ARCHIVED - Economic Development Agency of Canada for the Regions of Quebec

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Message from the Minister responsible for the Agency

I am pleased to sign this Departmental Performance Report at the end of a fiscal year marked by economic challenges.

More than ever, owing to the current economic times, this report points to the timeliness of the initiatives and programs implemented and administered by the Agency to ensure the vitality of communities and growth of enterprises in Quebec.

The report demonstrates that the Agency’s regular programming, focussing on the development and diversification of communities and the growth of enterprises and regions, is geared to Quebec’s economic realities.

This report also highlights the Agency’s ability to react diligently so as to enable enterprises and communities to be better equipped during an economic downturn. Despite the hard times, our economy today stands on a solid foundation, the best among industrialized nations. Thus, in a perspective of consolidating and enhancing our position, the Government of Canada is continuing to implement Canada’s Economic Action Plan. Announced on January 27, 2009, this plan aims to ensure a rapid economic recovery and sustainable growth.

Thus, in order to address the crisis and stimulate the country’s economy, the Government of Canada has introduced immediate measures of some $30 billion to help Canadians and support enterprises.

I am delighted at the contribution made by the Agency, which, through its action, reinforces our economic base by working toward the outreach of our enterprises and the well-being of our communities.

Original signed by

 

Christian Paradis
Minister of Public Works and Government
Services and Minister responsible for the
Economic Development Agency of Canada
for the Regions of Quebec

Message from the Minister of State for the Agency

I am proud to present the Departmental Performance Report prepared by the Economic Development Agency of Canada for the Regions of Quebec for the period ending March 31, 2009.

In its desire to offset the impact of the economic crisis, the Agency rapidly proposed measures to support the development of SMEs, particularly those in devitalized regions. In the wake of my tour of the regions, we announced the implementation and enhancement of several measures.

Such measures include the Community Adjustment Fund; the Business Startup and Succession Fund; the new policy on NPOs; revised financial assistance with respect to tourist accommodation establishments; and greater flexibility in several components of the Major Economic and Tourism Facilities measure.

Thus, I am also pleased to point out that, as at March 31, 2009, the Agency had $665.2 million in planned investments to support the startup or continuation of all the 1,165 development projects in progress. The Agency’s contributions have had a significant leverage effect in the regions of Quebec, since these projects have led to $2.4 billion in total investment. This investment has contributed to the pre-startup, startup, development and maintenance of more than 2,964 enterprises and the creation of more than six jobs on average per SME receiving direct assistance.

The economic situation called for rapid, tangible measures and decisions from us, and we have played our role in full. Quebec’s SMEs and regions have many challenges to meet, and the Agency is working to provide them with all its support.

Original signed by

 

Denis Lebel
Minister of State for the
Economic Development Agency of Canada
for the Regions of Quebec

1 Agency Overview

1.1 Summary information

1.1.1 Raison d’être of the Agency

Mission

The object of the Agency is to promote the long-term economic development of the regions of Quebec by giving special attention to those where slow economic growth is prevalent or opportunities for productive employment are inadequate. In carrying out this mission, the Agency shall take such measures as will promote cooperation and complementarity with Quebec and the communities of Quebec.

Vision

In the long term, Quebec’s regions and communities will have increased their develop-ment capabilities, dynamism and prosperity in a lasting and significant manner for the benefit of their citizens.

Core mandate

Regular programs:

• Community Diversification
• Business and Regional Growth
• Regional Development Research
• Community Futures Program (CFP)

Special mandates

Programs mandated by the Government of Canada:

• Infrastructure Canada Program – Canada-Quebec Agreement 2000
• Canadian Apparel and Textile Industries Program (CATIP) – CANtex component

1.1.2 The Agency in action

The Agency’s aim is to increase the vitality of communities and strengthen the competitiveness of small- and medium-sized enterprises (SMEs) and regions while giving due consideration to the realities of Quebec’s regions. Through its programs and presence in the regions, the Agency provides financial assistance, guidance and consulting services, analyses, forward-looking studies, referrals and information. It covers the entire province with its 14 business offices and delivers support to communities, SMEs and non-profit organizations (NPOs).

Program priorities

• Continue the economic diversification of regions and communities posting slow economic growth
• Strengthen the performance of innovative, competitive SMEs in key sectors

Management priorities

• Implement the Departmental Action Plan with regard to the report of the Independent Blue Ribbon Panel on effective program delivery
• Continue improving management of expenditures, results and risk.

