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Section 2: Analysis of Program Activities by Strategic Outcome

Strategic Outcome: A Fair, Efficient and Competitive Marketplace

Competitive markets enable business investment, innovation, productivity and growth, and are therefore essential to Canada’s long-term prosperity. Industry Canada works with other federal departments to create a business climate that is conducive to attracting and retaining investment, innovative industries, and talented workers. The department also develops policies that promote consumer confidence and are flexible and responsive to changing technologies, marketplace opportunities and an evolving global marketplace. By doing this, Industry Canada is helping to build a fair, efficient and competitive marketplace.

Meeting Our Commitments

In an effort to continue to modernize marketplace frameworks in support of a highly competitive and innovative economy for the benefit of all Canadians, Industry Canada:

• Made recommendations resulting in Bill C-47, The Olympic and Paralympics Marks Act, which provides special, limited-time intellectual property protection for Olympic and Paralympic words and symbols and prohibits “ambush marketing” — marketing that seeks to capitalize on the goodwill of the Olympic movement by creating a false, unauthorized association with the Games without making the financial investment required to secure official sponsorship rights. The Act received Royal Assent on June 22, 2007.
• Consulted with over 1,200 stakeholders by email and contacted 50 companies and associations directly, as part of the review of the Weights and Measures Act and Electricity and Gas Inspection Act and identified the need to modernize the offence sections to ensure fines provide appropriate deterrents and consumer protection.
• Continued to assist and support provinces as they seek Order-in-Council designations to regulate payday lending, under the provisions of Section 347.1 of the Criminal Code of Canada, thus providing greater protection for consumers under these high-cost loans.
• Issued the policy framework as well as the licensing framework for the Auction for Spectrum licences for Advanced Wireless Services (AWS) in the 2 GHz range.
• Completed a study on Canada’s self-regulated professions in December 2007. The study found that rules that limit advertising, set prices for services and restrict who can offer professional services may go further than necessary to protect the public interest and, in fact, can lead to higher prices, limited choices and restricted access to the type of information consumers need to make decisions.

Performance Analysis

Through the following program activities Industry Canada continued building a fair, efficient and competitive marketplace.

Program Activity Policy Sector – Marketplace

^*The introduction and adoption of legislative initiatives are the prerogatives of government and Parliament.

In Advantage Canada, the Government of Canada committed to adopt a principle-based approach to address the concern that there may be rare occasions when foreign investments by state-owned enterprises (SOEs) might not benefit Canada. This concern was addressed when, on December 7, 2007, the Minister of Industry issued guidelines clarifying that sound principles of corporate governance and commercial orientation will drive how investments will be reviewed under the Investment Canada Act by foreign SOEs.

Program Activity Operations Sector – Marketplace

By relieving the administrative and paperwork burden on business, Industry Canada is ensuring that marketplace fairness, integrity and efficiency is being protected and promoted. Two measures announced in Advantage Canada exemplify this. One is e-filing, which allows trustees to file prescribed documents, and another is Pre-Approved Schedules Service (PASS), which decreases turnaround time for incorporation (a total of 1,300 certificates of incorporation were received via this new initiative in 2007–08).

Program Activity Spectrum, Information Technologies and Telecommunications Sector – Marketplace

As the underlying infrastructure of Canada’s economic activity, telecommunications services are key to the Canadian economy. In 2007–08, Industry Canada worked with stakeholders to advance the government’s agenda for telecommunications reform, including accelerating deregulation in areas where there is competition, and created the Commissioner for Complaints for Telecommunications Services Inc.

Industry Canada also successfully negotiated all Canadian proposals at the International Telecommunication Union (ITU) World Radiocommunication Conference 2007. This has resulted in the allocation and safeguarding of radio spectrum in the International Radio Regulations, which is a treaty text, to support such things as new advanced mobile services, aeronautical safety, next-generation navigation and environmental monitoring systems, and disaster relief and mitigation.

Improving confidence in the marketplace by protecting individual privacy and curbing threats to the Internet and online market continued to be a priority for Industry Canada. Key actions included the continued mandatory review of the Personal Information Protection and Electronic Documents Act (PIPEDA) and the development of options for introducing new initiatives to combat spam.

