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As Minister responsible for Western Economic Diversification Canada (WD), I am pleased to present the Departmental Performance Report for the year ending March 31, 2010.
WD works to support the long-term development and diversification of the western economy, playing a vital role in helping build a stronger West and a stronger Canada. The department achieves its mandate by collaborating with other orders of government and stakeholders to identify projects that support the department's strategic outcomes and priorities.
By investing in projects and activities that encourage innovation and entrepreneurship, strengthen community economic development, and ensure western Canadians have access to the essential infrastructure they need, WD is helping the Government of Canada deliver on its priorities.
Over the past year, as Canada and the world have faced an economic downturn, WD has also been instrumental in helping deliver Canada’s Economic Action Plan (EAP) in Western Canada. Specifically, WD has been responsible for delivering the Community Adjustment Fund and Recreational Infrastructure Canada program in the West. These programs delivered targeted and timely economic stimulus that helps create and maintain jobs, improve the health and quality of life of our communities, and build the foundation for Canada’s future growth and prosperity.
As the world begins to see modest steps towards economic growth and recovery, WD will work diligently to deliver the second year of EAP in Western Canada and continue its work to diversify the western economy and build a stronger West for a stronger Canada.
The Honourable Jim Prentice, P.C., Q.C., M.P
As Minister of State for Western Economic Diversification (WD), I am pleased to present the Departmental Performance Report for the year ending March 31, 2010.
WD's mandate is to promote the development and diversification of the economy of Western Canada and to advance the interests of the West in national economic policy, program and project implementation. In order to meet these goals, the department focused its work on three, interconnected strategic outcomes:
Western innovators and entrepreneurs are a vital source of economic growth in the West, accounting for nearly half of all existing jobs in the region. In 2009-2010, WD approved funding of $43.7M for 33 projects that support innovation. These projects will help strengthen our knowledge-based economy by improving infrastructure at our universities and research centres, developing technology skills, and supporting research and development. WD also approved funding of $61.8M for 141 projects that help stimulate international trade and investment, enhance business productivity and competitiveness, foster industry collaboration, and improve access to services for western entrepreneurs. WD is also committed to advocating on behalf of western Canada, including the development and application of the federal procurement and Industrial and Regional Benefits (IRB) policy. WD is also a business facilitator, partnering with, and promoting western Canadian firms and organizations to Prime Contractors that have IRB obligations.
In addition, WD played a major role in Canada’s Economic Action Plan (EAP) consistent with its reputation for delivering timely and effective programming on behalf of the federal government. WD was responsible for the delivery of the Recreational Infrastructure Canada (RInC) program, the Community Adjustment Fund (CAF), and assisted Infrastructure Canada in delivering the Building Canada Fund top-up funding that was announced in Budget 2009. As of March 31, 2010, nearly 100 per cent of the total combined EAP federal funding allocation for CAF and RInC of approximately $440M had been committed towards 1,004 projects across the West. These projects are helping western Canadian communities and industries most affected by the downturn get back on their feet.
As we navigate the second and final year of EAP, WD will continue its work delivering CAF and RInC for western communities. However WD's work won't stop there - we will continue to focus on growing a competitive western economy that responds to the needs of industry, both locally and abroad to ensure that Western Canada is stronger than ever.
The Honourable Lynne Yelich, P.C., M.P
Western Economic Diversification Canada’s (WD) mandate is to promote the development and diversification of the economy of Western Canada (Manitoba, Saskatchewan, Alberta and British Columbia) and to advance the interests of Western Canada in national economic policy, program and project development and implementation.
As the federal economic development department for Western Canada, WD is responsible for developing and supporting economic policies, programs and activities that assist Western Canada in responding to the economic challenges and opportunities it faces and promoting economic growth, development and diversification. The department’s three strategic outcomes - Entrepreneurship and Innovation, Community Economic Development, and Policy, Advocacy and Coordination - establish the framework of objectives, priorities, activities, and results pursued by the department to implement its mandate.
