Western Economic Diversification Canada
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Executive Summary

Introduction

The Women's Enterprise Initiative (WEI) was established in 1995 to encourage the development and growth of female-led businesses, advance self-employment and business development and, ultimately, promote economic equality between men and women.

The WEI operates not-for-profit WEI organizations in each of the four western provinces. The organizations are incorporated and currently receive operating funding and a loan fund from the department. Each organization is led by its own board of directors and offers loans as well as services tailored to the particular needs of women in its region. The most recent five-year funding agreement expired 31 March 2010 and the funding agreements have been renewed on a year-to-year basis since then. Each organization currently receives annual operating funding of $975,000 and the loan fund was valued at over $20.1 million as of 31 March 2012.

This evaluation assessed the relevance and performance of the WEI over the five fiscal years from 2008–09 to 2012–13. The evaluation used multiple lines of evidence and included document and literature review, file and database review, analysis of comparable programs, key informant interviews, client surveys and focus groups. During the study period, a total of $25.6 million in loans were approved by the WEI organizations and approximately 17,403 clients received services.

Relevance – Continued Need for Programming

Females are an under-represented segment of entrepreneurs. Of all small and medium-sized enterprises in Canada in 2007, approximately 16 percent were majority female owned and these proportions were largely unchanged from 2001. The literature and interviews reviewed in this evaluation confirm the effectiveness of targeted programming in meeting the needs of women entrepreneurs. The effectiveness of non-targeted programming has not been well-studied.1

The WEI filled important programming gaps in business support services, female-focused training programs and services, and financial assistance for women entrepreneurs. More than half (53 percent) of clients who received loans considered the prospects of obtaining financing elsewhere very unlikely. About two thirds of businesses that were not approved for a loan under the WEI reported obtaining financing from other sources; however, most of these clients reduced the scope or delayed the establishment or development of their business.

Relevance – Alignment with Departmental and Federal Government Priorities

The WEI supports the department’s strategic outcome of developing and diversifying the western Canadian economy and aligns with federal priorities as outlined in the Government of Canada’s “Advantage Canada: Building a Strong Economy for Canadians” document.

Relevance – Consistency with Federal Roles and Responsibilities

Over 90 percent of key informants indicated that the WEI is consistent with federal government roles and responsibilities. It fits well with the department’s mandate for economic diversification in Western Canada. A small minority of key informants questioned the need for the WEI and were of the view that the role of government is to foster diversification and not to support one group or special interest groups.

Performance – Achievement of Expected Outcomes

The program achieved short term impacts such as increased revenues, jobs and business creation. Among non-loan clients, 70 percent were satisfied with services received and 35 percent indicated the services will improve the competitiveness of their business. Sixty-nine percent of 96 loan client respondents noted the funding enabled their business to survive and most non-loan clients believed the services were important, but not critical, to establishing or developing their business. Over the intermediate term, clients estimated that 44 percent of their current revenues would not have been generated in the absence of the support provided by the program, at least 43 percent of clients indicated improved business practices as a result of program assistance and at least 16 percent reported the program assistance had increased the export capacity of their business. Between 1995 and 2011, the number of self-employed women in western Canada grew 27 percent, a trend that reflects one of the program’s ultimate outcomes: greater self-employment and business development. By increasing business establishment and survival, the program expects to contribute to another of its long term outcomes: establishment and growth of women-owned and controlled businesses. The program’s ability to contribute to its third ultimate outcome, economic gender equality, is difficult to measure.

WEI success factors include skilled and dedicated staff, the credibility of WEI organizations, their approach to design and delivery of services, departmental support and well-defined objectives and governance structures. Clients appreciated the readily available support, excellent website and variety of services (information, mentoring, training) offered. Factors which constrain the achievement of outcomes relate to limited resources, the short-term agreements with the department, low levels of leveraged funding, lack of access to services in particular communities, limited flexibility of the services particularly with respect to lending restrictions and limited staff expertise and understanding of particular types of businesses and industries. The most-commonly identifed external factors that may influence the WEI and its success are the overall health of the economy and overall public recognition of the need and value of the services.

Performance – Demonstration of Efficiency and Economy

The evidence suggests that the program is operating with due regard to economy and efficiency:

  • The department reviews annual reports to determine whether the organizations are performing up to expectations and achieving their minimum performance standards. Only one organization fell short of its loan targets for one year during the study period. In terms of the department’s efficiency, at most one full time equivalent position supported the four WEI organizations that received a total of $3.9 million in funding per year.
     
  • On average, per year (2008–12), the WEI organizations delivered a total of 5,983 business advisory services, 38,501 information services and approved 114 loans. A breakdown of costs to deliver loans or services would require more detailed costing information than is currently available. The WEI organizations disbursed a total of over $25 million in loans and created 2,384 jobs. This is equivalent to one job per $10,737 of loans disbursed and 5.3 jobs per loan, comparing favourably with Industry Canada’s Canada Small Business Financing Program that created 2.5 jobs per loan.2 This also compares favourably with the department’s Community Futures Program which averaged one job per $13,688 of loans disbursed and 3.6 jobs per loan over the same five year period.
     
  • At the time of each of the loans by the WEI organizations, every dollar in loans disbursed by the WEI organizations was matched by $1.03 of financing from non-departmental sources. In comparison, Atlantic Canada Opportunities Agency’s Women in Business Initiative reported leveraging of $0.39.
     
  • Clients estimated that 44 percent of their current revenues would not have been generated in the absence of the support provided by the program.
     
  • The WEI is recognized in the literature as a “best practice” in providing research-based, cost-effective, “one-stop” support services to women entrepreneurs. Although the WEI is good value for money, the WEI organizations can improve in terms of collaboration and partnerships. To leverage resources and increase outreach to rural communities, WEI organizations should increase efforts to collaborate, develop referrals and better coordinate programming to avoid duplication and ensure that services are available to all women.
     
  • The program needs resources and funding changes to enable service planning and sustainability. Research is needed to ensure the programming is needs-based and designed to most effectively support female entrepreneurs. Service access for clients could be improved by easing the application requirements for loans, delivering more services online or offering training and seminars at different times and locations.

Recommendations

The evidence gathered in the evaluation and the analysis supported the following recommendations:

Recommendation 1: The department should consider funding longer-term contribution agreements with WEI organizations to facilitate planning of services.

Recommendation 2: The department should work with the WEI organizations to continue to evolve and ensure the program continues to meet the needs of women entrepreneurs.


[1] To conclusively determine whether targeted programming is necessary, the effectiveness of non-targeted services for women entrepreneurs is needed.

[2] Industry Canada. “Canada Small Business Financing Act. Annual Report 2010–2011”. Accessed at: http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/la03089.html Accessed September 21, 2012.