Program Activity Office of Consumer Affairs – Marketplace

Industry Canada, through its Office of Consumer Affairs contributed to increasing consumer confidence and a more fair and efficient marketplace by actively engaging in initiatives to respond to consumer issues. These initiatives included several projects to support the harmonization of federal/provincial/territorial consumer policies, collaborating with international partners such as the Organisation for Economic Co-operation and Development (OECD) and the International Organization for Standardization (ISO) to advance the development of international consumer policy and consumer protection models, and providing strategic consumer research and consumer information products designed to meet consumer needs in the modern marketplace.

Program Activity Competition Bureau – Marketplace

Through the efforts of the Competition Bureau, the Department increased legislative compliance through a variety of activities in competition enforcement and advocacy, as well as fraud prevention and awareness.

These activities included strengthening enforcement capacity in regional offices by giving them the responsibility of local cartels with a strong emphasis on bid rigging. In addition, the Community of Federal Regulators recognized the Competition Bureau with an innovation award for its work on  Project FairWeb, which enables the Competition Bureau to redesign work processes involved in intelligence gathering and Internet sweep exercises in a more systematic manner, yielding positive results.

Program Activity Canadian Intellectual Property Office – Marketplace

*As a Special Operating Agency within Industry Canada with a revolving fund authority, the Canadian Intellectual Property Office finances its operations entirely from revenues generated by fees received from the provision of intellectual property services.

As a roadmap to achieve its vision of becoming a leading Intellectual Property Office (IPO) as well as to support the government’s efforts to increase innovative activity by Canadians, Industry Canada, through the Canadian Intellectual Property Office (CIPO) adopted a Five-Year Strategic Plan entitled Moving Forward to Canada’s Advantage focusing on five strategic directions. These are: client services, outreach, the intellectual property framework, international activities, and our people.

As a critical element to deliver its Strategic Plan, CIPO launched a business transformation initiative called Enterprise-Business Renewal (EBR), a portfolio of projects directed to transform the way CIPO does business by improving business processes, renewing systems, and expanding the range of electronic services. For outreach, CIPO continued to foster greater awareness and more effective use of intellectual property by reaching out to small and medium-sized enterprises (SMEs) and working closely with Canada’s education sector in line with the government’s priorities in science and technology.

Strategic Outcome: An Innovative Economy

Innovation — the transfer of knowledge to create new products or processes — is a key driver of growth and economic wealth in knowledge-based economies such as Canada.

In pursuit of a more innovative economy, Industry Canada is pursuing a strategy that invests in skilled knowledge workers, cutting-edge research and the adoption of new technologies. This support will encourage business, industry and the academic community to invest in innovation. Canadians will reap the benefits of medical advancements, a cleaner environment, improved education and employment opportunities.

The variance between the planned and actual spending for 2007–08 is a result of an increased grants and contributions program allocation made in the Federal 2008 Budget. Additional details are outlined below in the Meeting Our Commitments section.

The decrease between the 2006–07 and 2007–08 actual Full-Time Equivalents (FTEs) is due to productivity gains in mature sectors allowing Industry Canada to streamline its regions.

Meeting our Commitments

In 2007–08 Industry Canada, in delivering on its commitments to develop an innovative and knowledge-based economy, ensured the allocation of resources by:

• Developing evidence-based policy recommendations that contributed to two Federal 2008 Budget announcements: earmarking $75 million for the creation of a new Canadian Venture Capital fund, and changes to streamline processes related to eligible cross-border venture capital investment flows.
• Making key investments through Budget 2008 including $25 million over two years to establish the Vanier Canada Graduate Scholarships, $21 million over two years to establish the Canada Excellence Research Chairs, and $140 million to Genome Canada to build upon Canada's knowledge advantage in genomics.
• Acting as the administrator of the Program for Strategic Industrial Projects (PSIP), which provides the mechanism to fund, in whole or in part, strategic projects within the automotive sector.

