Western Economic Diversification Canada
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Section III : Analysis of Programs and Internal Services

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.

In 2015–16, WD's strategic outcome was advanced through three programs: Business Development and Innovation; Community Economic Growth; and Policy, Advocacy and Coordination, with focused efforts in six priority areas.

WD sets targets annually for all performance indicators at the program and sub-program level in the departmental Performance Measurement Framework (PMF). xvii 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.

Programs

Program 1.1: Business Development and Innovation

Description

Business Development and Innovation supports western Canadian businesses, industry, and research organizations to enhance business innovation, productivity, and global engagement. Value-added production is strengthened through the introduction of new products, technologies, or innovations to existing processes, as well as through efforts to pursue global markets and increase investment in Western Canada. Additionally, this program supports some members of the Western Canada Business Service Network and related partners to provide business services and access to capital in Western Canada in support of increased entrepreneurism. Transfer payments in support of this program are made under the authority of the Women's Enterprise Initiative and the Western Diversification Program. Funding support of the Canada Business Network is comprised of operations and maintenance funding.

Program Performance Analysis and Lessons Learned

WD tracks three indicators to capture the impact of the Business Development and Innovation program: value of international business activity facilitated by WD; number of small and medium-sized enterprises (SME) that increase gross margins; and number of instances of protection of intellectual property exercised.

In 2015-16, the target for value of international business activity facilitated by WD indicator was $325 million and the actual result was $550 million. The target for number of instances of protection of intellectual property exercised was 30 and the actual result was 9. For these two indicators, the variance is due to the multi-year nature of funded projects with results sometimes being realised or reported earlier or later than anticipated.

The target for the remaining indicator which captures the number of SMEs that increase their gross margins was 514 and the actual result was 10. The variance for this indicator is attributable to a project which set a target of 505, but is not reporting results yet as commercialization is taking longer than anticipated.

In addition, WD funding in 2015–16 resulted in 782 skilled workers being hired as a result of training or skills certification, 621 highly qualified personnel (HQP) trained and $38 million of sales tied to knowledge-based products, processes, services or technologies being commercialized.xviii

In 2015–16, WD approved $73.0 million in assistance for 76 Business Development and Innovation projects. This included projects supported under the Western Diversification Program (WDP)xix and the Western Innovation (WINN) Initiative.xx

Under WDP, WD approved 55 projects with not-for-profit applicants, providing $51.9 million in assistance to strategically invest in Western Canada's innovation eco-system, strengthen western Canadian SMEs' engagement in international markets, and improve access to skilled labour. In 2015–16, the Department refined its program parameters, application form and applicant guide for the second intake of WDP, and provided greater clarity to assist applicants in submitting stronger, more targeted project proposals. WDP projects cover a range of sectors including agri-food, life sciences, information and communications technologies, aerospace and defence, and tourism.

WD also approved 21 projects under WINN, providing $21.0 million in assistance to western Canadian SMEs to commercialize new innovative products, processes and services. These projects build upon competitive regional advantages by covering a range of sectors outside traditional areas of strength, including clean technology, information communication technologies, health and life sciences.

In order to attract foreign investment to the West, WD has been working closely with Global Affairs Canada as they roll out the Invest in Canada Office and a new Trade Promotion Strategy. WD acted as a convenor with Regional Development Agencies on Trade and Investment and participated in initiatives led by Global Affairs Canada, including meetings with senior officials on the Invest in Canada Office. In addition, WD attended the Northern Labour Market Forum in LaRonge, Saskatchewan in November 2015 to meet with key regional stakeholders on international trade and Indigenous economic development issues.

In 2015–16, WD continued to revitalize the Western Canada Business Service Network (WCBSN),xxi specifically focusing on the Francophone Economic Development Organizations (FEDO). The WCBSN also strengthened their efforts to enhance the business productivity, competitiveness and growth of western Canadian SMEs. WD worked with the Canada Business Network (CBN) service centres in Western Canada to implement a new national performance measurement and evaluation strategy for the CBNs to strengthen reporting on results.

The Department completed an evaluation of its Business Productivity and Growth programming.xxii The evaluation concluded that the programming fills an important gap by funding SMEs to attract and retain skilled labour through improved access to capital, management training, building capacity and strengthening collaboration across stakeholders. Clients reported that funded projects provided training opportunities and created jobs. The evaluation provided three recommendations for the Department:

  1. Continue to identify and adopt best practices to enhance the ongoing relevance of the business productivity and growth programming;
  2. Improve how WD measures and reports on longer term outcomes in order to enhance the business productivity and growth programming's ability to tell its performance story; and
  3. Review WD's business productivity and growth programming to improve flexibility and responsiveness.

WD has developed a Management Response Action Plan to address these recommendations.

