Western Economic Diversification Canada
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Conclusions and Recommendations

Relevance

  • The overall conclusion is that there is a relevant ongoing need for the Community Futures Program (CFP) in Western Canada. Evidence from the literature review and from analysis conducted by Industry Canada on SME financing and credit conditions indicate that SMEs face barriers to financing.
     
  • The client survey revealed that the majority of clients who applied to the CF for funding were previously denied funding from other sources.
     
  • Key informants and survey respondents indicated a need for community strategic planning and community economic development (CED) in their regions, however to a lesser extent than for access to capital and business development services. Interview results indicated that respondents were not very familiar with CF CED activities. Given the broad nature of CED, evaluation advisory committee members indicated that reporting on CED indicators is very subjective.
     
  • An assessment of other programs that provide business services indicates that such programs have specific conditions which limit their reach to specific groups of entrepreneurs. The CFs have identified mechanisms such as collaborations, partnerships and referrals to minimize overlap and duplication with other programs and funding sources.
     
  • The 2014–15 Report on Plans and Priorities for the department aligns the CFP with the Government of Canada outcome of “Strong Economic Growth.” The objectives of the CFP align with departmental priorities in Business Productivity and Competitiveness as stated in the department corporate business plans from 2008 to 2012. The objectives of the CFP also aligned with the roles and responsibilities of the department as a federal government economic development agency.

Performance: Achievement of Expected Outcomes

  • Using data from Statistics Canada, the department was able to assess the long term outcomes of CF-assisted firms to a comparable group of non-assisted firms. Analysis of the data demonstrated that CF lending activity is making a difference. CFs continued to lend to a more diversified clientele base according to the Herfindahl Index. CF-assisted firms outperformed a comparable group of non-assisted firms in terms of employment growth, survival rate and revenue growth.
     
  • Key informants and survey respondents agreed that the absence of CFs in their community would have a highly negative impact on start-up, survival, growth of new businesses, and community strategic planning and development in their service area.
     
  • With respect to performance, the performance data on outputs, immediate and intermediate outcomes demonstrated the effectiveness of the CFP in achieving its objectives particularly in those outcomes that align with activities related to loans and business development services.
     
  • The evaluation encountered challenges during the data collection exercise particularly on retrieving data from the software used by the CFs and the database used by the department.

Performance: Efficiency and Economy

  • Overall, CF loan clients leveraged $1.2 for every dollar in loans disbursed by the CFs. Using the total for all leveraged amounts for all CF activities, the CFP leveraged $4.6 for every dollar spent by the department.
     
  • CFs have experienced reductions in their staff resource over the years but have been efficient and effective in achieving their objectives as evidence by the analysis of the Statistics Canada business numbers. This is supported qualitatively through the interviews and surveys.
     
  • There are some concerns with the management of the investment funds especially with respect to cash on hand.
     
  • CF clients expressed satisfaction with the services they received from their CFs. The most common reason cited for client satisfaction was the one-on-one business counselling services that clients receive from CF staff. CF Managers and Chairs however provided a lower level of satisfaction for WD, in particular in relation to funding levels.

Recommendations

Based on the findings and conclusions drawn from the evaluation, the following recommendations are made to be addressed by the department.

Recommendation 1: The department should clarify CF activities that count as community economic development.

  • Clarity in community economic development is needed for better performance reporting in this activity. Interview results indicate that respondents were not very familiar with CF activities that count as community economic development.
     
  • Given the broad nature of community economic development, evaluation advisory committee members indicated that reporting on indicators is very subjective.

Recommendation 2: The department should examine the effectiveness of the CF reporting system to report on outcomes and ensure better integration with departmental systems.

  • The Evaluation Team faced challenges in importing data from the CF database into a format that integrates with departmental systems.
  • CFs indicated that retrieving information for the client survey was a huge burden on their limited resources.
  • This issue regarding the database system was recognized in the 2008 Evaluation but action on it was deferred by the department.

Recommendation 3: The department should continue to work with other Regional Development Agencies on enhancing analysis of long-term outcomes using Statistics Canada data runs. The department may want to explore using this method of assessing long-term outcomes for other departmental programs.

  • This evaluation relied to a great extent on the analysis of the Statistics Canada data runs to report on ultimate outcomes for the CFP.