Industry Canada also supported the generation and commercialization of knowledge by:

• Opening laboratories for photonics and antenna research at the Communications Research Centre Canada.
• Supporting cooperation activities between Canada, the United States and Mexico in the use of nanotechnology.
• Completing six Technology Roadmaps (TRM) that help industry, its supply-chain, academic and research groups and government come together to jointly identify and prioritize the technologies needed to support strategic research and development (R&D), marketing and investment decisions.

Performance Analysis

Through the following program activities Industry Canada continued to build an innovative economy.

Program Activity Policy Sector – S&T and Innovation

Recognizing that science and technology are key drivers that make Canada more productive and competitive and address social priorities, Industry Canada championed the development and implementation of the federal Science and Technology (S&T) Strategy, Mobilizing Science and Technology to Canada’s Advantage, released by the Prime Minister in May 2007.

This strategy focuses on advancing four core principles: promoting world-class excellence; focusing on priorities; fostering partnerships and enhancing accountability; and it fosters three key advantages of the Advantage Canada initiative: Entrepreneurial, Knowledge and People.

Program Activity Industry Sector – S&T and Innovation

^*The variance between the planned and actual spending for 2007–08 is due to two different factors. The Industry Sector transferred resources to the Economic Development program activity during 2007–08, and three grants were incorrectly coded to the Industry Sector’s S&T and Innovation program activity, which should have been coded to the Policy Sector – S&T and Innovation program activity.

Industry Canada completed a range of analyses, allowing government and industry to better identify and understand the challenges and opportunities surrounding emerging technology value chains in Canada in 2007–08. These included an analysis of opportunities for the development of new value chains that link the bio-resource, chemicals, and manufacturing sectors; facilitation of a strategic plan by the chemical cluster in Sarnia, to advance the adoption of underutilized agricultural and forest residues as renewable feedstock for production of chemicals, plastics, and fuels; the identification and assessment of opportunities for Canadian capabilities in hydrogen and fuel cells, waste-to-energy and solar power in the California market; and commissioning of a study, entitled Opportunities for Canadian Stakeholders in the North American Large Wind Turbine Supply Chain.

Program Activity Spectrum, Information Technologies and Telecommunications Sector – S&T and Innovation

In 2007–08, Industry Canada continued to support the CANARIE Inc. objectives to expand and upgrade the advanced research network and to develop, demonstrate and implement next-generation technologies. This support helped pave the way to launch the Infrastructure Extensions Program and the Network-Enabled Platforms Program. In addition to this investment, Precarn Inc. funded 12 new technology projects across the country for a total of $4.4 million.

Program Activity Communications Research Centre Canada – S&T and Innovation

* The numbers are very similar to those of last fiscal year, with only a very small upward trend.

** An economic impact study of company sales revenues resulting from CRC technologies and intellectual property licences is conducted every five years, with the next one scheduled for 2010.

Industry Canada, through the Communications Research Centre Canada (CRC), conducted research activities in support of spectrum policy and regulations in 2007–08. This included studies related to future Advanced Wireless Services, as well as on spectrum property rights. Input was also provided regarding the impact of emerging standards on licensing of rural broadband delivery systems.

In addition, Industry Canada carried out research projects in 2007–08 in support of the Department of National Defence (DND) valued at $7.38 million on a cost-recovery basis. Some of these projects included research into adaptive wireless systems for tactical mobile communications, as well as technical analysis and planning at the international level for the new constellation of search and rescue satellites.

Program Activity Technology Partnerships Canada – S&T and Innovation

*Trend information is unavailable as the Strategic Aerospace and Defence Initiative (SADI) program was launched in April 2007. TPC’s terms and conditions expired on December 31, 2006 and no new projects were contracted. The h2EA program ended on March 31, 2008.

In February 2008, the first Strategic Aerospace and Defence Initiative (SADI) project was announced. Diamond D-JET Corporation (Diamond) in London, Ontario received a $19.6-million SADI repayable investment towards its $95.2-million D-JET program. This SADI investment will enable Diamond to develop an all-composite single engine for use in its new class of small business jets. It will also help to develop the company’s expertise in products for general aviation. Additional benefits of the D-JET program include attracting foreign investment to Canada and leveraging private sector investment in R&D, both of which will create significant economic benefits, particularly in the London region.

