Western Economic Diversification Canada
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Report on Plans and Priorities 2015-16

Section I: Organizational Expenditure Overview

Organizational Profile

Appropriate Ministers:

Minister of Health
Minister of State (Western Economic Diversification)

Institutional Head:

Daphne Meredith, Deputy Minister

Ministerial Portfolio:

Department of Western Economic Diversification

Enabling Instrument:

Western Economic Diversification Act,i R.S.C. 1985, c.11, (4th Supplement)

Year of Incorporation/Commencement:

1988

Other:

Headquarters - Edmonton, Alberta

Offices -

  • Vancouver, BC
  • Edmonton and Calgary, AB
  • Saskatoon, SK
  • Winnipeg, MB
  • Ottawa, ON

Organizational Context

Raison d'être

Western Economic Diversification Canada (WD) was established to promote the development and diversification of the economy of Western Canada and to advance the interests of the West in national economic policy, program and project development and implementation. The Minister of Health, supported by the Minister of State (Western Economic Diversification), is responsible for this organization.

The Department operates under the provision of the Western Economic Diversification Act, which came into force on June 28, 1988. WD is responsible for regional development in Western Canada by developing and supporting economic policies, programs and activities to promote economic growth.

Responsibilities

WD's mandate allows the Department to implement diverse programs and initiatives across the West to create strong, competitive and innovative businesses and communities. Its western base has enabled the Department to foster extensive partnerships across Western Canada with business and community organizations, research and academic institutions, Aboriginal groups as well as provincial and municipal governments.

These connections enable the Department to identify and support economic opportunities in the West and ensure that western interests and perspectives are reflected in national decision making. The Department will continue to capitalize on opportunities and implement strategies to mitigate risks and adapt to changes in a dynamic and complex environment.

WD focuses its activities in three program areas:

Business Development and Innovation: WD helps small and medium-sized enterprises (SMEs) develop and grow, create jobs, expand their markets, increase their exports and become more innovative and productive. The Department assists SMEs with international business engagement and works to attract investment to the region, as well as assist western Canadian SMEs to access opportunities linked to government procurement. Further, WD promotes the development and growth of the knowledge-based economy by building innovation capacity and supporting the commercialization of new knowledge-based products, processes and services.

Community Economic Growth: WD helps communities in Western Canada sustain their local economies and adjust to changing economic circumstances through departmental programs and by delivering national initiatives on behalf of the Government of Canada. WD also supports community-based organizations that provide western entrepreneurs with the information, training and loans they need to start and grow their businesses.

Policy, Advocacy and Coordination: WD identifies opportunities to strengthen the western Canadian economy and coordinate economic development activities, policies and programs across the West. WD works to build strategic relationships with key decision makers across Canada and works with western Canadian industry on defence-related procurement opportunities.

Strategic Outcome and Program Alignment Architecture

The Program Alignment Architecture (PAA) provides an overview of how the Department's programs and activities are aligned and how the expected results are organized to contribute to the achievement of WD's strategic outcome.

These programs comprising the Department's PAA help ensure that Western Canada continues to make a strong contribution to Canada's economic success.

Strategic Outcome: A growing and diversified western Canadian economy

  • 1.1 Program: Business Development and Innovation

    • 1.1.1 Sub-Program: Trade, Investment and Market Access
    • 1.1.2 Sub-Program: Business Productivity and Growth
    • 1.1.3 Sub-Program: Innovation Capacity Building
    • 1.1.4 Sub-Program: Technology Commercialization

  • 1.2 Program: Community Economic Growth

    • 1.2.1 Sub-Program: Infrastructure Programming
    • 1.2.2 Sub-Program: Community Development
    • 1.2.3 Sub-Program: Community Futures Program
    • 1.2.4 Sub-Program: Targeted Economic Initiatives

  • 1.3 Program: Policy, Advocacy and Coordination

    • 1.3.1 Sub-Program: Advocacy and Coordination
    • 1.3.2 Sub-Program: Economic Analysis

  • Internal Services

Organizational Priorities

In 2015–16, WD will focus on six priorities to create jobs and promote economic growth while delivering on its mandate to develop and diversify the western Canadian economy.

Priority Type1 Program(s)

Innovation

Ongoing

Business Development and Innovation
Policy, Advocacy and Coordination

Description – Strengthen Western Canada's innovation capacity by investing in projects that will bring new technology-based products, processes and services to market and convening key stakeholders to facilitate discussions on how to strengthen the innovation marketplace and support pre-commercialization opportunities.

