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2010-11
Departmental Performance Report

Federal Economic Development Agency for Southern Ontario

The original version was signed by
The Honourable Christian Paradis
Minister of Industry and Minister of State (Agriculture)

The Honourable Gary Goodyear
Minister of State (Science and Technology) (Federal Economic Development Agency for Southern Ontario)

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Table of Contents

Minister's Message

Minister of State's Message

Section I: Organizational Overview

• Raison d'être
• Responsibilities
• Strategic Outcome and Program Activity Architecture (PAA)
• Organizational Priorities
• Risk Analysis
• Summary of Performance
• Expenditure Profile
• Estimates by Vote

Section II: Analysis of Program Activities by Strategic Outcome

• Strategic Outcome: The Economy of Southern Ontario Is Competitive and Diversified
• Program Activity: Community and Business Development
  • Performance Summary and Analysis of Program Activity
  • Lessons Learned
• Program Activity: Infrastructure
  • Performance Summary and Analysis of Program Activity
  • Lessons Learned
• Program Activity: Internal Services
  • Performance Summary and Analysis of Program Activity
• Canada's Economic Action Plan

Section III: Supplementary Information

• Financial Highlights
• Financial Statements
• List of Supplementary Information Tables

Minister's Message

I am pleased to present the 2010–11 Departmental Performance Report for the Federal Economic Development Agency for Southern Ontario (FedDev Ontario).

The Government of Canada is committed to supporting communities and businesses as they return to a cycle of prosperity. FedDev Ontario is a part of this vision of job creation and growth in southern Ontario.

Through programming created as part of Canada's Economic Action Plan, FedDev Ontario worked to meet the specific needs and priorities of the people of southern Ontario by investing in community development, innovation, and economic diversification, delivering on the Government of Canada's priority to create the right conditions for economic growth.

During the past year, FedDev Ontario played a leadership role through its investments in essential infrastructure, innovation and entrepreneurship, committing more than half a billion dollars in community and economic development funding to projects all across southern Ontario, while also delivering Canada's Economic Action Plan initiatives in Recreational Infrastructure Canada Program, the Community Adjustment Fund, as well as the Building Canada Fund.

As the Economic Action Plan moves into a new phase focused on long-term growth and prosperity, the investments made by FedDev Ontario will continue to create advantages, helping workers, communities and businesses position themselves to take advantage of opportunities as the economy recovers in Canada and around the world.

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Minister of State's Message

As Minister of State for the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), I am proud to submit the 2010–11 Departmental Performance Report.

The performance report outlines how FedDev Ontario is working to create a Southern Ontario Advantage by investing in people, businesses and communities. The FedDev Ontario mandate of promoting a strong and diversified southern Ontario economy has guided agency investment projects and strategic partnerships helping to create job opportunities and economic growth.

This year, FedDev Ontario promoted the development of a strong, competitive and diversified southern Ontario economy by:

• Committing $130.6 million in projects that support infrastructure.
• Delivering $246.5 million to projects that support community and business development.
• Concluding the first phase of initiatives under Canada's Economic Action Plan through Recreational Infrastructure in Canada, the Community Adjustment Fund and the Building Canada Fund.

Having laid the foundation for long-term economic growth, FedDev Ontario will continue to focus on building economic prosperity in communities across southern Ontario so the economy continues to grow now and into the future.

Section I: Departmental Overview

Raison d'être

Responsibilities

Mandate

The mandate of FedDev Ontario is to promote the development of a strong and diversified southern Ontario economy.

To fulfill its mandate, FedDev Ontario supports the competitiveness, innovation, and diversification of southern Ontario's economy by: delivering strategic investments to businesses, non-profit organizations and communities; establishing and strengthening collaborative partnerships with key economic stakeholders; and representing and advocating for the region's interests at the federal and national level.

Scope of Operations

FedDev Ontario is headquartered in Kitchener and has offices in Stratford, Peterborough, Toronto and Ottawa. Its catchment area covers southern Ontario, as defined by the following 37 Statistics Canada census divisions:

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According to Statistic Canada's annual population estimates for 2010, southern Ontario has a population of more than 12 million people, representing approximately 93 percent of Ontario's total population and 36 percent of the total population of Canada.