Budgetary Financial Resources (dollars)
2015-16
Main Estimates
2015-16
Planned Spending
2015-16
Total Authorities Available for Use
2015-16
Actual Spending
(authorities used)
2015-16
Difference
(actual minus planned)
100,520,050 100,520,050 104,690,346 97,298,416 (3,221,634)

 

Human Resources (Full-Time Equivalents [FTEs])
2015–16
Planned
2015–16
Actual
2015–16
Difference
(actual minus planned)
111 99 (12)

Note: Actual FTE utilization is lower than planned as a result of a departmental strategy to review and streamline functions to improve efficiencies for future years.

Performance Results
Expected Result Performance Indicators Targets Actual Results
Western Canadian SMEs are engaged in international business Value of international business activity facilitated by WD $325 million $550 million
Western Canadian SMEs are competitive Number of SMEs that increase gross margins 514 10
Western Canadian SMEs are innovative Number of instances of protection of intellectual property exercised 30 9

Program 1.2: Community Economic Growth

Description

Community Economic Growth involves economic development initiatives that support communities to advance their economies, adjust to changing and challenging economic circumstances, and recover from depressed economic circumstances. This is achieved through both direct funding of projects, as well as funding support of the Community Futures (CF) organizations. Additionally, this program assists communities to assess community strengths, weaknesses, opportunities, and potential for new economic activity, and to develop and implement community plans. Transfer payments in support of this program are made under the authority of the Western Diversification Program and the Community Futures Program.

Program Performance Analysis and Lessons Learned

WD tracks three indicators to capture the impact of the Community Economic Growth program: SME sales growth; number of communities benefitting from Community Economic Growth projects; and number of communities benefitting from federal public infrastructure investments.

In 2015–16, WD nearly met or exceeded actual results against two targets set for the indicators related to the Community Economic Growth program. The target for SME sales growth indicator was 10.0% and the actual result was 9.9%. The target for number of communities benefitting from Community Economic Growth projects was 1175 and the actual result was 1468. For the infrastructure indicator, the target and actual result are not applicable (n/a) this year; results are expected starting next year.

WD continued to support Indigenous skills and business development in West Coast energy by serving as delivery agent for six projects that were previously approved for $4 million under the Strategic Partnerships Initiative (SPI). An additional $4.0 million of SPI funding was approved to deliver a new BC Indigenous Clean Energy Initiative (BC ICEI). BC ICEI will support Indigenous economies and communities through clean energy project development, businesses and job creation, additional direct investment and increasing ownership, revenue sharing and local employment through assessment and environmental monitoring activities.

In addition, WD continued to support official language minority communities in Western Canada under the Government of Canada's strategy for official languages Roadmap for Canada's Official Languages (2013–2018)xxiii by approving six new Economic Development Initiative (EDI)xxiv projects in 2015–16, totalling $1.2 million in WD funding. The projects support the economic development capacity of francophone communities through enhanced training programs, tourism services and business incubators for francophone entrepreneurs.

CFsxxv continued the implementation of CF Revitalization decisions under the 3-year Contribution Agreements issued to the majority of Western CFs. The revitalized CF network continues to focus on supporting activities which maximize the economic impact of CF members in Western Canada and align with Government of Canada and WD priorities. New this year was the launch of the WD Web Portal which allows CFs to upload target and quarterly reporting data directly to WD through an online interface.

A 2015–16 analysisxxvi of data submitted by CFs regarding their clients, compared to similarly sized and located companies contained in Statistics Canada's database, demonstrated strong performance by CFs in prior years:

  • Employment Growth: In terms of employment, CF assisted firms grew at a compounded rate of 7.7 percent per year compared to 2.2 percent for non-assisted firms from 2008 to 2013.
  • Sales Growth: In terms of sales, CF assisted firms grew at a compounded rate of 9.9 percent compared to 3.7 percent for non-assisted firms from 2008 to 2013.
  • Firm Longevity: CF assisted firms exhibited stronger firm longevity than firms in the comparable group, especially in the long run. There was a 66 percent survival rate after five years for CF assisted businesses versus 45 percent for non-assisted.
  • Industry Diversification: CF organizations are lending to a slightly less diversified client base than the comparable group.

In May 2015, WD launched a call for proposal process to invite applications for the Canada 150 Community Infrastructure Program and approved 469 projects totalling $46.1 million. The Canada 150 Community Infrastructure Programxxvii is part of Canada 150 Celebrates,xxviii the Government of Canada's celebration of our country's 150th anniversary of Confederation. Budget 2015 provided $150 million over two years to Canada's Regional Development Agencies to deliver further community funding across the country starting in 2016–17. WD is responsible for administering the program in Western Canada.

