2019-20 Departmental Plan

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ISSN 2371-6762

Table of contents

• Minister's message
• Plans at a glance and operating context
• Planned results: what we want to achieve this year and beyond
  • Core Responsibility
    • Economic development in western Canada
      • Description
      • Planning highlights
    • Internal Services
      • Description
      • Planning highlights
• Spending and human resources
  • Planned spending
  • Planned human resources
  • Estimates by vote
  • Future-Oriented Condensed Statement of Operations
• Additional information
  • Corporate information
  • Organizational profile
  • Raison d'être, mandate and role: who we are and what we do (section)
  • Reporting framework
• Supporting information on the Program Inventory
• Supplementary information tables (section)
• Federal tax expenditures
• Organizational contact information
• Appendix: definitions
• Endnotes

Minister's message

It is my pleasure to present the 2019-20 Departmental Plan for Western Economic Diversification Canada (WD). We are working across the Innovation, Science and Economic Development Portfolio to support and develop the innovation ecosystem, strengthen science to support evidence-based decision making, champion the tourism sector, and help small businesses start up and scale-up.

Our government committed to invest in Canadians to grow our economy, strengthen the middle class, and help those working hard to join it. With WD, we have delivered on those commitments over the last four years.

WD is the federal department responsible for the diversification and economic development of western Canada. The department produces results for western Canadians through investment programs, assisting communities, client services, and policy activities.

Two key priorities for WD are fostering inclusiveness and growing economic clusters to unlock the potential of all Canadians and to build momentum in high potential areas of the western Canadian economy.

Ultimately, the Portfolio’s work will create the right environment to generate ideas, commercialize those ideas, and give Canadians the skills to access the jobs and opportunities presented by today’s economy.

Together with Canadians of all backgrounds, regions and generations, we are building a strong culture of innovation to position Canada as a leader in the global economy.

The Honourable Navdeep Bains

Minister of Innovation, Science
and Economic Development

Plans at a glance and operating context

Western Economic Diversification Canada (WD) improves the long-term competitiveness of western Canada and the quality of life of its citizens. WD supports the delivery of Canada's Innovation and Skills Plan, the government's new framework to drive growth, build a culture of innovation and brand Canada as one of the most innovative and competitive countries in the world. The multi-year plan spans the innovation continuum: people and skills, fundamental and applied research, innovation ecosystems, commercializing ideas, starting-ups and scaling-up. Emphasizing partnerships, the plan embraces the participation of everyone.

WD has created a strategic framework which is based on our two main priorities of cluster growth and inclusiveness. The department will help innovative western clusters scale-up and capture global markets and increase economic participation of Indigenous peoples, women and youth. WD will also focus on community economic growth and the Western Canada Growth Strategy.

The department will deliver new programs in the west such as the Regional Economic Growth through Innovation (REGI) initiative and the Women Entrepreneurship Strategy (WES). REGI will improve productivity and scale-up potential for small and medium-sized enterprises (SMEs), women and Indigenous entrepreneurs. It will also enhance regional industrial and technology clusters and regional innovation ecosystems. WES will assist women entrepreneurs in growing their existing businesses, pursuing new market opportunities, and strengthening capacity within the entrepreneurship ecosystem.

WD will continue to support businesses and communities through existing grants and contributions programming. This includes the Western Diversification Program, research and policy development, and supporting network partners in the Western Canada Business Service Network (WCBSN).

With our support for key sectors such as clean technology, clean resources, digital, value-added agriculture, advanced manufacturing, and life sciences, western Canada will continue to diversify its economy.

Operating context

Western Canada accounts for nearly one-third of Canada's population and 38 percent of Canada's economy.ⁱ The west as a whole has led all other regions in growth over the past decade, even as it has faced significant challenges, including low commodity prices. While the western provinces share some common economic foundations, they also have distinct economies resulting in very different short-term economic growth outlooks.

Following two years of recession, the region entered a phase of economic recovery in 2017. However, recovery has been slow, reflecting the challenges of continued depressed oil and commodity prices.

Emerging from the recession, Alberta led growth among the provinces at 4.6 percent in 2017ⁱⁱ, driven in part by the reconstruction efforts after the wildfires. Economic growth slowed considerably in 2018 (2.5%), and with a weakened oil sector, the curtailment of oil production is expected to taper growth to 1.7 percent in 2019, but position the province for a rebound in 2020 (2.4%).