Why is this a priority?

  • Innovation is critical to the success of the western Canadian economy. To be competitive in the global marketplace, as well as foster and stimulate growth domestically, western Canadian businesses need to develop and commercialize innovative products, processes and services.
  • According to Statistics Canada, in 2011, business expenditures on research and development (R&D) in Western Canada were 0.5 percent of Gross Domestic Product. This is below the overall Canadian expenditures of 0.89 percent ii and the United States of 1.89 percent.
  • The commercialization of new technology continues to face challenges in the availability of early and late-stage risk capital for SMEs. Levels of venture capital investment in Canada's western provinces are increasing, having exceeded the previous peak in 2007.iii
  • The federal government, in alignment with western Canadian provincial governments, continues to identify innovation as a priority with the commitment to renewing Canada's Science and Technology Strategy; Seizing Canada's Moment: Moving Forward in Science, Technology and Innovation 2014.iv

What are the plans for meeting this priority?

  • Under the Western Innovation (WINN) Initiative, assist SMEs in Western Canada to move their new and innovative technologies from the later stages of R&D to the marketplace.
  • Invest in market-driven projects that develop and showcase new innovative processes and technologies, and support the innovation ecosystem for SMEs through capacity building.
  • Act as a convenor of industry, post-secondary institutions, major research facilities and government to facilitate the advancement of innovation policy and identify new innovation models that strengthen the innovation marketplace and support commercialization opportunities.
Priority Type Program(s)

Skills Development and Training

Previously committed to

Business Development and Innovation
Community Economic Growth
Policy, Advocacy and Coordination

Description – Support market-driven skills development, including project funding to support skills training, and facilitate the development of partnerships between industry and organizations that deliver post-secondary training to generate sustainable, long-term jobs.

Why is this a priority?

  • Western Canada's long term economic well-being depends on a trained and highly skilled workforce.
  • There is high demand for skilled workers in many of the fast growing sectors in Western Canada, including mining, energy, construction, manufacturing and technology.
  • WD can complement the work of other federal departments in an effort to identify skills and training development opportunities.

What are the plans for meeting this priority?

  • Facilitate opportunities that bring together industry and organizations that deliver post-secondary training to explore partnerships and increase training capacity.
  • Support skills development and training projects focused on increasing the availability of equipment and implementing on-site training programs.
Priority Type Program(s)

Aboriginal Economic Growth

Previously committed to

Business Development and Innovation
Community Economic Growth
Policy, Advocacy and Coordination

Description – Engage and work with Aboriginal entrepreneurs and SMEs to identify opportunities for economic and skills development for Aboriginal people and communities.

Why is this a priority?

  • WD is committed to working with Aboriginal entrepreneurs and business leaders to accelerate opportunities for business development and growth.
  • Aboriginal Canadians are Canada's fastest growing and youngest population. Almost sixty percent of Canada's Aboriginal population lives in Western Canada.v This young, growing population holds tremendous potential for Aboriginal communities, cities across the West, and for Canada as a whole.
  • Some 32,000 Aboriginal people work in energy, mining and forestry jobs throughout Canada, making the natural resource sector a leading private sector employer of Aboriginal people.vi Natural resource development means more opportunities close to communities and traditional territories.
  • WD can support the principles of the Federal Framework for Aboriginal Economic Development vii to increase the participation of Aboriginal people in the Canadian economy.

What are the plans for meeting this priority?

  • Engage Aboriginal people across the West and key partners, including Aboriginal Affairs and Northern Development Canada, to identify opportunities for collaborative investment in support of economic development, such as strengthening Aboriginal business development and entrepreneurship.
  • Work with Aboriginal people across the West to partner with industry, other government departments, post-secondary institutions and other organizations to increase opportunities for Aboriginal skills development, particularly in the natural resource sector.
  • Provide funding to the Aboriginal Business Services Network and Aboriginal Community Futures organizations across Western Canada to enhance access to business information, services and training.
Priority Type Program(s)

Trade and Investment

Ongoing

Business Development and Innovation
Policy, Advocacy and Coordination

Description – Enhance SME participation in international business, particularly in emerging markets.

Why is this a priority?