The western Canadian economy is an important part of the Canadian economy as a whole. The four western provinces have a combined Gross Domestic Product (GDP) equal to or slightly larger than that of Ontario. About one third of Canadians live in the West. Economic activity and trade flows in the West are closely linked to the United States (US) - which accouts for over 60 per cent of exports of western provincial output - and increasingly to the large and growing economies of the Asia-Pacific region. Western Canadian issues, economic performance, and economic development opportunities are an essential part of national economic and industrial policy and strategy.
Economic growth and prosperity in Western Canada have been largely resource-driven, benefitting from prolonged periods of high demand and high commodity prices. While the West’s natural resources are expected to provide a strong foundation for future economic growth, the resource-driven growth has masked a number of fundamental challenges facing Western Canada’s long-term economic prospects. The strong economic performance of many fast-growing economies such as China, Korea, India, and Brazil, which combine low-cost production with new technology and business innovations, are eroding the competitive position of many western Canadian firms. Low levels of new business investment in Western Canada in research and development (R&D), new technologies and equipment outside of the major resource sectors compared to many of our closest competitors have also resulted in declining productivity and competitiveness in both domestic and international markets.
To respond to these challenges WD will build on the West’s existing advantages and strengths and help create new strengths by supporting the development of new and emerging sectors of our economy.
Western Canada’s natural resources have supported the creation of industry clusters in sectors such as mining, forestry, oil and gas, and agricultural production, which anchor economic growth in the West and have a strong presence in the global marketplace. In order to maintain the competitive position of western Canadian businesses and increase the value they create in Western Canada, WD invests in projects that help businesses increase their productivity and competitiveness through the development, adoption and commercialization of new technologies and business processes. The department also seeks to help businesses increase the economic output of these sectors through higher value-added production, and gain access to highly competitive global markets through greater awareness and exposure to supply chain management and lean manufacturing processes.
WD also supports and investing in the creation of new economic strengths across the West. Since WD was created in 1987, Western Canada has become home to major research centres and industries that either did not exist or were very different in scale and nature. For example, the large and leading-edge Information and Communications Technologies (ICT) sector in Western Canada has experienced rapid growth over the past 20 years and is stimulating the creation of new technologies and industry clusters in areas such as new media and digital communications. The West has witnessed the advent or increased sophistication of many other leading edge technologies with commercial and business applications such as carbon capture and environmental management technology, composite materials for aerospace and transportation sectors, biotechnology and medical devices, and light source technology. These innovations provide the foundation for future economic growth and diversification, and help ensure that the West’s world-class scientific and R&D capacity lead to world-class business opportunities for Western Canada. In some cases these opportunities arise from the creation and commercialization of new technologies and processes. In others, the opportunities are the result of identifying new markets for western Canadian businesses.
WD partners with other organizations in pursuit of its strategic outcomes. WD’s partners include: other orders of government, academic and research institutes, industry associations, not-for-profit organizations, as well as members of the Western Canada Business Service Network (WCBSN). The Western Economic Partnership Agreements (WEPA) enable WD and the western provinces to collaborate to identify regional diversification opportunities and make strategic investments that help strengthen the long-term viability of local and regional economies.
The 2009-2010 Departmental Performance Report (DPR) provides an overview of WD’s performance and results over the year, based upon the plans and priorities identified in WD’s 2009-2010 Report on Plans and Priorities (RPP) tabled in Parliament on March 26, 2009. It also highlights a number of activities undertaken by the department, and projects supported by WD’s grants and contributions (G&C) program budget, to demonstrate how the department’s activities have benefited western Canadians.
As reflected in its DPR, WD’s investments helped ensure that western entrepreneurs have the tools they need to remain competitive in a global economy, that western innovators and researchers have the facilities and expertise to bring new innovations to market, and that western communities have a diversified economic base. Policy development activities identified key trends and ensured that programs and investments meet the department’s mandate, fit within the overall federal agenda, and reflect the priorities of western communities.