Program activity architecture

The table below shows the full framework of the Agency’s program activities and subactivities and how they further its three strategic outcomes. This report presents an overview of the performance achieved in 2008-2009 in relation to these components.

Strategic outcomes	Program activities	Program subactivities
Dynamic and revitalized communities that have a better socio-economic outlook and are developing their economic activity base	Development of communities	Community mobilization Community development Attractive communities
	Infrastructure	Water quality Highways and public transit Urban and regional projects Special infrastructure-dedicated programs
	Special intervention measures	Community adjustment to economic shocks Community adjustment to natural disasters
Presence of conditions conducive to sustainable growth and the competitive positioning of SMEs and regions	Competitiveness of enterprises (SMEs)	Development of enterprises’ capabilities Strategic enterprises
	Competitive positioning of sectors and regions	Competitiveness poles International promotion of regions
Policies, programs and cooperative actions that strengthen the economy of Quebec regions	Policies, programs and initiatives	Analysis and research Policies and programs Representation and influence Cooperation and collaboration

1.2 Performance summary

Financial resources1 for 2008-2009 (in thousands of dollars)
Planned spending	Total authorities	Actual expenditures
292,655	302,443	299,247

The Agency made full use of its budget. In fact, it had at its disposal $302.4 million, of which it used $299.2 million, or 98.9%. Furthermore, the variance between planned spending and total authorities is primarily attributable to the appropriations received during the year for the establishment of a broadband network in the James Bay territory ($2 million), development of international cruises on the St. Lawrence and Saguenay rivers ($1 million) and the Social Economy Initiative in Quebec ($2.9 million).

Human resources for 2008-2009 (Full-time equivalents)
Planned resources	Actual resources	Variance
411	401	-10

1.2.1 Strategic outcome #1: Dynamic and revitalized communities that have a better socio-economic outlook and are developing their economic activity base

Performance indicator	Five-year target (from 2007-2008 to 2011-2012)	Performance 2008-2009
Measurement of communities’ diversification	Communities’ vitality is maintained or increased.	The Agency contributed to maintaining communities’ vitality through implementation of 134 development and diversification projects, strengthening of the regional tourism offering generating $61.3 million in investment and support for the creation, development and maintenance of 2,811 SMEs, primarily in the seven devitalized regions and 21 most devitalized regional county municipalities (RCMs). Leverage effect2: $1 from the Agency = $2.64 in investment by the promoter and other funding sources.

Program activities (in thousands of dollars)	Actual expenditures 2007-2008	Main Estimates 2008-2009	Planned spending 2008-2009	Total authorities	Actual expenditures 2008-2009	Link to Government of Canada performance
Development of communities	169,479	130,974	130,974	146,616	145,906	Strong economic growth3
Infrastructures	48,866	27,313	27,313	53,864	53,607
Special intervention measures	—	—	—	—	—
Total	218,345	158,287	158,287	200,480	199,513

The variance between planned spending and actual expenditures is primarily attributable to a reallocation pursuant to strategic outcome #2 and additional funding during the year. As a result of the economic downturn, some projects could not be carried out with respect to the competitiveness of SMEs and regions, thus freeing up funds. Consequently, additional investment was made under this strategic outcome, so it was possible to continue meeting the needs of communities and regions in these hard economic times.

1.2.2 Strategic outcome #2: Presence of conditions conducive to sustainable growth and the competitive positioning of SMEs and regions

Performance indicator	Five-year target (from 2007-2008 to 2011-2012)	Performance 2008-2009
Measurement of SMEs’ and regions’ competitiveness	The competitiveness of SMEs assisted and the regions is maintained or increased.	The Agency contributed to SMEs’ and regions’ competitiveness by the sales growth observed in 120 SMEs assisted, support for 248 new exporting SMEs, improved productivity of 216 SMEs, and creation and expansion of 153 innovative enterprises. Leverage effect: $1 from the Agency = $2.71 in investment by the promoter and other funding sources

Program activities (in thousands of dollars)	Actual expenditures 2007-2008	Main Estimates 2008-2009	Planned spending 2008-2009	Total authorities	Actual expenditures 2008-2009	Link to Government of Canada performance
Competitiveness of enterprises (SMEs)	70,387	81,327	81,327	58,036	56,466	Strong economic growth4
Competitive positioning of sectors and regions	46,367	45,528	45,528	37,194	37,038
Total	116,754	126,855	126,855	95,230	93,504

The variance between planned spending and actual expenditures is attributable to the fact that, in the economic downturn, enterprises put their investment projects on hold, thus using fewer program resources than expected. It was decided to reallocate the funding from this strategic outcome. Thus, additional investment was made in infrastructure projects and economic diversification of communities.