Budgetary Financial Resources (dollars)
2015-16
Main Estimates
2015-16
Planned Spending
2015-16
Total Authorities Available for Use
2015-16
Actual Spending
(authorities used)
2015-16
Difference
(actual minus planned)
34,862,792 34,862,792 35,071,380 35,240,300 377,508

 

Human Resources (FTEs)
2015–16
Planned
2015–16
Actual
2015–16
Difference
(actual minus planned)
35 38 3

 

Performance Results
Expected Result Performance Indicators Targets Actual Results
Western Canadian communities have strong businesses SME sales growth 10.0% 9.9%*
Western Canadian communities have capacity for socio-economic development Number of communities benefitting from Community Economic Growth projects 1,175 1,468
Western Canadian communities have the necessary public infrastructure to support economic growth Number of communities benefitting from federal public infrastructure investments n/a n/a

* From 2008 to 2013, CF assisted firms grew at a compounded rate of 9.9 percent compared to 3.7 percent for non-assisted firms. Results based on the latest available Round Six (2008–13) data provided by the Centre for Special Business Projects, Statistics Canada, July 2016.

Program 1.3: Policy, Advocacy and Coordination

Description

Policy, Advocacy, and Coordination arises from the Western Economic Diversification Act and empowers the Minister to advance the interests of Western Canada through policies and programs and by establishing cooperative relationships with key stakeholders. Policy, Advocacy and Coordination efforts enable WD to: provide a strong voice for Western Canada, which results in effective strategies, policies, and programs that address economic development needs; lead federal and intergovernmental collaboration to pursue key opportunities for long-term growth and diversification in areas of federal or shared federal-provincial jurisdiction; and, enable economic analysis activities to be carried out, which ultimately assist with informing policy and program decisions. Transfer payments in support of this program are made under the authority of the Western Diversification Program.

Program Performance Analysis and Lessons Learned

WD continually refines and focuses its Policy, Advocacy and Coordination (PAC) program to meet the changing priorities of western Canadians. Through economic analysis, as well as engagement with key partners and stakeholders, WD works to ensure that its priorities continue to be well-aligned with specific needs of the business community in Western Canada. Based on the latest March 2014 PAC surveyxxix sent to key stakeholders, over 80% of key informants held the opinion that WD activities resulted in policies or programs that supported economic development in Western Canada and that the Department needed to enhance its communication efforts and better inform stakeholders of departmental activities and success stories.

In 2015–16, WD coordinated 29 economic development initiatives, programs and policies and engaged in 27 initiatives that enhanced access to procurement opportunities for western Canadian SMEs.xxx

Through its advocacy and coordination role, WD has succeeded in bringing together key stakeholders to respond to growing economic opportunities in Western Canada. For example, in April 2015, WD hosted the second Western Innovation Forum (WIF)xxxi in Vancouver, British Columbia in collaboration with the Canadian Association of Defence and Security Industries, Mitacs, and the Canadian Commercial Corporation. This industry-oriented event connected Western Canada's aerospace, marine, defence, and security industries to innovation-driven investment, partnership and business opportunities. The event attracted more than 600 participants representing over 350 organizations. It included an Innovation Marketplace to highlight federal and provincial innovation support programs, an Innovation Showcase demonstrating new technologies, and facilitated more than 270 Business-to-Business and Business-to-Government meetings. Based on a survey, 97.2 percent of participants found the event met or exceeded expectations, and 100 per cent said that based on their experience, they will attend future WD events.

In order to enhance access to capital capacity in Western Canada, WD convened an Access to Capital discussion with public sector stakeholders, in conjunction with the Banff Venture Forum, in September 2015. The discussion served to enhance the understanding of each other's programs and services and to deepen understanding of the access to capital challenges faced by SMEs in Alberta and Western Canada. Participants appreciated the opportunity to meet each other, to talk about the changing economic environment impacting SMEs, and to continue to work together to ensure SMEs have the financing they need to grow and flourish.

In June 2015, WD approved the establishment of a "single-window" Foreign Trade Zone (FTZ) in Regina. The FTZ Points facilitate the coordination of government programs and services related to international trade. There are now four FTZ Points across the West at inland ports in Winnipeg, Regina, Calgary and Edmonton.

In support of WD's Indigenous Economic Growth priority, WD in partnership with Indigenous and Northern Affairs Canada (INAC) hosted the second Saskatchewan Aboriginal Economic Development Forum in December 2015. Approximately 140 people attended the forum, which connected 90 Indigenous economic representatives and businesses to procurement opportunities with the federal government, provincial Crown Corporations, and Saskatchewan-based mining and construction companies. Future opportunities for collaboration between INAC and WD are being explored.