  • Western Canada relies on international trade and investment to enhance its economic prosperity. Nearly one third of Western Canada's Gross Domestic Product is tied to international exports.viii
  • Supporting trade and investment helps SMEs to gain access to new markets, innovative ideas, technology and capital; which in turn contributes to increasing their competitiveness and productivity. This enables western Canadian SMEs to grow and prosper, and supports job creation.
  • The Government of Canada's Global Markets Action Plan ix is focusing its efforts on international markets that offer the greatest potential for Canadian business.

What are the plans for meeting this priority?

  • Assist western SMEs engaging in international business and increase their penetration in international markets, both in North America and emerging markets.
  • Improve trade corridors of importance to Western Canada to support the flow of goods, services and people into and out of Western Canada.
  • Raise awareness of Western Canada's key sectors, strengths and capabilities in international markets, especially emerging markets, and attract foreign investment to the region.
Priority Type Program(s)

Federal Defence Procurement

Previously committed to

Policy, Advocacy and Coordination
Business Development and Innovation

Description – Maximize the ability of western SMEs to capitalize on federal defence procurement opportunities.

Why is this a priority?

  • Canada's defence-related industries include more than 2,000 companies, 70,000 employees and $12.6 billion in annual revenues.x With industrial and technological benefit opportunities in Canada projected to grow from $23 billion in 2011 to $49 billion in 2027, there are significant economic opportunities for Western Canada.xi
  • Regional Development Agencies across Canada play an important role in supporting the implementation of the federal Defence Procurement Strategy xii by facilitating regional supplier and organization access to opportunities created by Canada's Industrial and Technological Benefits Policy.xiii

What are the plans for meeting this priority?

  • Work as a business facilitator to inform western Canadian stakeholders of federal defence procurement and what is required to successfully engage and maximize participation in global supply chains of prime contractors and key partners.
  • Strengthen the western Canadian aerospace, defence and marine sectors by identifying strategic investments that support innovation, international competitiveness and growth.
  • Support collaborative trade and investment opportunities, including sustained participation at international events and trade missions in the aerospace, defence and marine sectors as part of a unified Canadian presence.
  • Represent western interests to decision makers in the development of national policies and strategies relating to the federal procurement process, particularly the federal Defence Procurement Strategy, and the aerospace, defence and marine sectors.
Priority Type Program(s)

Revitalization of the Western Canada Business Services Network (WCBSN)

Previously committed to

Business Development and Innovation
Community Economic Growth

Description – Ensure WCBSN members are maximizing their economic impact in their communities and are aligned with Government of Canada and WD priorities.

Why is this a priority?

  • The WCBSN is a network of more than 100 offices supported by WD to provide business information and assistance, planning and implementation of community economic growth initiatives and loans to SMEs. The WCBSN includes several organizations, including Community Futures organizations, Women's Enterprise Initiative offices, Francophone Economic Development Organizations and members of the Canada Business Network.
  • There is an opportunity to strengthen WCBSN's programs and services to maximize their impact and realize their potential to be economic drivers in their communities, and for WCBSN members to unlock economic opportunities that are aligned with Government of Canada and WD priorities.

What are the plans for meeting this priority?

  • Continue to work with WCBSN members to strengthen the structures, governance, accountability and performance management needed to provide value-added offerings.
  • Work with the WCBSN to enhance its support and promotion of Government of Canada priorities and the implementation of activities that support sustainable economic growth.

1 Type is defined as follows: previously committed to — committed to in the first or second fiscal year prior to the subject year of the report; ongoing — committed to at least three fiscal years prior to the subject year of the report; and new — newly committed to in the reporting year of the RPP or DPR.

Risk Analysis


Key Risks

Risk Risk Response Strategies Link to Program Alignment Architecture

Declining competitiveness and slow productivity growth in Western Canada

Invest in projects that help increase business productivity and competitiveness.

Deliver the WINN Initiative to bring innovative technology-based products, processes and services to market.

Business Development and Innovation

Small domestic market and increasing global competition for western Canadian businesses

Work with western Canadian SMEs, industry associations and research institutes to improve access to global value chains.

Support projects leading to increased international market engagement of western Canadian SMEs.

Business Development and Innovation

Western Canada's businesses have limited competitiveness and slow productivity growth, due in part to comparatively low levels of investment in research and development and slower rates of adoption of new technologies and equipment, particularly outside of the major resource sectors. Innovative start-up firms in the West face greater challenges in accessing sufficient financing for technology commercialization priorities where a funding gap is particularly pronounced for early-stage firms. In 201516, WD will continue to invest in projects and activities that strengthen the development, commercialization and adoption of new technologies and business development.