Governance

FedDev Ontario is part of the Industry Portfolio. Its President oversees agency operations and resources, and reports to the Honourable Gary Goodyear, Minister of State (Science and Technology), (Federal Economic Development Agency for Southern Ontario). The Executive Committee is the agency's main governing body. It sets strategic directions and develops, reviews, and approves plans, budgets and any other documents or submissions of strategic importance. The Executive Committee is composed of the agency President (who also acts as chair), Vice President of Infrastructure and Intergovernmental Affairs, Vice President of Business Innovation and Community Development, Chief Financial Officer, Director General of Audit and Evaluation, Director General of Communications, Director General of Strategic Policy, Director General of Human Resources and the President's Chief of Staff.

To support the overall governance of FedDev Ontario's work, a comprehensive internal committee structure exists including: Operations Committee, Policy Committee, Evaluation Committee, and a Senior Human Resources Committee.

Strategic Outcome and Program Activity Architecture (PAA)

The PAA below represents FedDev Ontario's inventory of program activities and program sub-activities for 2010–11, and the sole strategic outcome to which they are aligned. The PAA is supported by a performance measurement framework, which enables FedDev Ontario to track program-related performance and reflects informed decision making based on policy research and analysis, ongoing dialogue with stakeholders, and Government of Canada priorities.

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Organizational Priorities

Performance/Priority Status Legend

The following Performance/Priority Status Legend, as defined by the Treasury Board of Canada Secretariat in Part III: Report on Plans & Priorities (RPP) & Departmental Performance Report (DPR) Supporting Documents, applies throughout this document.¹

Status of meeting Priority 1: Establish the agency's internal services.

Priority	Type2	Strategic Outcome(s) and/or Program Activity(ies)
1. Establish the agency's internal services: Build an internal service structure and capability that allows the agency to effectively manage its affairs and minimize the amount of services procured under Memoranda of Understanding and contractual arrangements.	New	Program Activity 2.1 – Internal Services
Status: Mostly Met
During the 2010–11 fiscal year, the agency was able to build an internal service structure to administer its affairs. Throughout the course of the fiscal year, several key objectives were attained, such as consolidating all program payment processing at the Kitchener headquarters, allowing the agency to reduce its reliance on other service providers. With a significant increase in staffing levels throughout the year, the agency's internal service function was able to increase its self-sufficiency and reduce the risk posed by reliance on external service providers.

Status of meeting Priority 2: Develop the agency's organizational structure, plans, procedures and processes.

Priority	Type	Strategic Outcome(s) and/or Program Activity(ies)
2. Develop the agency's organizational structure, plans, procedures and processes: Adopt a proactive approach to planning and introduce efficient processes and policies for effective management.	New	Program Activity 2.1 – Internal Services
Status: Mostly Met
The agency continued to improve procedures and processes for Parliamentary relations, Access to Information and Privacy (ATIP), and Ministerial correspondence as well as establish a more robust internal service structure with improved financial, human resource, communication, audit and strategic policy groups. A Framework for Action establishing strategic directions and priorities for FedDev Ontario for 2011–12 was developed. The exercise engaged agency staff, at all levels and locations, through working groups and focus group sessions. The work resulted in the creation of a cross-agency working group focused on long-term planning. The Business, Innovation and Community Development sector (BICD) introduced more effective processes for stabilizing and centralizing its reporting and coordinating its various files processes. The agency continued to solidify and leverage a comprehensive internal committee structure that includes Executive, Operations, Policy, Evaluation, and Senior Human Resource Committees. This structure was established in 2009–10 to support the overall governance of FedDev Ontario's work and was augmented during 2010–11 to include a Review Board aimed at ensuring fairness in contracting and due diligence on large contributions. The agency established its first PAA and accompanying Performance Measurement Framework (PMF) and continues to engage in PAA and PMF renewal exercises to further define its objectives and performance and improve reporting and accountability to Canadians.

Status of meeting Priority 3: Develop the agency's research and policy capacity

Priority	Type	Strategic Outcome(s) and/or Program Activity(ies)
3. Develop the agency's research and policy capacity: Ensure the agency has the capacity to undertake research and policy analysis to help guide its programs and priorities.	New	Strategic Outcome 1 – The economy of southern Ontario is competitive and diversified
Status: Mostly Met
Through staffing, research and outreach activities, the agency created a base of knowledge and developed its capacity for policy analysis. For example, the agency now produces a monthly internal report on key economic indicators for the region, and has undertaken research and policy analysis that informed the development of the agency's new suite of Southern Ontario Advantage (SOA) initiatives and has supported the successful renewal of the Eastern Ontario Development Program (EODP). The agency continues efforts to engage partners and stakeholders, and to strengthen capacity in order to develop its knowledge base and provide timely intelligence and policy advice on the regional economy.