Through its on-the-ground intelligence gathering and economic analysis, WD identifies key issues, and supports policy discussions and decision making at the departmental and national level to seize opportunities and identify challenges facing the regional economy. For example, WD gathers intelligence and provides strategic advice related to key priorities including trade and investment, innovation, Indigenous economic growth, and federal defence procurement that directly informs and advances a western Canadian perspective in national policy-making. Another example is the in-depth research WD conducted on global, Canadian, and western Canadian economic trends, opportunities and challenges which helped inform senior management of key issues and set the framework for discussion and development of departmental medium-term policy. WD also developed a Disruptive Technology Diagnostic to provide an overview of key disruptive technology capabilities (e.g., advanced materials, energy storage, and big data) present in Western Canada. The diagnostic provided statistical information, profiled key research organizations, and highlighted both private sector and WD investments for selected emerging technologies. It also provided an in-depth statistical overview of science and technology in Western Canada.

 

Budgetary Financial Resources (dollars)
2015-16
Main Estimates
2015-16
Planned Spending
2015-16
Total Authorities Available for Use
2015-16
Actual Spending
(authorities used)
2015-16
Difference
(actual minus planned)
10,145,094 10,145,094 10,471,837 8,922,602 (1,222,492)

Note: Actual spending is lower than planned as a result of reallocation of funding to other departmental priorities.

 

Human Resources (FTEs)
2015–16
Planned
2015–16
Actual
2015–16
Difference
(actual minus planned)
58 56 (2)

 

Performance Results
Expected Result Performance Indicators Targets Actual Results
Policies that strengthen the western Canadian economy Percentage of key informants with the opinion that WD activities resulted in policies that support the economic development of Western Canada 90% 82.7%xxxii
Programs that strengthen the western Canadian economy Percentage of key informants with the opinion that WD activities resulted in programs that support the economic development of Western Canada 90% 87.0%xxxiii

Internal Services

Description

Internal services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. Internal services include only those activities and resources that apply across an organization, and not those provided to a specific program. The groups of activities are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; and Acquisition Services.

Program Performance Analysis and Lessons Learned

In 2015–16, WD undertook a number of initiatives to create a technology and systems- enabled workplace to support the Government of Canada's Blueprint 2020xxxiv goals of enhancing service delivery, boosting value for money, and maintaining an efficient and high-performing organization. For example, in September 2015, WD completed its migration to the new standardized Government of Canada email system via the Email Transition Initiative (ETI). Shared Services Canada led this initiative to standardize email across the Government of Canada, consolidating over 100 different email systems into one. Using Microsoft Exchange as the foundation and Outlook as the interface, ETI reduces duplication and overlap, maximizes resources, improves collaboration, and reduces the risk of cyber-threats.

In addition, WD carried out significant system development with the creation of the WD Web Portal and implemented enhancements to the department's internal Client Relationship Management system to support the capture of targets and results data from WCBSN organizations. The portal increases efficiency and allows for the electronic submission of performance data directly to WD staff from CFs, FEDOs and WEI organizations. Training sessions were also facilitated across the regions to organizations and WD staff in order to maintain consistent program delivery and direct assistance during implementation. The new system facilitated the implementation of efficiencies gained through the WCBSN Revitalization efforts, and will greatly enhance the target and results reporting capabilities for these organizations and for WD. WD also continues its ongoing engagement and partnership with the other Regional Development Agencies in the development of a common grants and contributions system to achieve program efficiencies.

In November 2015, after concluding the modernization of its Saskatoon offices, WD commenced the modernization of its Edmonton and Ottawa offices towards Government of Canada Workplace 2.0 Standards that will encourage employees to work smarter, greener and healthier in order to serve Canadians. For example, each staff member will be provided with height adjustable work surfaces and office ergonomic training to create a more active workplace. The new work environment is expected to promote collaboration and engagement between employees throughout the offices and to foster a knowledge sharing environment between WD units.

Furthermore, WD continues to invest in and expand the use of video conferencing, web- based tools, and other wireless connectivity technologies for participating and conducting inter-regional meetings, training sessions, and day-to-day activities. This aligns WD with the government's workplace modernization and Destination 2020 strategy.

WD is a participant in the Federal Sustainable Development Strategy (FSDS) and contributes to the Greening Government Operations targets through the Internal Services program. The Department contributes to the following target areas of Theme IV (Shrinking the Environmental Footprint–Beginning with Government) of the FSDS: e- waste, printing unit reduction, paper consumption, green meetings and green procurement. For additional details on WD's Departmental Sustainable Development Strategy, please see the list of Supplementary Information Tables in Section III.

 

Budgetary Financial Resources (dollars)
2015–16
Main Estimates
2015–16
Planned Spending
2015–16
Total Authorities
Available for Use
2015–16
Actual Spending
(authorities used)
2015–16
Difference
(actual minus planned)
14,385,978 14,385,978 14,885,812 14,230,056 (155,922)

 

Human Resources (FTEs)
2015–16
Planned
2015–16
Actual
2015–16
Difference (actual minus planned)
102 94 (8)