Western Economic Diversification Canada
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Section II: Analysis of Programs by Strategic Outcome

Strategic Outcome: A growing and diversified western Canadian economy

Western Economic Diversification Canada (WD) works to develop and diversify the western Canadian economy, helping to build businesses that are innovative and competitive, while diversifying the base of the western Canadian economy beyond primary resource industries.

WD's strategic outcome is advanced through the following programs:

  • Business Development and Innovation: Western Canadian small and medium-sized enterprises (SME) are engaged in international business and are competitive and innovative;
  • Community Economic Growth: Western Canadian communities have strong businesses, the capacity for socio-economic development and the necessary public infrastructure to support economic growth;
  • Policy, Advocacy and Coordination: Policies and programs that strengthen the western Canadian economy; and
  • Internal Services: Effective and efficient support for advancing the department's strategic outcome.

WD sets targets annually for all performance indicators at the program and sub-program level in the departmental Performance Measurement Framework (PMF).  Progress is tracked against targets based primarily upon results that Grants and Contributions projects report during the fiscal year.  In addition, WD collects information on several non-PMF performance indicators to support accountability and programming decision-making.

WD also utilizes a number of economic indicators to gauge the competitiveness, growth and diversity of the western Canadian economy.  The chart below outlines Western Canada's performance across four economic indicators over the past five years. As a benchmark, Canada's performance in these indicators is included.

The results show strong economic growth in Western Canada for a fifth consecutive year following the downturn in 2009.  Over the past five years, growth in Western Canada's real Gross Domestic Product (GDP) exceeded that of Canada.  In 2014, real GDP growth in Western Canada was 3.2 percent compared to 2.4 percent for Canada.  Towards the end of the year, however, the western Canadian economy lost some momentum, as the impact of lower commodity prices started to dampen economic activity. It is expected that lower commodity prices will continue to be an economic drag on the western economy in the coming year.

Performance Measurement
Performance Indicators[viii] 2010 2011 2012 2013 2014 (Preliminary)
Real GDP growth Canada 3.4% 3.0% 2.0% 2.1% 2.4%
West 4.0% 4.4% 3.4% 3.3% 3.2%
Labour productivity growth (change in real GDP per hour worked) Canada 1.6% 1.6% 0.4% 1.2% Data not available
West 2.6% 2.3% 0.3% 1.9%
Primary production as a percentage of GDP Canada 9.5% 9.7% 9.6% 9.9% 10.1%
West 19.7% 19.8% 19.7% 20.0% 20.3%
Gross Domestic Expenditures on Research and  Development (R&D) as percentage of GDP Canada 1.8% 1.8% 1.7% 1.6% Data not available
West 1.2% 1.2% 1.1% Data not yet available

Despite the economic strength of Western Canada, challenges remain with respect to Gross Domestic Expenditures on R&D as a percentage of GDP which are consistently lower in Western Canada when compared to that of Canada.  In 2014, primary production as a percentage of GDP was 20.3 percent in Western Canada as compared to 10.1 percent for Canada owing to the predominance of the natural resources sector in the western provinces.  The region's challenge relating to R&D expenses as a percentage of GDP may be in part due to Western Canada's traditional strengths in primary production which have been less R&D intensive than, for example, manufacturing.