Western Economic Diversification Canada
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Report on Plans and Priorities 2016-17

Section I: Organizational Expenditure Overview

Organizational Profile

Appropriate Minister:

Minister of Innovation, Science and Economic Development:

The Honourable Navdeep Bains, P.C., M.P.

Institutional Head:

Daphne Meredith

Ministerial Portfolio:

Innovation, Science and Economic Development

Enabling Instrument:

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

Year of Commencement:

1987

Other:

On August 4, 1987, Western Economic Diversification Canada was created as a special operating agency and officially became a federal department through the Western Economic Diversification Act, which came into force June 28, 1988.

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 Innovation, Science and Economic Development 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 with business and community organizations, research and academic institutions, Indigenous Peoples, as well as provincial and municipal governments across Western Canada. WD also works with other Regional Development Agencies (RDAs) to make strategic investments that build on competitive regional advantages. These connections enable WD to identify and support economic opportunities and diversification 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 economic and policy environment.

WD focuses its activities in three program areas:

Business Development and Innovation: WD supports small and medium-sized enterprises (SMEs) to become more productive, more innovative and more export-oriented. 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 defence procurement. Further, WD promotes the development and growth of the knowledge-based economy by building innovation capacity by addressing gaps in technology skills capacity and supporting the commercialization of new knowledge-based products, processes and services.

Community Economic Growth: WD helps rural and urban 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.

In addition to making strategic and targeted investments in Western Canada that support regional economic development and inclusive economic growth, WD provides value- added services to western Canadian stakeholders by:

  • Building strategic relationships with key decision makers across Canada, including other levels of government, and works with western Canadian industry on defence, security, aerospace and marine-related procurement opportunities.
  • Playing the role of intelligence gatherer and strategic advisor on economic development issues and opportunities of relevance to Western Canada.
  • Convening key players in the marketplace and in communities to discuss shared collaboration and economic opportunities and promote alignment of complementary government programs.
  • Serving as a delivery agent for national programming in Western Canada, such as the Canada 150 Infrastructure Program.
  • Advising and pathfinding clients to other federal programs which match their business interests and needs.

Strategic Outcome and Program Alignment Architecture

The Program Alignment Architecture 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.

1. 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 2016–17, Western Economic Diversification Canada (WD) will contribute to the Government of Canada's commitment to spur both inclusive and targeted economic growth, job creation, and broad-based prosperity by delivering on key priorities identified in the Ministers' mandate letters. These priorities are consistent with WD's mandate to develop and diversify the western Canadian economy.

Priority: Innovation

Description

Participate in the development of a Government of Canada Innovation Agenda by supporting the emerging national network for business innovation and cluster support and investing in key growth sectors, including clean technology, where Western Canada has the ability to attract investment or grow export-oriented companies.

Priority Type1

Ongoing

Key Supporting Initiatives
Planned Initiatives Start Date End Date Link to Department's Program Alignment Architecture
  • Launch an intake of the Western Innovation Initiative to assist small and medium-sized businesses in Western Canada to move their new and innovative technologies from later stages of research and development (R&D) into the marketplace and ensure that scientific effort is translated into commercial success.
April 2016 March 2017 1.1.3 Innovation Capacity Building

1.1.4 Technology Commercialization
  • Launch an intake of the Western Diversification Program to support not-for-profit organizations to promote technology commercialization, innovation capacity building and the development of a pool of highly qualified personnel in support of western Canadian innovation.
April 2016 March 2017 1.1.3 Innovation Capacity Building

1.1.4 Technology Commercialization
  • Support the Western Canada Business Service Network, which provides services to small and medium-sized businesses across Western Canada.
Ongoing Ongoing 1.1.4 Technology Commercialization
  • Convene industry, post-secondary institutions, major research facilities and governments to facilitate the advancement of innovation policy and to identify new innovation models that foster R&D and support the transition of new technologies into commercialization opportunities, including support for the emerging national network for business innovation and cluster support.
April 2016 March 2017 1.3 Policy, Advocacy and Coordination

[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 the DPR. If another type that is specific to the department is introduced, an explanation of its meaning must be provided.

Priority: Trade and Investment

Description

Build on Western Canada's competitive advantages through initiatives that help western businesses increase their exports, expand the range of their trading partners, prepare for and capitalize on new trade agreements.