Consistent with its role as a delivery agent for federal priorities, WD also played a key role in 2009-2010 in responding to the impacts of the global economic downturn by helping stimulate economic growth and creating or maintaining jobs. By supporting opportunities for economic growth, investing in infrastructure and delivering short-term stimulus under Canada’s Economic Action Plan (EAP), the department has ensured the long-term economic vitality of western communities.
The Program Activity Architecture (PAA) below represents WD’s inventory of program activities and program sub-activities for 2009-2010, and the strategic outcomes towards which they contributed. The PAA is supported by a performance measurement framework that enables WD to track program-related performance in order to inform design, delivery, and resource allocation decisions and to better achieve results.
Strategic Outcomes | Program Activities | Program Sub-Activities |
---|---|---|
Entrepreneurship and Innovation | Business Development and Entrepreneurship | Improve Business Productivity |
Market and Trade Development | ||
Industry Collaboration | ||
Foreign Direct Investment | ||
Access to Capital | ||
Innovation | Technology Adoption and Commercialization | |
Technology Linkages | ||
Technology Research and Development | ||
Community Innovation | ||
Technology Skills Development | ||
Knowledge Infrastructure | ||
Community Economic Development | Community Economic Planning, Development, and Adjustment | Community Planning |
Community Development | ||
Community Economic Adjustment | ||
Infrastructure | Green Municipal Infrastructure | |
Local Transportation Infrastructure | ||
Cultural, Recreational, Tourism, Telecommunications, and Affordable Housing Infrastructure | ||
Policy, Advocacy and Coordination | Collaboration and Coordination | |
Advocacy | ||
Research and Analysis | ||
Internal Services (supports all strategic outcomes) | Governance and Management Support | |
Resource Management Services | ||
Asset Management Services |
WD measures its annual contribution towards the achievement of its three strategic outcomes. Despite the impacts of the economic downturn, WD successfully met or exceeded the majority of its performance targets in 2009-2010. The extraordinary events of 2009-2010 produced important lessons learned for consideration in the development of the department’s 2010-2011 RPP.
In a year of significant economic challenges for the West, WD successfully mobilized new resources and adapted its existing programs to respond to the economic needs of western Canadians. At the heart of WD’s response was the rapid delivery of the EAP, which provided new employment opportunities and economic stimulus to counter the impacts of the economic downturn.
While delivering on the federal government’s EAP was a top priority in 2009-2010, the department continued to deliver its ongoing programs in support of the diversification and development of the western Canadian economy. These included:
WD’s performance during 2009-2010 is summarized in the following tables:
Departmental performance against its targets is explained in greater detail, both by strategic outcome at the program activity level, in Section II of this report. The online version of the DPR includes hyperlinks to WD’s web site, where more details of the
results of WD-funded projects are provided.
Planned Spending | Total Authorities | Actual Spending |
---|---|---|
$242,521 | $477,110 | $421,303 |
Planned | Actual | Difference |
---|---|---|
401 | 468 | -67 |
WD’s total authorities were nearly double its planned spending as a result of new funding received through Supplementary Estimates and the Budget Implementation Act mainly to deliver two EAP programs, $139.2M for the Community Adjustment Fund (CAF, excluding $13.5M transferred to 2010-2011) and $64.2M for the Recreational Infrastructure Canada (RInC) program.[1] Actual spending was lower than total authorities, primarily due to the transfer of contractual commitments to future years including: RInC, Mountain Pine Beetle (MPB) Initiatives, Alberta and Saskatchewan Centenaries (ASC) Initiative and International Vaccine Centre's (InterVac) Biosafety Level III Containment Facility in Saskatoon.[2]
The actual number of full-time equivalent (FTE) positions was greater than planned due to increases in staff required to deliver EAP initiatives.
Macro-level economic indicators, as noted in the table below, are monitored by the department to provide an economic context for planning and priority setting. The targets for 2009-2010 outlined below were based on performance trends and recent economic forecasts.
