future problems (e.g. early monitoring/follow-up can ensure that funded projects are completed on time and avoid the need to extend project timelines).  An important consideration in developing monitoring strategies is the capacity of the funding recipients/project proponents.
  • While staff may not be able to control the approval time associated with centralized decision-making, departmental staff can fast track the design and delivery of some processes including: 1) clarifying eligibility criteria early on to ensure that potential applicants receive information in a timely manner; 2) developing strategies/IT systems to deal with the high volume of applications; and 3) streamlining information requirements for applicants and working with them closely to ensure timely development/submission of applications. 

Key informants suggested that the Community Futures Organizations and/or other economic development organizations could have played a more direct and effective role in assessing the project proposals as well as the capabilities of project proponents and providing the support/monitoring needed for successful implementation of the projects.  The focus group participants supported a more prominent assistance and monitoring role for local community economic development organizations.  A competitive bidding process to select local community economic development organizations for the provision of project monitoring services should assess not only cost but also the organizational capacity, community presence and quality of services required.

Project proponents felt more local government involvement or involvement of local/regional organizations would make funding agencies more aware of the communities’ needs.  Proponents suggested two other improvements:  1) incorporate a mechanism for timely dissemination of funding or turnaround time from claims submissions (e.g. staggered or advance funding); 2) shorten approval time or lengthen the time to complete projects to lessen the “hurry up and wait” feeling on the part of the proponent.


[4] Source: Parkins and MacKendrick, 2007. “Assessing community vulnerability: a study of the mountain pine beetle outbreak in British Columbia, Canada.”  Global Environmental Change 17, 460-471.  Risk  awareness was assessed using the question: How much risk do you think the mountain pine beetle outbreaks poses, in terms of the impact on the well-being of your community or region?  The four communities were: 100 Mile House, Burns Lake, Invermere and Mackenzie.

[5] Source: Parkins, J. 2008. “The Metagovernance of Climate Change: Institutional Adaptation to the Mountain Pine Beetle Epidemic in British Columbia”.  Journal of Rural and Community Development, 3 (2), 7-26.

[6] Source: “PAA Performance Plan – Activity, Sub-activity and Outcomes: Indicators and Information source”.  http://wdnet/toolbox/guidelines_procedures/mandp/Training/MandP2009/PAAPP.doc   Accessed September 15, 2010.

[7] Source: “ Mountain Pine Beetle: From Lessons Learned to Community-based Solutions Conference Proceedings, June 10-11, 2008.  BC Journal of Ecosystems and Management 9 (3): 51-59.

[8] Source: “A Review of Rural and Regional Development Policies and Programs”, Canadian Policy Research Networks, 2008, page v. 

[9] Source:  “WD’s Use of Request for Proposal Processes in Program Delivery. A Review and Considerations for the Future.”  Final Draft, September 2008, page 9-10.

[10] Source:  Managing Federalism: Lessons From the Economic Adjustment Program

[11] The three comparison programs were:

  1. Strategic Communities Investment Fund delivered by Atlantic Canada Opportunities Agency.  Objective: the program was “designed to support strategic initiatives that respond to the economic development needs of Atlantic Canada and help communities strengthen their economic base. The primary focus of this initiative was projects in rural areas.” Leveraging ratio of $1.14.   http://mediaroom.acoa-apeca.gc.ca/e/financial/SCIF.shtml, accessed October 26, 2010.
  2. Softwood Industry and Community Economic Adjustment Initiative.  Objective:  $110 million program designed to “create long-term, sustainable economic benefits in regions affected by the (Canadian softwood lumber) tariffs”.  Leveraging ratio of $1.25.  Source:  report entitled “National Evaluation of the Softwood Industry and Community Economic Adjustment Initiative (SICEAI), page v.
  3. Community Economic Adjustment Initiative delivered by Western Economic Diversification.  Objective:  “encourage long-term sustainable economic development and diversification in coastal communities affected by changes in the salmon fishery” Source:  report entitled “Western Economic Diversification & Pacific Fisheries Adjustment.  An Evaluation”, page 70.  Leveraging ratio of $2.00.

[12] ‘National Evaluation of the Softwood Industry and Community Economic Adjustment Initiative (SICEA).  March 2006, page vii.