Status of meeting Priority 4: Develop program delivery capacity, such as fully trained staff, etc.

Priority	Type	Strategic Outcome(s) and/or Program Activity(ies)
4. Develop program delivery capacity, such as fully trained staff, etc.: Build community and business development program capacity to a level comparable to established infrastructure program delivery capacity.	New	Strategic Outcome 1 – The economy of southern Ontario is competitive and diversified
Status: Mostly Met
All agency staff had the opportunity to attend training on internal processes (e.g. Information Security, Briefing Note writing), and training tailored to specific areas of expertise (e.g. Risk Assessment to all Business Development Officers, Canadian Environmental Assessment Act screening). A Business Development Unit was established in the Business, Innovation, and Community Development sector for centralized reporting and coordination of sector files. Agency-wide training and information sessions were provided to introduce the newly created suite of seven SOA initiatives developed as part of the Southern Ontario Development Program (SODP). FedDev Ontario employees throughout the agency have Personal Learning Plans and Performance Management Agreements in place and new employees have completed or registered for required training courses offered by Canada School of Public Service.

Status of meeting Priority 5: Conduct outreach and consultations

Priority	Type	Strategic Outcome(s) and/or Program Activity(ies)
5. Conduct outreach and consultations: Champion dialogue with key stakeholders and citizens across southern Ontario.	Ongoing	Program Activity 1.1 – Community and Business Development; Program Activity 1.2 - Infrastructure
Status: Mostly Met
Agency officials have undertaken a number of formal and informal outreach activities and consultations with a variety of stakeholders, clients and potential partners, including: not for profit organizations, post-secondary institutions, industry associations, the private sector, other federal departments and agencies, and other orders of government. These activities helped to shape the SOA initiatives created in fall of 2010. Building on a number of engagement strategies and outreach plans that have been developed for specific stakeholder groups, a cross-agency working group was established to work on a comprehensive agency-wide engagement strategy. The President of FedDev Ontario is the Chair of the Ontario Federal Council – a venue to enhance coordination and collaboration with federal stakeholders in the region.

Status of meeting Priority 6: Develop effective program delivery mechanisms

Priority	Type	Strategic Outcome(s) and/or Program Activity(ies)
6. Develop effective program delivery mechanisms: Continue to develop program delivery approaches that maximize benefits to southern Ontario clients, e.g., broadening the scope of potential program delivery partners.	Ongoing	Program Activity 1.1 – Community and Business Development; Program Activity 1.2 - Infrastructure
Status: Met All
FedDev Ontario created and launched seven new SOA initiatives designed to support businesses and other organizations through partnerships and investments in skills and training, innovation, research and development, and increased productivity. The initiatives are strengthened by third-party delivery mechanisms involving a broad range of partners, including: PSIs; angel networks and associations; not-for-profit organizations; and, industry/sector organizations. The agency obtained an additional $1.7 million for the Community Futures (CF) Program designed to support Community Futures Development Corporations (CFDCs) in delivering support to southern Ontario-based businesses and communities. The agency also conducted a review of CF, which led to an improvement in the efficiency and effectiveness of the program and enabled better alignment to the overall FedDev Ontario mandate and strategic direction moving forward. FedDev Ontario has also successfully renewed EODP, which supports the 15 CFDCs in rural eastern Ontario. Both programs build on the successful delivery model of using CFDCs as third party delivery partners. FedDev Ontario also strengthened partnerships with other federal departments and agencies. For example, the agency established a $45 million partnership with the National Research Council's Industrial Research Assistance Program, enabling FedDev Ontario to extend its reach to small- and medium-sized enterprises (SMEs) to boost research and development capacity, increase innovation, create jobs and bring ideas from the laboratory to the marketplace.