Performance Indicators | Targets | 2009-2010 Performance |
---|---|---|
Real GDP growth | 3.2% (Stable growth rate) | -3.7% (2009 Decrease based upon preliminary provincial data) |
Annual International Trade: value of exports excluding primary production sectors | $42.922B (Increase) | $34.965B (2009 - Decrease) |
Research & Development (R&D) intensity: Gross Domestic Expenditures on R&D (GERD) as % of GDP | 1.3% (Stable) | 1.2% (2007 - Stable; most recent data available) |
Program Activity | 2008-2009 Actual Spending |
2009-2010 | Alignment to Government of Canada Outcomes | |||
---|---|---|---|---|---|---|
Main Estimates |
Planned Spending |
Total Authorities |
Actual Spending |
|||
Business Development and Entrepreneurship | 62,275 | 48,587 | 48,849 | 52,420 | 46,941 | Strong Economic Growth |
Innovation | 77,466 | 77,001 | 77,264 | 80,598 | 86,869 | An Innovative and Knowledge-based Economy |
Total | 139,741 | 125,588 | 126,113 | 133,018 | 133,810 |
Performance Indicators | Targets | 2009-2010 Performance |
---|---|---|
Disposable income per capita | $31,082 (Increase) | $31,178 (2008 - Increase; most recent data available) |
Labour productivity growth - real GDP per hour worked | 1.2% (Stable growth rate) | 2.2% (2009 - Increase in rate of growth; based upon preliminary GDP data) |
Program Activity | 2008-2009 Actual Spending |
2009-2010 | Alignment to Government of Canada Outcomes | |||
---|---|---|---|---|---|---|
Main Estimates |
Planned Spending |
Total Authorities |
Actual Spending |
|||
Community Economic Planning, Development and Adjustment | 71,234 | 81,093 | 81,280 | 94,161 | 58,540 | Strong Economic Growth |
Infrastructure | 19,254 | 7,566 | 7,566 | 10,719 | 8,178 | Strong Economic Growth |
Total | 90,488 | 88,659 | 88,846 | 104,880 | 66,718 |
Growth in Western Canada’s labour productivity over 2009 was due to a greater proportional decrease in hours worked, compared to the contraction in the economy.
Community Economic Planning, Development and Adjustment - The difference between total authorities and actual spending is primarily due to the transfer of the contractual commitment for the ASC Initiative (Royal Alberta Museum) of $25.2M to future years and expenditures incurred against other program activities, such as Internal Services.
Infrastructure - Planned and actual spending does not include G&C resources administered by WD on behalf of Infrastructure Canada (Municipal Rural Infrastructure Fund (MRIF) and Canada Strategic Infrastructure Fund (CSIF)) through Other Government Department (OGD) suspense account, as this amount (approximately $133.4M in actual spending) is reported by Infrastructure Canada.
Performance Indicators | Targets | 2009-2010 Performance |
---|---|---|
Percentage of key informants with the opinion that WD activities provide policies and programs that support the economic development of Western Canada. | 55% | 94% (with respect to policies) 93% (with respect to programs)(2008-2009) |
$’s of project funding ($’s WD project funding plus $’s leveraged) | $350.040M | $1.56B (Based upon total project costs of all approved projects in 2009-2010) |
% of projects completed this fiscal year that successfully met or exceeded performance targets | 85% | 91% |
Program Activity | 2008-2009 Actual Spending |
2009-2010 | Alignment to Government of Canada Outcomes | |||
---|---|---|---|---|---|---|
Main Estimates |
Planned Spending |
Total Authorities |
Actual Spending |
|||
Collaboration and Coordination | 4,945 | 2,888 | 2,888 | 3,292 | 3,467 | Strong Economic Growth |
Advocacy | 3,602 | 3,246 | 3,246 | 3,796 | 3,344 | Strong Economic Growth |
Research and Analysis | 3,397 | 2,629 | 2,666 | 2,851 | 1,835 | Strong Economic Growth |
Total | 11,944 | 8,763 | 8,800 | 9,939 | 8,646 |
|
Program Activity | 2008-2009 Actual Spending |
Alignment to Government of Canada Outcomes | ||||
---|---|---|---|---|---|---|
2009-2010 | ||||||
Main Estimates |
Planned Spending |
Total Authorities |
Actual Spending |
|||
EAP | - | - | - | 207,400 | 186,314 | Strong Economic Growth |
Total | - | - | - | 207,400 | 186,314 |
|
Funding for the EAP initiatives was announced in Budget 2009, and received through Supplementary Estimates and the Budget Implementations Act.