Western Canadian businesses also face the challenge of a small domestic market and increasing global competition. Expanding trade and market opportunities for western Canadian businesses is an important component of economic prosperity. In order to remain competitive in a global economy, these businesses will need to increase their presence in international markets, participate in global value chains and attract foreign direct investment. In 201516, WD will continue to work with western Canadian SMEs, industry associations and research institutions to improve access to global value chains, strengthen international partnerships and encourage foreign direct investment, leading to enhanced international market access for western Canadian products and services.

Planned Expenditures

Budgetary Financial Resources (Planned Spending—dollars)

2015–16
Main Estimates
2015–16
Planned Spending
2016–17
Planned Spending
2017–18
Planned Spending
159,913,914 159,913,914 155,398,551 154,466,397

Human Resources (Full-Time Equivalents2FTEs)

2015–16 2016–17 2017–18
306 292 290

Budgetary Planning Summary for Strategic Outcome and Program(s) (dollars)

Strategic Outcome(s), Program(s) and Internal Services 2012–13
Expenditures
2013–14
Expenditures
2014–15
Forecast Spending
2015–16
Main Estimates
2015–16
Planned Spending
2016–17
Planned Spending
2017–18
Planned Spending
Strategic Outcome 1: A growing and diversified western Canadian economy

Program 1: Business Development and Innovation

117,571,416 98,912,661 109,820,012 100,520,050 100,520,050 98,374,079 97,094,230

Program 2: Community Economic Growth

35,377,579 62,155,737 31,689,532 34,862,792 34,862,792 33,393,025 32,622,197

Program 3: Policy, Advocacy and Coordination

8,538,591 9,306,314 8,725,206 10,145,094 10,145,094 10,898,859 10,956,490

Subtotal

161,487,586 170,374,712 150,234,750 145,527,936 145,527,936 142,665,963 140,672,917

Internal Services
Subtotal

22,230,897 17,953,579 14,115,207 14,385,978 14,385,978 12,732,588 13,793,480

Total

183,718,483 188,328,291 164,349,957 159,913,914 159,913,914 155,398,551 154,466,397

WD's planned spending in 2015–16 is $159.9 million, compared to the 2014-15 forecast spending of $164.3 million. The $4.4 million decrease in net spending includes a decrease in both transfer payments and operating costs. Factors contributing to the net decrease include:

  • A decrease of $2.5 million attributed to reinvestment of receipts from repayable contributions and funding support to the Rick Hansen Foundation;
  • A decrease of $1.0 million in transfer from Agriculture and Agri-food Canada related to the Canadian Beef Centre of Excellence; and
  • A net decrease of $0.9 million related to operating budget carry forward, timing differences in accommodation funding and other program funding changes.

2 "Full-time equivalent" (FTE) is a measure of the extent to which an employee represents a full person-year charge against a departmental budget. FTEs are calculated as a ratio of assigned hours of work to scheduled hours of work. Scheduled hours of work are set out in collective agreements.

Alignment to Government of Canada Outcomes

2015-16 Planned Spending by Whole-of-Government-Framework Spending Area xiv

Strategic Outcome Program Spending Area Government of Canada Outcome 2015-16 Planned Spending(dollars)
1. A growing and diversified western Canadian economy 1.1 Business Development and Innovation Economic Affairs Strong economic growth 100,520,050
1.2 Community Economic Growth Economic Affairs Strong economic growth 34,862,792
1.3 Policy, Advocacy and Coordination Economic Affairs Strong economic growth 10,145,094

Total Planned Spending by Spending Area (dollars)

Spending Area Total Planned Spending
Economic Affairs 145,527,936
Social Affairs 0
International Affairs 0
Government Affairs 0

Departmental Spending Trend

Departmental Spending Trend Graph
Departmental Spending Trend Graph
2012–13 2013–14 2014–15 2015–16 2016–17 2017–18
Sunset Programs - Anticipated 23,100 25,657 0 0 0 0
Statutory 10,184 5,168 4,116 4,186 3,995 3,963
Voted 150,434 157,503 160,234 155,728 151,404 150,503

The decreases in net spending are related to both transfer payments and operating costs. The Community Infrastructure Improvement Fund program under Canada's Economic Action Plan was a two year program that sunset in 2013–14.

Estimates by Vote

For information on WD's organizational appropriations, consult the 2015–16 Main Estimates xv on the Treasury Board of Canada Secretariat website.