Priority Type

Ongoing

Key Supporting Initiatives
Planned Initiatives Start Date End Date Link to Department's Program Alignment Architecture
  • Launch an intake of the Western Diversification Program to support not-for-profit organizations to help small and medium-sized businesses in Western Canada to increase their exports, expand their range of trading partners and adjust to, take advantage of, and prepare for the implementation of new trade agreements
April 2016 March 2017 1.1.1 Trade, Investment and Market Access
  • Support the members of the Western Canada Business Service Network to help small and medium-sized businesses access government financing and export-oriented supports.
April 2016 April 2017 1.1.1 Trade, Investment and Market Access
  • Raise awareness of Western Canada's key sectors (e.g., clean technology), strengths and capabilities in international markets and attract foreign investment and tourism to rural and urban communities.
April 2016 March 2017 1.3.1 Advocacy and Coordination
Priority: Indigenous Economic Growth

Description

Support initiatives that promote economic development and create jobs for Indigenous Peoples.

Priority Type

Previously committed to

Key Supporting Initiatives
Planned Initiatives Start Date End Date Link to Department's Program Alignment Architecture
  • Provide funding to the Aboriginal Community Futures organizations and revitalized Aboriginal Business Services Network in Western Canada to enhance access to business information, services and training, and to strengthen the economic capacity of rural communities.
Ongoing Ongoing 1.1.2 Business Productivity and Growth

1.2.3 Community Futures Program
  • Launch an intake of the Western Diversification Program and identify opportunities for collaborative investment in support of small business development, economic development and capacity building through skills development for Indigenous Peoples in industries experiencing labour shortages.
April 2016 March 2017 1.1 Business Development and Innovation
  • Increase awareness among Indigenous communities of business opportunities and support capacity to respond.
April 2016 March 2017 1.3.1 Advocacy and Coordination
Priority: Defence Procurement

Description

Enhance defence, aerospace and marine procurement related opportunities to create jobs and economic growth in Western Canada.

Priority Type

Previously committed to

Key Supporting Initiatives
Planned Initiatives Start Date End Date Link to Department's Program Alignment Architecture
  • Launch an intake of the Western Diversification Program and make strategic investments to strengthen the western Canadian aerospace, defence and marine sectors.
April 2016 March 2017 1.1 Business Development and Innovation
  • Inform western Canadian stakeholders of procurement opportunities, including what is required to successfully participate in the global supply chains of prime contractors and key partners, and increase global awareness of Western Canada's aerospace, defence and marine sectors as part of a unified Canadian presence.
April 2016 March 2017 1.3.1 Advocacy and Coordination
  • Convene stakeholders from industry, post-secondary, major research facilities and government to facilitate policy discussions and support business interactions.
April 2016 March 2017 1.3.1 Advocacy and Coordination

For more information on organizational priorities, see the Ministers' mandate letters on the Prime Minister of Canada's website.

Risk Analysis

Key Risks
Risk Risk Response Strategies Link to Program Alignment Architecture
Declining competitiveness and low productivity
  • Invest in projects under the Western Diversification Program and Western Innovation Initiative that improve Business Development and Innovation.
  • Convene stakeholders to facilitate policy discussions and support business interactions.
  • Strengthen stakeholder engagements to promote innovation and skills development and training in Western Canada.
Business Development and Innovation
Small domestic market and increasing global competition facing western Canadian businesses
  • Invest in projects that increase the capacity of western small and medium-sized enterprises (SMEs) to enter international markets, enhance western trade corridors and raise international awareness of western Canadian goods, services and technologies.
  • Collaborate with partners and stakeholders, including the other Regional Development Agencies, in an effort to increase international market engagement.
Business Development and Innovation

The western Canadian economy accounts for over one third of Canada's economic output, and over 30 percent of all Canadians reside in Western Canada. Due to the size of the western Canadian economy, opportunities and challenges in Western Canada have a significant impact on national economic performance.

Economic growth and prosperity for Western Canada continues to be largely resource-driven and has benefitted from prolonged periods of high demand and prices for commodities. However, the economy has lost some momentum as commodity prices, and oil prices, in particular, have declined and dampened Western Canada's economic outlook. While natural resources have provided a strong foundation for economic growth, the resource-driven economy has masked a number of fundamental challenges facing Western Canada's long-term economic prospects. With expectations of persistently low commodity prices, these challenges are likely to become more apparent.