Program Activity | 2008-09 Actual Spending |
Alignment to Government of Canada Outcomes | ||||
---|---|---|---|---|---|---|
2009-2010 | ||||||
Main Estimates |
Planned Spending |
Total Authorities |
Actual Spending |
|||
Internal Services | - | 18,762 | 18,762 | 21,873 | 25,815 | |
Total | - | 18,762 | 18,762 | 21,873 | 25,815 |
|
Commencing in the 2009-2010 Estimates cycle, the resources for this program activity are displayed separately, rather than being distributed among the remaining program activities, as was the case in the previous Main Estimates. This has impacted the comparability of financial and human resources information by program activity between fiscal years.
In the 2009-2010 RPP, WD identified four operational priorities and three management priorities. The operational priorities are areas of the department’s programs and services identified as top priorities for action, while management priorities focus on enhancements to internal management, consistent with the objectives of the Management Accountability Framework (MAF) established by the Treasury Board of Canada.
Operational Priorities | Type[3] | Status[4] | Links to Strategic Outcomes and Program Activities |
---|---|---|---|
Technology Commercialization | Ongoing | Met all |
Contribution of priority to strategic outcome: Investments in 2009-2010 will help to strengthen the western Canadian innovation system. |
|
|||
Trade and Investment | Ongoing | Met all |
Contribution of priority to strategic outcome: Investments in 2009-2010 will support a competitive and expanded business sector in Western Canada. |
|
|||
Business Productivity and Competitiveness | Previously committed to | Mostly met |
Contribution of priority to strategic outcome: Investments in 2009-2010 will support a competitive and expanded business sector in Western Canada. |
|
|||
Rural Diversification | Previously committed to | Mostly met |
Contribution of priority to strategic outcome: Investments in 2009-2010 will support the development and diversification of the rural economy across the West, which contributes to all of WD’s strategic outcomes. |
|
Management Priorities | Type | Status | Links to Strategic Outcome(s) |
---|---|---|---|
Public Service Renewal | Previously committed to | Met all | Public service renewal supports all strategic outcomes. |
|
|||
Performance Measurement | Previously committed to | Mostly met | Performance measurement supports all strategic outcomes. Area for improvement: Now that processes are in place to track progress against targets, need to do more work to ensure that performance data better informs decision-making. |
|
|||
Integrated Risk Management | Previously committed to | Met all | Integrated risk management supports all strategic outcomes. |
|
Successful achievement of WD’s strategic outcomes depends on the department’s ongoing ability to identify, assess and manage enterprise-wide risks. WD’s Executive Committee reviews and approves the department’s corporate risk profile annually to ensure relevance and to inform departmental planning. The key risks which impacted WD’s performance in 2009-2010 are outlined below.
The global economic downturn had a significant impact on the largely commodity-based economies of Western Canada. Of the four western provinces, only Manitoba, with its diversified economic base, avoided a major decline in its overall economic performance in comparison to the other western Canadian and Canadian provinces. As a region, Western Canada’s economy contracted by 3.7 per cent and lost more than 100 thousand jobs in 2009. To address the challenges related to the global economic recession, the Government of Canada tasked WD with the delivery of CAF and RInC in Western Canada, as part of EAP.