Strategic Outcome: Competitive Industry and Sustainable Communities

Competitive industries drive economic growth and thus are key to ensuring that the Canadian economy remains one of the strongest and healthiest among the seven leading industrial countries of the G7. Competitive industries also drive sustainable communities, and together these two key elements help to ensure a high quality of life for Canadians.

In today’s globalized marketplace, this competition for investment, skilled workers and customers has never been more intense. Industry Canada promotes competitive industries by offering a range of business services and by collaborating with business and business associations to ensure that industry views are taken into account in the development of broader trade, economic, environmental and social policies that may affect the business climate.

Meeting Our Commitments

In 2007–08 Industry Canada, in meeting its commitments to foster strong economic growth for Canada, strengthened export markets for Canadian products and services, improved the rules that govern international trade and reflected Canada’s domestic industrial agenda by working closely with the Department of Foreign Affairs and International Trade Canada (DFAIT) in the following international negotiations:

• Canada–Korea Free Trade Agreement
• Foreign Investment Promotion and Protection Agreements (FIPA) with India, China, Vietnam and Indonesia
• The Doha round of multilateral trade negotiations under the World Trade Organization

Industry Canada also continued to pursue a variety of initiatives aimed at maintaining the competitiveness of Canadian business by:

• Addressing key policy issues related to Highly Qualified People (HQP), innovation, Scientific Research and Experimental Development (SR&ED) tax credits, procurement, commercialization, green information technology and ICT-related trade policy in policy forums and secured intelligence.
• Supporting increased business opportunities for the Canadian ICT sector by generating 718 sales leads. This was achieved through the support of Canadian pavilions at three key international trade shows in Singapore (CommunicAsia), China (PT ExpoComm) and Spain (Mobile World Congress).
• Supporting networking activities such as the Network for Women Entrepreneurs (NWE), delivered through the Canada–Ontario Business Service Centres (COBSC) a three-year Industry Canada program, to support women entrepreneurs in Ontario. This program provided Ontario businesswomen with access to networking, training, and information to help them start, operate and grow their own businesses. NWE client outreach activity had increased by 53 percent to serve 2,864 clients in 2007–08 over the previous fiscal year through 22 learning events and 36 trade shows and network/speaking events.
• Hosting a Global Value Chains (GVC) conference, that attracted 275 participants from governments, academia, think tanks and the private sector, which furthered our understanding of the implications of GVCs on industries and the economy, and clarified the role of governments in facilitating competitiveness in a globally linked value chain world.

Finally, Industry Canada continued working with Canadians to position them to take advantage of economic opportunities, support business development, provide long-term growth and promote sustainable development by:

• Supporting a study on the sustainability and corporate social responsibility (CSR) platforms of industry associations, the development of a roadmap tool for industry associations on how to effectively integrate sustainability into their organizations, and promoting these findings and tools.
• Continuing, through regional development organizations such as FedNor, to work with partners to help create an environment in which communities can thrive, businesses can grow and people can prosper.

Performance Analysis

More specifically, through the following program activities, Industry Canada continued building competitive industries and sustainable communities in 2007–08.

Program Activity Policy Sector – Economic Development

To meet shared objectives and public policy goals in filling gaps in the financial services offered to small and medium-sized enterprises (SMEs) and to improve their competitiveness, Industry Canada provided strategic direction to, and worked in partnership with, the Business Development Bank of Canada. In collaboration with the University of Ottawa, the Department also undertook two major research projects on SMEs engaged in exporting. Both projects were completed and reports on Canadian SME Exporters and Financing Canadian SME Exporters were published on Industry Canada’s website.

Program Activity Operations Sector – Economic Development

In 2007–08, FedNor, as a regional development organization in Ontario, continued to work with partners to help create an environment in which communities can thrive, businesses can grow and people can prosper. Through the Northern Ontario Development Program alone, FedNor invested $44.2 million in 217 projects, leveraging $154.1 million in additional funds from other sources in a large and diverse geographic area stretching from the Muskoka Lakes to James Bay and from the Manitoba border to western Quebec.