Saskatchewan had a 2.3 percent growth rate in 2017. Significantly weaker gains of 1.2 percent are forecasted in 2018, largely due to weakness in the uranium market, lower than expected crop production, and reduced infrastructure spending. With potash prices forecasted to trend higher, growth is expected to pick up to modest levels of 1.6 percent in 2019 and 1.7 percent in 2020.

British Columbia had the second-strongest provincial growth rate at 4.0 percent in 2017. The weakening housing market slowed growth to 2.3 percent in 2018, but construction of LNG Canada's liquefied natural gas export terminal is expected to push growth to 2.5 percent in 2019 and 2020.

Manitoba, the least resource-dependent western province, had 3.1 percent growth in 2017. Lower retail sales and lower crop production are expected to slow down Manitoba's growth, forecasted at 2.2 percent in 2018, while metal mining contraction will slow growth to 1.8 percent in 2019 and 1.4 percent in 2020.

Other challenges for the western Canadian economy include:

• changing dynamics in trade relationships;
• market access for goods and transportation infrastructure capacity;
• low business investment in research and development compared to national and international rates;
• extreme weather events impacting communities;
• adapting to a low-carbon economy; and,
• persistent socio-economic gaps for underrepresented groups, in particular Indigenous people, women, and youth.

Increasing economic success in western Canada will require adopting innovative approaches to build on regional strengths.

For more information on Western Economic Diversification Canada's plans, priorities and planned results, see the "Planned results" section of this report.

Planned results: what we want to achieve this year and beyond

Core Responsibility

Economic development in western Canada

Description

Western Economic Diversification Canada (WD) promotes growth and diversification in the western Canadian economy by enhancing innovation, improving business competitiveness, promoting the adoption of clean technologies and inclusive growth.

Planning highlights

To achieve this result WD will:

• Fund projects under the Regional Economic Growth through Innovation (REGI) initiative.
  • Through Business Scale-up and Productivity, invest in businesses and high-growth firms, to accelerate their growth, assist them in scaling up, and enhance their productivity and competitiveness in both domestic and global markets.
  • Through the Regional Innovation Ecosystem program, support growth in priority sectors.
• Under REGI, WD will also fund a one-year initiative for SMEs that are downstream users of steel and aluminum to enhance productivity and improve competitiveness.
• Deliver new program funding under the Women Entrepreneurship Strategy (WES), which is focused on helping women to start and grow their businesses and provides improved access to financing, talent, networks and expertise.
  • The Women Entrepreneurship Fund will invest in women entrepreneurs to grow their businesses and pursue new market opportunities.
  • The WES Ecosystem Fund will help non-profit, third-party organizations deliver support for women entrepreneurs and address gaps in the ecosystem.
  Investments under the Strategy will contribute to the national target of doubling the number of majority-owned SMEs by women by 2025.

• Provide entrepreneurs, especially Indigenous peoples, women and youth, with funding and services to help them start and grow their businesses. Many services are provided by network partners in the Western Canada Business Service Network.
• Promote western businesses with major defence procurement contractors to maximize industrial and technological benefits (ITB) generated by Government of Canada procurement projects. WD's 2018-19 evaluation of ITB programming recommended more targeted and strategic leveraging of ITB policy to support development of this sector in western Canada.
• Conduct analytical research and disseminate knowledge about factors that influence WD's priorities, development of national policy and areas of high-growth potential.

To achieve this result WD will:

• Deliver funding and support through the Canada Coal Transition Initiativeⁱⁱⁱ to assist western Canadian communities' move to a low carbon economy by 2030. Some of these initiatives include new employment and business support, training programs, and entrepreneurial development services.
• Support economic development initiatives that help communities advance and expand their economies through the Western Diversification Program.

Attracting capital for technology commercialization is a key challenge for enterprises in western Canada. The department will:

• Fund and support innovation clusters to help entrepreneurs and businesses capitalize on highly innovative industries and improve their supply chain relationships. Canada's Economic Strategy tables and Innovation and Skills Plan endorse the cluster model as a way to improve the innovation ecosystem and strengthen individual firms.
• Deliver the Regional Economic Growth through Innovation (REGI) initiative to support firms in the commercialization of new technologies and encourage early adoption or adaptation of leading-edge technologies and processes to improve productivity.
• Provide funding to the Rick Hansen Institute for their innovative spinal cord injury research and development to improve the lives of those with spinal cord injury.

There is a risk that changes in economic conditions may affect WD and partners ability to diversify and develop the western economy. Changes include uncertainty and shifts in the current trade environment, ability to export products, and potential market interruptions.