1.2.3 Strategic outcome #3: Policies, programs and cooperative actions that strengthen the economy of Quebec regions

Performance indicator	Five-year target (from 2007-2008 to 2011-2012)	Performance 2008-2009
Measurement of the Agency’s ability to cater to the needs of Quebec regions, communities and SMEs	Alignment of Agency policies, programs and initiatives with Quebec regions’ needs and Government of Canada priorities	The Agency developed its ability to cater to the needs of regions, communities and SMEs through the completion of five studies; development and implementation of four initiatives; taking into account of the needs of regions, communities and SMEs as garnered from a Ministerial tour of the 14 regions; and participation in two trade missions to support SMEs in entering into contracts with major contractors.

Program activity (in thousands of dollars)	Actual expenditures 2007-2008	Main Estimates 2008-2009	Planned spending 2008-2009	Total authorities	Actual expenditures 2008-2009	Link to Government of Canada performance
Policies, programs and initiatives	7,369	7,513	7,513	6,733	6,230	Strong economic growth5
Total	7,369	7,513	7,513	6,733	6,230

1.2.4 Contribution of priorities to strategic outcomes

Program priorities	Type	Progress	Links to strategic outcomes
Continue the economic diversification of regions and communities posting slow economic growth Investment target: 50-55% of commitments approved in the regions and communities targeted in 2008-2009	Previously committed to	Surpasses expectations Performance: 65% of commitments approved	SO #1 Making the terms and conditions of the Community Diversification program more flexible reinforced this intention during the year. Two initiatives were in progress, primarily targeting the seven devitalized regions and 21 devitalized RCMs6 (Community Economic Diversification Initiative – CEDI-Vitality and Major Economic and Tourism Facilities).
Strengthen the performance of innovative, competitive SMEs in key sectors Investment target: 30-35% of total commitments approved in 2008-2009.	Previously committed to	Meets all expectations Performance: 32% of commitments approved.	SO #2 Three new initiatives were implemented (productivity support, innovation support, including natural resources testing and experimentation, and export support).

Management priorities	Type	Progress	Links to strategic outcomes
Implement the Departmental Action Plan with regard to the report of the Independent Blue Ribbon Panel on effective program delivery	New	Meets all expectations Web site providing better access to the programs and services offered by the Agency Revised project approval process, reducing processing times in line with targeted goals for 90% of projects approved7 Design of an enhanced claims process to alleviate administrative burden on promoters7 Integration of existing tools and development of new tools to support advisors’ work for effective management of program delivery7 Enhanced risk managment procedure for projects in development7	SO #1 and SO #2 The formative evaluation indicates that the Agency now meets its announced standards8 with respect to processing times in the vast majority of cases.
Continue improving management of expenditures, results and risk	Previously committed to	Surpasses expectations Direct deposit and automatic withdrawal system implemented7 Pilot project in progress to test a system that records all non-financial activities carried out Optimization of a process for collecting contribution repayments7 In support of better results-based management, standardized instructions and updated system for follow-up on performance data for grant and contribution projects7 Development of the data warehouse7 Management dashboard developed7 Corporate risk management process brought up to date (updated corporate risk profile and mitigation strategies)	SO #1 and SO #2 The formative evaluation mentioned that the Agency should continue with implementation of the five-year strategy by emphasizing ownership of results-based management.

1.2.5 Risk analysis and organizational context

Economic context

When the Report on Plans and Priorities 2008-2009 (RPP) was drafted, in Fall 2007, there were no signs of any major downturn in the economy. While the first half of the year was profitable for many sectors of the Quebec economy (e.g. construction, transportation equipment and tourism), the province entered a recession in the final quarter of 2008. The U.S. economic slowdown and the deteriorating global economy curbed Quebec’s exports. Furthermore, the economy uncertainty led to a decline in domestic demand, also contributing to the deterioration of the provincial economy. Quebec’s gross domestic product (GDP) shrank by 0.7% in 2008-2009, compared with a 2.4% increase in 2007. International commodity exports fell 12.4% from the second quarter of 2008 to the first quarter of 2009. Over the same period, the jobless rate rose from 7.4% to 8.0%.