Compared to Western Canada's competitors, businesses in Western Canada suffer from weak competitiveness and low productivity, due in part to comparatively low levels of business investment in research and development and slower rates of adoption of new technologies and equipment. This is partly due to low levels of risk capital financing observed in Western Canada. Innovative start-up firms face greater challenges in accessing sufficient financing for technology commercialization priorities; this funding gap is particularly pronounced for early-stage firms. In 2016–17, Western Economic Diversification Canada (WD) will continue to invest in projects and activities that help businesses increase their productivity and competitiveness through the development, commercialization and adoption of new technologies and business processes.

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, western Canadian businesses will need to increase their presence in international markets, participate in global value chains and attract foreign direct investment. 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, in order to enhance access to international markets for western Canadian products and services.

Planned Expenditures

Budgetary Financial Resources (dollars)
2016–17
Main Estimates
2016–17
Planned Spending
2017–18
Planned Spending
2018–19
Planned Spending
173,391,536 173,391,536 172,658,701 143,478,701

Human Resources (Full-Time Equivalents [FTEs])
2016–17 2017–18 2018–19
287 285 285

Budgetary Planning Summary for Strategic Outcome and Program(s) (dollars)
Strategic Outcome(s), Program(s) and Internal Services 2013-14 Expenditures 2014-15 Expenditures 2015-16 Forecast Spending 2016-17 Main Estimates 2016-17 Planned Spending 2017-18 Planned Spending 2018-19 Planned Spending
Strategic Outcome 1: A growing and diversified western Canadian economy
Program 1: Business Development and Innovation 98,912,661 107,678,368 101,021,948 95,135,450 95,135,450 94,352,960 90,022,045
Program 2: Community Economic Growth 62,155,737 31,958,193 34,044,377 57,322,492 57,322,492 57,141,987 32,668,977
Program 3: Policy, Advocacy and Coordination 9,306,314 8,736,194 9,078,335 8,414,266 8,414,266 8,195,025 8,381,502
Subtotal 170,374,712 148,372,755 144,144,660 160,872,208 160,872,208 159,689,972 131,072,524
Internal Services Subtotal 17,953,579 13,629,781 15,133,621 12,519,328 12,519,328 12,968,729 12,406,177
Total 188,328,291 162,002,536 159,278,281 173,391,536 173,391,536 172,658,701 143,478,701

Western Economic Diversification Canada's planned spending in 2016–17 is $173.4 million, compared to the 2015-16 forecast spending of $159.3 million. The $14.1 million increase in net spending includes an overall increase in transfer payments and decrease in operating costs. Factors contributing to the net increase include:

  • An increase of $23.1 million related to funding for the Canada 150 Infrastructure Program.
  • An increase of $0.6 million related to the annual amount set aside for the Thirty Meter Telescope, the world's largest telescope.
  • A decrease of $3.9 million related to operating budget carry forward, funding related to delivery of programs on behalf of Infrastructure Canada, and other operating adjustments.
  • A decrease of $2.5 million attributed to the timing of reinvestment of receipts from repayable contributions.
  • A decrease of $2.0 million related to funding transfers from Royal Canadian Mounted Police and Agriculture and Agri-Food. Canada for specific projects concluding in 2015-16.
  • A decrease of $1.2 million in funding for the Rick Hansen Foundation.

Alignment of Spending With the Whole-of-Government Framework

Alignment of 2016-17 Planned Spending With the Whole-of-Government Framework (dollars)
Strategic
Outcome
Program Spending Area Government of
Canada Outcome
2016-17
Planned Spending
(dollars)
1. A growing and
diversified western
Canadian economy
1.1 Business Development and Innovation Economic Affairs Strong economic growth 95,135,450
1.2 Community Economic Growth Economic Affairs Strong economic growth 57,322,492
1.3 Policy, Advocacy and Coordination Economic Affairs Strong economic growth 8,414,266

Total Planned Spending by Spending Area (dollars)
Spending Area Total Planned Spending
Economic Affairs 160,872,208
Social Affairs 0
International Affairs 0
Government Affairs 0

Departmental Spending Trend

Departmental Spending Trend

The increase in sunset programs in years 2016-17 and 2017-18 relate to the Canada 150 Infrastructure Program. The decreases in net spending are related to both transfer payments and operating costs. The Community Infrastructure Improvement Fund was a two year program that sunset in 2013–14.

Estimates by Vote

For information on Western Economic Diversification Canada's organizational appropriations, consult the 2016–17 Main Estimates.