To address this risk, in the coming year, WD will:

• Launch a Western Canada Growth Strategy to advance medium-term goals regardless of short-term cyclical events.
• Gather intelligence and analytical research to encourage key actors to be proactive in addressing risks.
• Increase diversity and number of businesses through initiatives such as the Women Entrepreneurship Strategy, to help sustain economic growth during these challenges.
• Provide business advice and training through the Western Canada Business Service Network, and funding through WD's grants and contributions programs, to improve skills and resilience to change.
• Monitor progress of projects and apply flexible program delivery to be responsive to client needs.

WD fosters experimentation and innovation to improve its internal business processes. For example, WD:

• continually updates and improves grants and contributions program delivery; and,
• makes use of research and data analytics to support evidence-based decision-making.

WD continues to utilize the Employee Innovation Fund to support staff with new and innovative ideas and processes to improve how the department does its work and serves Canadians. Ideas supported through the fund will: streamline the application process to be more accessible, efficient and inclusive; facilitate better client service; and introduce innovative ways to promote services and communicate results to Canadians.

As Canada works to position itself as a world leader in innovation, it needs to harness the talents of all Canadians. WD's priorities and plans have been developed to support economic development that will engage broad participation of western Canada's diverse population in both rural and urban areas. The initiatives outlined in this section will make progress on the government-wide priorities of gender equality, diversity and inclusiveness while improving economic development of the western Canadian economy.

Internally, the department has a gender-based analysis plus (GBA+) Champion and has created a GBA+ committee, a GBA+ responsibility centre, and GBA+ subject matter focal points, who keep up-to-date on GBA+ developments. WD has also created internal guidance laying out how GBA+ is integrated and considered for all levels of decision-making in programs, policy, and other initiatives.

Planned results

The following Departmental Results and Indicators are common across all regional development agencies, and support the planned results for the Innovation and Skills Plan within the Innovation, Science, and Economic Development portfolio.

¹ Data and actual results are not available for this year.

² To be determined (TBD). 2019-20 may be used as baseline year. A target may be established for 2020-21 if data is available.

³ Actual results are based on a 2 year data lag.

⁴ Actual results are based on a 3 year data lag.

Financial, human resources and performance information for Western Economic Diversification Canada's Program Inventory is available in the GC InfoBase.

Internal Services

Description

Internal Services are those groups of related activities and resources that the federal government considers to be services in support of Programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct services that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. These services are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Management Services; Materiel Management Services; Acquisition Management Services.

Planning highlights

The department will continue to develop internal initiatives to improve operational efficiencies and services. In 2019-20, WD will:

• operationalize the new regional payment units to improve forecasting, claim processing, repayments, monitoring and overall client service;
• finalize the office move in Vancouver to decrease costs and improve efficiency;
• continue the modernization and improvement of grants and contributions delivery, business processes and program innovation;
• provide in-house compensation expertise and services to ensure WD staff and transferred employees are paid accurately and on time;
• implement the common Grants and Contributions Program Management business system in collaboration with other regional development agencies; and,
• identify areas of improvement for internal and external client service through WD's service management strategy and departmental service standards.

Spending and human resources

Planned spending

Departmental Spending Trend Graph

The overall increase in voted spending in years 2018-19 to 2019-20 relate to Budget 2018 spending for the Women Entrepreneurship Strategy and Regional Economic Growth through Innovation initiative. The increase in spending in 2018-19 and 2019-20 compared to future years relates to the restoration of rail service to Churchill, Manitoba and support for small and medium-sized enterprise users of steel and aluminum.

WD's planned spending in 2019-20 is $251.6 million, compared to the 2018-19 forecast spending of $243.8 million. This represents a net increase in spending of $7.8 million, which includes a net increase in contributions and other transfer payments of $9.8 million and a decrease in operating costs of $2.0 million.

Factors contributing to the net increase in spending in 2019-20 include:

• an increase of $25.0 million in funding for supporting small and medium-sized enterprise users of steel and aluminum;
• a decrease of $21.0 million in spending for the acquisition of OmniTRAX owned companies and repairs required to restore rail service to northern Manitoba;
• an increase of $5.0 million in funding for the conclusion of the Budget 2015 commitment for the Thirty Meter Telescope;
• an increase of $4.0 million in funding for the Canada Coal Transition Initiative announced in Budget 2018;
• a decrease of $3.2 million in funding due to the timing of reinvestment of receipts from repayable contributions; and,
• a net decrease of $2.0 million in operating funding for a budget carry forward and adjustments for collective bargaining settlements and employee benefits.