Status of meeting Priority 7: Manage Economic Action Plan initiatives

Priority	Type	Strategic Outcome(s) and/or Program Activity(ies)
7. Manage Economic Action Plan initiatives: Since the Recreational Infrastructure Canada (RInC) and Community Adjustment Fund (CAF) expire in March 2011, give additional attention to performance and results measurement.	Ongoing	Program Activity 1.1 – Community and Business Development; Program Activity 1.2 - Infrastructure
Status: Mostly Met
RInC program supports the renewal and rehabilitation of recreational infrastructure projects representing a total multi-year federal investment of $188 million. By March 31, 2011, the program oversaw the completion of 342 projects with another 417 projects expected to produce final reports/confirmation of completion in 2011–12.3 In 2010–11, $121.6 million was paid out to 362 recipients and supported 761 projects under the RInC program. A reprofiling of funds from 2009–10 allowed RInC to increase its funding to projects beyond the originally planned $94.6 million, which produced greater results for the program than initially forecasted. The Building Canada Fund-Communities Component (BCF-CC) Top-Up was launched with a federal investment of $196 million to accelerate 187 projects in Ontario communities. As of March 31, 2011, a total of $100.8 million was paid out to recipients, which contributed to the completion of 82 projects with the program still awaiting final reports/confirmation of completion from 42 others (expected in 2011–12). On December 2, 2010, an extension of EAP initiatives to October 31, 2011, was granted, which included 230 RInC projects and 72 BCF-CC projects. The Community Adjustment Fund mostly met its objectives as 97 projects were completed and 15 projects were underway by March 31, 2011. A further 18 projects received extensions until October 31, 2011. CAF initially committed $123 million towards 130 projects in 79 communities across the region for 2010–11. On average, every federal dollar invested leveraged an average of 57 cents from recipients and these funds had a variety of purposes including: increasing production capacity, commercializing products, increasing access to capital, developing business incubators, strategic planning, as well as revitalization projects.

Status of meeting Priority 8: Continue to deliver legacy programs

Priority	Type	Strategic Outcome(s) and/or Program Activity(ies)
8. Continue to deliver legacy programs: Deliver programs on behalf of Infrastructure Canada through the FedDev Ontario regional network.	Ongoing	Program Activity 1.2 - Infrastructure
Status: Met All
During this reporting period the agency administered 2,619 projects across all the infrastructure programs that it delivers. An increase in project files was in large part due to the addition of EAP programming. Across the suite of infrastructure programming that FedDev delivers, $2 billion of federal investment leveraged a total of $7.2 billion in infrastructure investments. The agency oversaw the close-out of the Canada-Ontario Infrastructure Program (COIP) as a total of $680.7 million was allocated to over 500 projects during the entirety of the program.

Risk Analysis

Operating Environment

FedDev Ontario operates in a complex and rapidly changing economic landscape. The agency was created during a period of global economic crisis and was tasked with delivering a diverse set of programs in a timely and efficient manner, each with their own unique complexities. The agency launched SOA, an entirely new suite of seven initiatives, in its first full year of operation while continuing to administer existing critical infrastructure (i.e. RInC) and economic development programs (i.e. EODP); as well as deliver funding announced under Canada's Economic Action Plan (SODP, CAF, etc.). The agency has faced challenges on these programs and on a number of other priorities, all while working to develop the internal capacity required of a newly-created government department.

FedDev Ontario's operating environment continues to evolve as the economy recovers and the Government of Canada focuses on restoring fiscal balance. Due to the fact there was no ramping-up of funding across the five-year mandate, coupled with the continued establishment of internal capacity, the agency has faced difficulties allocating all funding in early years. While southern Ontario as a region faces a number of risks, its growth and prosperity will increasingly depend on its success in competitive global markets, the development of a highly skilled workforce, and a productive and innovative economy.

Risk Analysis

For southern Ontario, various external factors such as: international competition; declining manufacturing base; access to capital; skill shortages; a high Canadian dollar; and the need for a competitive, knowledge-based economy continue to pose potential risks and challenges. These challenges are heightened by a domestic and global economy that though recovering, continues to be uncertain and must be addressed in the context of government priorities that are shifting from stimulus to fiscal restraint. FedDev Ontario's focus prioritizes the agency to identify and demonstrate the value added in its strategic investments through solid research and analysis, innovative and efficient delivery, and timely evaluation of results.

The key internal factors and management challenges of FedDev Ontario to fulfill its mandate are linked to development phase as an organization. The ambitious targets and expected results associated with its programming, as well as the range and diversity of stakeholders and partners in the region also contribute to the challenges. The agency has worked hard to stabilize the organization over its first 18 months with the introduction of several new initiatives and enhancements to programs and processes that have improved its ability to respond to the involved parties. However, the focus remains on continuing to build a strong knowledge-base and capacity, implement sound management control, accountability frameworks, and mature governance practices, and to continue to establish and improve relations with external stakeholders and leverage their expertise.