After facing rapidly rising energy and raw material costs, Quebec’s manufacturing sector had to deal with falling demand on global and local markets. This sector lost 30,000 jobs from the first quarter of 2007 to the first quarter of 2009 (-5.4%), including 15,000 jobs in 2008-2009 alone.

Internal context

The Agency identified the eight key risks it had to manage in 2008-2009. These risks concerned in particular its ability to cater to the needs of Quebec enterprises and regions in hard economic times; reliability of performance data and its impact on decision-making; implementation of an information management policy; and the consistency of its external communication products. Mitigation strategies were put in place for each of the risks identified. The initiatives contained in these strategies form the core of the Agency’s two management priorities.

More specifically, in order to enhance the quality of performance data, the Agency opted in 2008-2009 for a new data collection methodology. Follow-up on project performance was increased, so the annual survey is no longer needed for obtaining those data.

1.2.6 Expenditure profile

The Agency’s actual expenditures for 2008-2009 were $299.2 million, including $242.5 million in grants and contributions. The Agency’s planned spending will increase in 2009-2010, to $461.2 million, including $400.2 million in grants and contributions as a result of the temporary funding allocated in budget 2009, Canada’s Economic Action Plan, for Canada’s economic recovery.

The figure below illustrates trends in grant and contribution expenditures over a six-year period.

Trends in grant and contribution expenditures

1.2.7 Voted and statutory items⁹

The table below replicates the summary table from the Main Estimates and shows appropriations voted (Main Estimates) by Parliament and funds used (actual expenditures).

(in thousands of dollars)			2006-2007	2007-2008	2008-2009
Vote or statutory item (S)	Truncated vote or statutory wording		Actual expenditures	Actual expenditures	Main Estimates	Actual expenditures
1	Operating expenditures		43,664	45,663	44,104	45,955
5	Grants and contributions		316,125	285,784	237,959	242,518
(S)	Contribution to employee benefit plans		5,085	4,934	5,324	4,922
(S)	Minister responsible for the Economic Development Agency of Canada for the Regions of Quebec - Salary and motor car allowance		—	—	—	24
(S)	Spending of proceeds from disposal of surplus Crown assets		25	4	—	2
	Total		364,899	336,385	287,387	293,421

Actual grant and contribution expenditures for 2008-2009 were down compared with 2007-2008, particularly because of the end of the grant to the Québec Port Authority and the Agency’s efforts to cut back in the context of the 2006 spending review. The variance between actual expenditures and the Main Estimates is attributable to new appropriations received during the year through supplementary estimates.

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Notes:

1 All amounts presented under financial resources include the cost of services received without charge.

2 The method for calculating the leverage effect was modified in 2008-2009. The leverage effect presented in this report is calculated by dividing the total costs of approved projects (excluding the Agency’s part of the funding) by the total financial assistance approved by the Agency. The leverage effect excludes the Infrastructure program activity and the grant to the Québec Port Authority.

3 Section 2 makes the link with Government of Canada results - www.tbs-sct.gc.ca/report/govrev/06/cp-rc04-eng.asp. The Agency targets the economic diversification of Quebec’s devitalized regions and sectoral competitiveness (of SMEs and regions) in order to ensure enhanced quality of life and a higher standard of living for Canadians.

4 Section 2 makes the link with Government of Canada results - www.tbs-sct.gc.ca/report/govrev/06/cp-rc04-eng.asp. The Agency targets the economic diversification of Quebec’s devitalized regions and sectoral competitiveness (of SMEs and regions) in order to ensure enhanced quality of life and a higher standard of living for Canadians.

5 Section 2 makes the link with Government of Canada results - www.tbs-sct.gc.ca/report/govrev/06/cp-rc04-eng.asp. The Agency targets the economic diversification of Quebec’s devitalized regions and sectoral competitiveness (of SMEs and regions) in order to ensure enhanced quality of life and a higher standard of living for Canadians.

6 See Appendix 1 for a list of the seven devitalized regions and 21 devitalized RCMs: www.dec-ced.gc.ca/eng/publications/agency/rmr.html

7 These achievements were part of the strategy to mitigate key risks which the Agency had to manage in 2008-2009.

8 Service standards indicate processing times between 35 and 65 days, depending on project scale.

9 The amounts presented in this table exclude services received without charge.

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