Planned human resources

Human resource levels in WD increased in 2018-19 as a result of new Budget 2018 programs such as the Women Entrepreneurship Strategy and the Regional Economic Growth through Innovation initiative. The base human resource levels continue to be stable, fluctuations that occur reflect resource realignment in support of priorities and projects. The department will continue to achieve its results by allocating its human resources to best support its programs.

Estimates by vote

Information on Western Economic Diversification Canada's organizational appropriations is available in the 2019-20 Main Estimates.

Future-Oriented Condensed Statement of Operations

The Future-Oriented Condensed Statement of Operations provides a general overview of WD's operations. The forecast of financial information on expenses and revenues is prepared on an accrual accounting basis to strengthen accountability and to improve transparency and financial management. The forecast and planned spending amounts presented in other sections of the departmental plan are prepared on an expenditure basis; as a result, amounts may differ.

A more detailed Future Oriented Statement of Operations and associated notes, including a reconciliation of the net cost of operations to the requested authorities, are available on WD's website - (Departmental Plans and Reports).

WD's total expenses are expected to be $224.5 million in 2019-20, compared to $202.3 million in 2018-19. The $22.2 million difference in total expenses is primarily due to an increase in spending for the Canadian steel and aluminum small and medium-sized enterprises initiative, increases in spending for Budget 2018 initiatives and lower expenditures for unconditionally repayable contributions, offset by a decrease in spending for the restoration of rail service to Churchill, Manitoba.

Additional information

Corporate information

Organizational profile

Minister of Innovation, Science and Economic Development:
The Honourable Navdeep Bains, P.C., M.P.

Institutional head: Dylan Jones

Ministerial portfolio: Innovation, Science and Economic Development

Enabling instrument(s):
Western Economic Diversification Act, R.S.C. 1985, c.11, (4^th Supplement)

Year of incorporation / commencement: 1987

Other:

Headquarters - Edmonton, Alberta

Offices - Vancouver, British Columbia

Edmonton and Calgary, Alberta

Saskatoon, Saskatchewan

Winnipeg, Manitoba

Ottawa, Ontario

Raison d'être, mandate and role: who we are and what we do

"Raison d'être, mandate and role: who we are and what we do" is available on WD's website.

Reporting framework

Western Economic Diversification Canada's Departmental Results Framework and Program Inventory of record for 2019-20 are shown below:

Supporting information on the Program Inventory

Supporting information on planned expenditures, human resources, and results related to Western Economic Diversification Canada's Program Inventory is available in the GC InfoBase.

Supplementary information tables

The following supplementary information tables are available on WD's website.

• Departmental Sustainable Development Strategy
• Details on transfer payment programs of $5 million or more
• Disclosure of transfer payment programs under $5 million
• Gender-based analysis plus
• Up-front multi-year funding

Federal tax expenditures

The tax system can be used to achieve public policy objectives through the application of special measures such as low tax rates, exemptions, deductions, deferrals and credits. The Department of Finance Canada publishes cost estimates and projections for these measures each year in the Report on Federal Tax Expenditures. This report also provides detailed background information on tax expenditures, including descriptions, objectives, historical information and references to related federal spending programs. The tax measures presented in this report are the responsibility of the Minister of Finance.

Organizational contact information

Western Economic Diversification Canada

Suite 1500, 9700 Jasper Avenue
Edmonton, Alberta T5J 4H7

Telephone:      780-495-4164
Fax:                 780-495-4557
Web:               www.wd-deo.gc.ca

Appendix: definitions

appropriation (crédit)
Any authority of Parliament to pay money out of the Consolidated Revenue Fund.

budgetary expenditures (dépenses budgétaires)
Operating and capital expenditures; transfer payments to other levels of government, organizations or individuals; and payments to Crown corporations.

Core Responsibility (responsabilité essentielle)
An enduring function or role performed by a department. The intentions of the department with respect to a Core Responsibility are reflected in one or more related Departmental Results that the department seeks to contribute to or influence.

Departmental Plan (plan ministériel)
A report on the plans and expected performance of an appropriated department over a three-year period. Departmental Plans are tabled in Parliament each spring.

Departmental Result (résultat ministériel)
Any change that the department seeks to influence. A Departmental Result is often outside departments' immediate control, but it should be influenced by Program-level outcomes.

Departmental Result Indicator (indicateur de résultat ministériel)
A factor or variable that provides a valid and reliable means to measure or describe progress on a Departmental Result.

Departmental Results Framework (cadre ministériel des résultats)
The department's Core Responsibilities, Departmental Results and Departmental Result Indicators.