Significant human resource challenges continue to exist considering the many diverse skill sets and competencies that are needed to ensure due diligence, delivery, and official language requirements are met. Critical to success is the attraction and retention of experienced people that collectively possess the necessary knowledge and capabilities to help build the organization. Furthermore, the continued focus for all staff to address identified gaps in intra-agency communications regarding program and policy changes, as well as personal learning and development plans, will be crucial to success.

With the creation of FedDev Ontario in August, 2009, an initial lack of internal capacity resulted in a number of services being provided by external sources. This reliance on external service providers posed a risk for the agency and efforts were made to reduce the dependency for various services including financial, administrative, and auditing functions. With a significant increase in staffing levels in 2010–11, the agency's internal service function was able to increase its self-sufficiency and adopt processes tailored to the requirements of FedDev Ontario to reduce the risk posed by reliance on external service providers.

As processes stabilize, and initial delivery and capacity issues are addressed, it will become increasingly important to demonstrate the value and stewardship of agency activities. FedDev Ontario will respond to these risks by placing a priority on staffing and retention strategies, learning and development priorities, and strategies that allow FedDev Ontario to leverage outside expertise. In addition, FedDev Ontario will continue to explore best practices for more efficient delivery, stronger advocacy, enhanced research and partnering capabilities, improved measurement and reporting practices and a mature evaluation framework.

Summary of Performance

2010–11 Financial Resources ($ millions)

Financial Resources from 2010–11 in Millions of $

Planned Spending	Total Authorities	Actual Spending
507.0	593.1	405.6

FedDev Ontario's financial resources directly impacted the ability of the agency to achieve its Strategic Outcome and deliver on its Program Activities as shown in the PAA. At the outset of fiscal year 2010–11, the agency's Planned Spending (based on its 2010–11 Main Estimates) totalled $507 million. Further adjustments through Supplementary Estimates during the year resulted in $593.1 million in Total Authorities.

The variance between Actual Spending and Total Authorities is largely as a result of lapsed money in SODP ($87 million); RInC ($39.4 million); and CAF ($28.1 million). SODP faced the combined challenges of building capacity while launching a new suite of Southern Ontario Advantage initiatives in 2010–11. RInC was granted an extension to October 31, 2011, as part of the EAP extension and 18 CAF projects were also extended to the same date. FedDev Ontario's financial resource breakdown is provided below by Program Activity and is further detailed for the above-mentioned programs in Section II of this document.

2010–11 Human Resources (full-time equivalents=FTEs)

Human Resources from 2010–11 in full-time equivalents

Planned	Actual	Difference
180	174.154	(5.85)

The table above provides a summary of the total planned and actual human resources for FedDev Ontario for fiscal year 2010–11. FedDev Ontario very nearly met its planned FTE target of 180 for the fiscal year, allowing the agency to stabilize its internal capacity and processes and reduce the risk posed by reliance on external service providers. The FTE breakdown by Program Activity and the resulting differences between planned and actual are presented in Section II of this document.

Strategic Outcome: The economy of southern Ontario is competitive and diversified

Performance Indicators	Targets	2010–11 Performance
Annual Gross Domestic Product (GDP) growth rate for southern Ontario.	3%	Exceeded target. 2010 real GDP growth rate for Ontario is 3.4%5

Program Activities for 2010–11 for Community and Business Development and Infrastructure

Program Activity	2009–10 Actual Spending6 ($ millions)	2010–117 ($ millions)				Alignment to Government of Canada Outcomes
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
Community and Business Development	N/A	395.0	395.0	400.7	257.9	An innovative and knowledge-based economy Strong economic growth
Infrastructure	N/A	98.4	98.4	172.4	130.6	Strong economic growth
Total	N/A	493.4	493.4	573.1	388.5

Further information on the financial resource totals above can be found in Section II: Analysis of Program Activities by Strategic Outcome.

