Western Economic Diversification Canada
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Section 7: Conclusions and Recommendations

7.1 Conclusions

Combining results from all lines of evidence collected during this evaluation led to the following conclusions by core issue.

Relevance

Evidence. Respondents indicated that the Business Productivity and Growth programming fills an important gap by funding small and medium enterprises (SMEs) to attract and retain skilled labour through improved access to capital, management training, building capacity and strengthening collaboration across stakeholders. Research shows Canada underperforms in terms of productivity, that SMEs play an important role in the Canadian economy and would benefit from assistance in this area. Moreover, Canadians support federal government assistance to SMEs. Key informants agreed that WD assistance to SMEs aligns with federal government responsibilities related to prosperity, economic growth and job creation. There are a large number of federal and provincial programs available to western Canadian SMEs. The evaluation found that the department’s programming does not overlap or duplicate other similar programs and effectively meets proponent needs.

Suggested improvements. The literature and the interviews support the relevance and ongoing need for Business Productivity and Growth programming. The department can continue to review the literature and programs of other organizations and departments to identify best practices to improve the programming and to better meet the needs of western Canadian SMEs. The evaluation identified some best practices such as focusing on high growth businesses, increasing the adoption of advanced technology and promoting international trade.

Performance: Achievement of Expected Outcomes

Evidence. The interviews and departmental impact assessments show that WD’s projects are realizing short term results related to creating/maintaining/expanding businesses, job creation and skills development. The projects also helped other participants to improve market share/competitive position, obtain information for future endeavours and form partnerships or contracts.

Performance information reported to WD indicated that most completed projects met or exceeded their target expectations. Within the period of the evaluation, about 3,398 businesses were created, maintained and/or expanded exceeding set targets. Reasons for completed projects not meeting or only partially meeting targets include unforeseen delays, poor project administration or in the case of one project, inclement weather.

Progress reports from projects that were in progress indicated that these projects were on course to either meet or exceed their target expectations. Client satisfaction with projects that involved participation in and/or delivery of community workshops, seminars, presentations and special events ranged from 76% to 100% exceeding set targets.

Although it is too early or not possible to measure longer term impacts, the literature confirms the link between the short term outcomes and positive longer term impacts related to strengthening western Canadian SMEs and diversifying the economy.

Success factors included partnering and collaboration with industry and other organizations, aligning with provincial priorities, the rigorous project assessment and due diligence process and the flexibility in both type and implementation of projects. Factors constraining success included limited timeframes to complete project and the more recent narrower focus on skills development to the exclusion of support for other types of business productivity and growth projects.

The evaluation found the quality of the performance measurement data and the risk management strategy to be appropriate. However, some limitations were identified with respect to measuring the performance of business productivity and growth projects: 83 of the 87 projects used sub-program rather than program level indicators which measure longer term impact; and there are 165 unique indicators that cannot be aggregated to tell a performance story. With respect to risk, the department tends to fund lower risk projects with 78% of the 87 projects assessed as low risk.

Suggested improvements. The projects are realizing short term objectives and the department can continue with processes that are working well such as partnering and collaboration with industry and other organizations, aligning with provincial priorities, the rigorous project assessment and due diligence process and the flexibility in both type and implementation of projects. The department can improve performance measurement by encouraging staff to identify program level indicators which report on longer term outcomes and minimize the use of unique indicators.

Performance: Demonstration of Efficiency and Economy

Evidence. The department has adopted an efficiency indicator for Business Productivity and Growth, which is stated as “operating costs per $1,000 in Grants and Contributions (Gs&Cs) expended. The total Gs&Cs invested by the department in Business Productivity and Growth was $23,390,759 in 2013–14. Operating expenditures for the period was $3,060,317 resulting in an efficiency indicator of $131. The department therefore spends roughly 13.1% of its budget to deliver $1000 of programming in Business Productivity and Growth. The projects leveraged $1.67 per dollar of departmental Grants and Contributions (G&C) funding. The projects reporting outcomes during the study period cost $7,953 in G&C funding per business created, maintained, or expanded and $2,206 per job created or maintained. The completed projects also generated $26.00 in increased sales per dollar cost. These measures compare favourably with those for similar federal programs.

Although the programming is well delivered, there remain opportunities to continue to make it more flexible and responsive. The new call for proposal process improves response times, however, 29% of interviewees see disadvantages in terms of intake periods which are not predictable, limited communication between staff and applicants and the tendency to fund existing sectors rather than emerging riskier sectors (e.g., new media, clean energy).

The literature reveals other potential improvements or best practices including: 1) focusing on high growth businesses; 2) increasing the adoption of advanced technology; and 3) promoting international trade.

Suggested improvements. To potentially improve the call for proposal process, the department can explore ways to work with applicants earlier in the proposal application process to reduce time spent in preparing proposals. The department can also review the programming to identify further opportunities to adopt best practices and increase programming impacts related to business growth, technology adoption and international trade and explore opportunities to support projects focusing on high growth businesses and emerging sectors.

7.2 Recommendations

Although the evaluation concludes that Western Economic Diversification’s programming with respect to Business Productivity and Growth is in large part well delivered and achieving short term objectives, the evaluation also identifies possible improvements to enhance the efficiency and effectiveness of delivery and to strengthen achievement of longer term outcomes. The following recommendations are based on evidence gathered and conclusions discussed in this study:

  1. The department should continue to identify and adopt best practices to enhance the ongoing relevance of the business productivity and growth programming.
     
  2. The department should improve how it measures and reports on longer term outcomes in order to enhance the business productivity and growth programming’s ability to tell its performance story.
     
  3. The department should review its business productivity and growth programming to improve flexibility and responsiveness.