In addition, improved collaboration agreements with regional partners, such as local chambers of commerce, Canada Business Service Centres, local Community Futures Development Corporations and Société d’aide au développement des collectivités helped ensure that Student Connections, an initiative that delivers affordable Internet and e-business training to Canadian SMEs through 14 centres across Canada, was a success.

Program Activity Industry Sector – Economic Development

* This indicator is of less value to measure success and has been revised for 2008–09.

** This figure is the total GDP for sectors that Industry Canada works with.

* The variance between the planned and actual spending in 2007–08 is attributed to a statutory payment of $108.4 million that was made in 2007–08. It was a loan loss sharing program, in partnership with private sector financial institutions, that was wound down in 2007–08 and a claim of $108.388 million was paid to the lender.

The Industrial and Regional Benefits (IRB) policy, managed by Industry Canada, provides the framework for using federal procurement as a lever to promote the federal government’s industrial and regional development objectives. It has allowed the federal government to secure over $1.6 billion in commitments from Lockheed Martin and Boeing in 2007–08. This will result in Canadian firms entering or moving up the global supply chains of these multinationals, as well as generating innovative R&D within the academic community.

Program Activity Spectrum, Information Technologies and Telecommunications Sector – Economic Development

* Due to expanded knowledge and value-added analysis.

ICTs are powerful enablers across the economy. They drive economic development productivity and are key to the social and economic inclusion of Canadians. In 2007–08, additional funding was secured to continue supporting such programs as Community Access Program (CAP) and the Computers for Schools (CFS) that play key roles in supplementing Canadians’ access to ICTs.

Industry Canada also supported the growth of the ICT sector by encouraging expansion and investment by undertaking over 25 corporate calls on Canadian and foreign multinational enterprises (MNEs). Issues were identified and fed into the policy process. This contributed to changes in Scientific Research and Experimental Development (SR&ED) credits, which provides claimants cash refunds and/or tax credits for their expenditures on eligible research and development (R&D) work done in Canada, as announced in the 2008 federal budget.

¹Conference Board of Canada, Death by a Thousand Paper Cuts: The Effects of Barriers to Competition on Canadian Productivity, May 2006, p. 24.

²IMD World Competitiveness Yearbook 2007.

³Ibid.

⁴Ibid.

⁵Olympic and Paralympic Marks Act.

⁶LEGISinfo.

⁷Internal survey.

⁸Internal Database.

⁹Results can be found in Client Service Standards Report for 2007–08.

¹⁰ Survey was conducted in 2006–07 within the SME community.

¹¹Statistics Canada, Domestic Spending on Research and Development (GERD).

¹² Statistics Canada, Domestic Spending on Research and Development (GERD).

¹³ Conference Board of Canada, How Canada Performs 2007: A Report Card on Canada.

¹⁴www.budget.gc.ca/2008/home-accueil-eng.asp

¹⁵Statistics Canada, Labour Force Activity.

¹⁶www.nsf.gov/statistics/infbrief/nsf08305/

¹⁷Communications Research Centre Canada – S&T and Innovation

¹⁸Communications Research Centre Canada – S&T and Innovation

¹⁹Communications Research Centre Canada, Technology Transfer and Commercialization.

²⁰Internal database.

²¹www40.statcan.ca/l01/cst01/busi02a.htm/

²²www40.st atcan.ca/l01/cst01/econ146a.htm?sdi=information communication technologies

²³www.ic.gc.ca/epic/site/sd-dd.nsf/en/sd00545e.html

²⁴www.ic.gc.ca/epic/site/sd-dd.nsf/en/sd00546e.html

²⁵Internal database.

²⁶Internal database.

²⁷cansim2.stat.ca/cgi-win/cnsmcgi.exe?Lang=
E&C2Fmt=HTML20&CIITpl=SNA_&ResultTemplate
=THEMSNA4&CORCmd=GetWrap&CORId=1067

²⁸www.ic.gc.ca/epic/site/tdo-dcd.nsf/en/home

²⁹cansim2.statcan.ca/cgi-win/cnsmcgi.pgm?Lang=E&SP_
Action=Result&SP_ID=1803&SP_TYP=4&SP_Sort=1

³⁰Internal database.

³¹Internal database.

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