Departmental Results Report (rapport sur les résultats ministériels)
A report on the actual accomplishments against the plans, priorities and expected results set out in the corresponding Departmental Plan.

evaluation (évaluation)
In the Government of Canada, the systematic and neutral collection and analysis of evidence to judge merit, worth or value. Evaluation informs decision making, improvements, innovation and accountability. Evaluations typically focus on programs, policies and priorities and examine questions related to relevance, effectiveness and efficiency. Depending on user needs, however, evaluations can also examine other units, themes and issues, including alternatives to existing interventions. Evaluations generally employ social science research methods.

experimentation (expérimentation)
Activities that seek to explore, test and compare the effects and impacts of policies, interventions and approaches, to inform evidence-based decision-making, by learning what works and what does not.

full-time equivalent (équivalent temps plein)
A measure of the extent to which an employee represents a full person-year charge against a departmental budget. Full-time equivalents 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.

gender-based analysis plus (GBA+) (analyse comparative entre les sexes plus [ACS+])
An analytical process used to help identify the potential impacts of policies, Programs and services on diverse groups of women, men and gender-diverse people. The "plus" acknowledges that GBA goes beyond sex and gender differences. We all have multiple identity factors that intersect to make us who we are; GBA+ considers many other identity factors, such as race, ethnicity, religion, age, and mental or physical disability.

government-wide priorities (priorités pangouvernementales)
For the purpose of the 2019-20 Departmental Plan, government-wide priorities refers to those high-level themes outlining the government's agenda in the 2015 Speech from the Throne, namely: Growth for the Middle Class; Open and Transparent Government;  A Clean Environment and a Strong Economy; Diversity is Canada's Strength; and Security and Opportunity.

horizontal initiative (initiative horizontale)
An initiative where two or more departments are given funding to pursue a shared outcome, often linked to a government priority.

non-budgetary expenditures (dépenses non budgétaires)
Net outlays and receipts related to loans, investments and advances, which change the composition of the financial assets of the Government of Canada.

performance (rendement)
What an organization did with its resources to achieve its results, how well those results compare to what the organization intended to achieve, and how well lessons learned have been identified.

performance indicator (indicateur de rendement)
A qualitative or quantitative means of measuring an output or outcome, with the intention of gauging the performance of an organization, Program, policy or initiative respecting expected results.

Performance Information Profile (profil de l'information sur le rendement)
The document that identifies the performance information for each Program from the Program Inventory.

performance reporting (production de rapports sur le rendement)
The process of communicating evidence-based performance information. Performance reporting supports decision making, accountability and transparency.

plan (plan)
The articulation of strategic choices, which provides information on how an organization intends to achieve its priorities and associated results. Generally a plan will explain the logic behind the strategies chosen and tend to focus on actions that lead up to the expected result.

planned spending (dépenses prévues)
For Departmental Plans and Departmental Results Reports, planned spending refers to those amounts presented in the Main Estimates.

A department is expected to be aware of the authorities that it has sought and received. The determination of planned spending is a departmental responsibility, and departments must be able to defend the expenditure and accrual numbers presented in their Departmental Plans and Departmental Results Reports.

priority (priorité)
A plan or project that an organization has chosen to focus and report on during the planning period. Priorities represent the things that are most important or what must be done first to support the achievement of the desired Departmental Results.

Program (programme)
Individual or groups of services, activities or combinations thereof that are managed together within the department and focus on a specific set of outputs, outcomes or service levels.

Program Inventory (répertoire des programmes)
Identifies all of the department's programs and describes how resources are organized to contribute to the department's Core Responsibilities and Results.

result (résultat)
An external consequence attributed, in part, to an organization, policy, Program or initiative. Results are not within the control of a single organization, policy, Program or initiative; instead they are within the area of the organization's influence.

statutory expenditures (dépenses législatives)
Expenditures that Parliament has approved through legislation other than appropriation acts. The legislation sets out the purpose of the expenditures and the terms and conditions under which they may be made.

sunset program (programme temporisé)
A time-limited program that does not have an ongoing funding and policy authority. When the program is set to expire, a decision must be made whether to continue the program. In the case of a renewal, the decision specifies the scope, funding level and duration.

target (cible)
A measurable performance or success level that an organization, Program or initiative plans to achieve within a specified time period. Targets can be either quantitative or qualitative.

voted expenditures (dépenses votées)
Expenditures that Parliament approves annually through an Appropriation Act. The Vote wording becomes the governing conditions under which these expenditures may be made.