The economic downturn exposed the vulnerability of a commodity-based economy to rapidly evolving economic shifts and revealed persistent weakness in innovation and productivity - as reflected by R&D expenditures, investment in ICT, and university income from the commercialization of intellectual property. WD identified four operational priorities for 2009-2010 to address these vulnerabilities: 1) technology commercialization, 2) trade and investment, 3) business productivity and competitiveness, and 4) rural diversification. A summary of actions and overall performance against these operational priorities is provided in Section I, above. In addition, an assessment of the contribution of each WD program activity to these operational priorities, as well as the extent to which external risks hindered the achievement of targets, is presented in Section II.
As part of its on-going integrated risk management process, WD identified nine key internal risks which might inhibit the successful delivery of the department’s mandate. Risks such as performance measurement and public service renewal were selected as management priorities for 2009-2010 and results of mitigation efforts are captured in Section I. Since risk mitigation measures were also incorporated into the design and development of WD’s EAP initiatives, through these initiatives WD has demonstrated the ability of its partners to undertake priority activities, has solidified its strong reputation among stakeholders and partners for effective and relevant programming, and has underscored it’s ability to deliver an effective and consistent communications message.
WD’s longer term resource challenges were addressed through the approval of an additional $14.7M per year in long-term stable program funding for the Western Diversification Program (WDP) in Budget 2010. WD also carried out an external readiness assessment in preparation for adopting new accounting practices and to aid in demonstrating the effectiveness of its financial control framework and in strengthening budget management.
Figure 1
Spikes in actual spending over the past four years can be attributed to one-time initiatives such as the MPB initiatives, ASC Initiative, and InterVac, which WD delivered in addition to its core programs. As indicated separately in the table above, 2009-2010 actual spending was augmented by the delivery of three EAP initiatives: CAF, RInC, and on-going funding for the Canada Business Network (CBN).
The wind down of some prior initiatives may also impact the department’s level of spending from year to year. For example, expenditures under the Infrastructure Canada Program (ICP) decreased over the last three years from $30.6M in 2007-2008, to $12.9M in 2008-2009 and to $3.7M in 2009-2010, whereas expenditures related to the MPB initiatives increased from $2.8M in 2007-2008 to $21.0M in 2009-2010.
The figures presented in the above chart do not include funds spent through Other Government Department (OGD) suspense accounts, on behalf of other departments. For example, in fiscal 2009-2010, WD expended approximately $133.4M on behalf of Infrastructure Canada to deliver MRIF and CSIF.
Under EAP, WD was responsible for the delivery of RInC, CAF, and the on-going CBN funding in Western Canada. The department spent a total of $186.3M in 2009-2010. WD is also delivering the Building Canada Fund (BCF) top-up funding on behalf of Infrastructure Canada, which was announced in Budget 2009, within WD’s existing operating funding levels.
Vote # or Statutory Item (S) | Truncated Vote or Statutory Wording | 2007-08 Actual Spending |
2008-09 Actual Spending |
2009-2010 Main Estimates |
2009-2010 Actual Spending |
---|---|---|---|---|---|
1 | Operating expenditures | 45,018 | 49,645 | 41,725 | 54,991 |
5 | Grants and contributions | 197,120 | 187,009 | 195,245 | 226,147 |
(S) | Community Adjustment Fund | - | - | - | 133,437 |
(S) | Contributions to employee benefit plans | 5,017 | 5,481 | 4,801 | 6,712 |
(S) | Collection Agency Fees | 3 | - | - | 2 |
(S) | Minister of Western Economic Diversification | - | 25 | - | 2 |
(S) | Spending of Proceeds from disposal of Surplus Crown Assets | 2 | 13 | - | 12 |
Total | 247,160 | 242,173 | 241,771 | 421,303 |
The significant differences in Vote 1, 5 and statutory spending between 2008-2009 and 2009-2010 are due to the inclusion of the EAP initiatives. CAF is included as a Statutory Item; RInC is included in Vote 1 and Vote 5; and ongoing Canada Business Network funding is included under Vote 1.