Program Activity for 2010–11 in millions of dollars for Internal Services

Program Activity	2009–10 Actual Spending ($ millions)8	2010–11 ($ millions)
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
Internal Services	N/A	13.6	13.6	20.0	17.1

Expenditure Profile

Departmental Spending Trend

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The chart above demonstrates the progression of spending at FedDev Ontario from 2009–10 to 2010–11. The agency was not established until August 13, 2009, and, as a result, did not have a Main Estimate figure for fiscal year 2009–10. Reduced spending in 2009–10 when compared to 2010–11 can also be attributed to the need to staff the agency, develop programs and build capacity, while also establishing relationships with clients and stakeholders. These efforts to build agency capacity, coupled with the challenges of delivering a full suite of programs in 2010–11, limited the agency's ability to fully allocate all of its funding. With a greater complement of staff and program delivery processes in place, the agency will be in a better position to fully expend its future allocations.

The variances between Actual Spending and Total Authorities in 2010–11 are further detailed in Sections II and III of this document.

Estimates by Vote

For information on our organizational votes and/or statutory expenditures, please see the
2010–11 Public Accounts of Canada (Volume II) publication. An electronic version of the Public Accounts is available on the Public Works and Government Services Canada website. ⁹

Section II: Analysis of Program Activities by Strategic Outcome

Strategic Outcome: The Economy of Southern Ontario Is Competitive and Diversified

Southern Ontario is a cornerstone of the Canadian economic engine, accounting for almost 37 percent of national employment and nearly half of the country's manufacturing sector¹⁰. The diverse range of industries and communities in the region includes world leading companies, innovators and key clusters such as agri-food, autos, finance, life sciences, tourism and information and communication technologies. The challenges facing southern Ontario have been many in recent years and a number of communities, particularly those hard-hit by the downturn in the manufacturing sector, have been under significant pressure. Structural adjustments, in response to the emergence of new sources of competition, technological change and shifting consumer preferences, were already underway in the region. The onset of the global economic recession created new difficulties and further exacerbated the challenges the region was already facing.

Southern Ontario's economy has been recovering from the global recession. Recent economic performance across a number of key indicators has largely reflected progress toward pre-recession levels. According to Statistics Canada, real GDP advanced to 3.4 percent¹¹ in Ontario in 2010, rebounding from declines in 2009 and 2008.¹²

Employment recovery in southern Ontario has been relatively strong since the recession and is near pre-recession levels. In 2010, employment grew to 6.25 million jobs but fell short of the 2008 employment level of 6.3 million people.¹³

Relatively high unemployment rates remain a challenge and many workers and communities continue to face serious difficulties. For example, while unemployment rates have dropped since their recessionary peaks, metropolitan areas such as Windsor (10.9 percent), Peterborough (9.4 percent) and St. Catharines-Niagara (9.3 percent) continue to face some of the highest unemployment rates in the province when compared to the provincial average of 8.4 percent.¹⁴ Rural areas face a number of challenges as well, such as youth out-migration and low labour participation rates.

Over the medium- to longer-term, the region's competitiveness will increasingly depend on the success of: economic adjustment; productivity improvements; integration into global value chains; the attraction and development of a talented workforce; and, the region's performance as an innovator and global leader. Ongoing adjustments in core sectors and communities across the region are critical for improving productivity and enabling southern Ontario to compete in global markets and move up the value chain.

FedDev Ontario has made progress towards its strategic outcome through its investments in people, businesses and communities resulting in improved conditions for prosperity and new opportunities for jobs and economic growth in southern Ontario. Through the launch of a series of new initiatives in 2010–11, FedDev Ontario aims to build a Southern Ontario Advantage – its approach for returning southern Ontario to a cycle of prosperity – and will continue to make progress on its strategic outcome by helping to attract new businesses, and new national and foreign investors, while also supporting existing businesses and making sure they stay in southern Ontario.

Program Activity: Community and Business Development (CBD)

Program Activity Descriptions

The CBD program activity supports communities and businesses in southern Ontario by making the southern Ontario economy and its communities more competitive, innovative and diversified. This is achieved by increasing community and business capacity to respond to challenges, stimulating economic development, and promoting conditions that foster competitive businesses and strong, vibrant communities. Through this program activity, FedDev Ontario delivers and administers grants and contributions with not-for-profit organizations, other orders of government and businesses. The funds are used to enhance business productivity and competitiveness; provide entrepreneurs and small- and medium-sized enterprises with improved access to capital and business development information and services; and support community economic planning, development and diversification initiatives.

2010–11 Financial Resources ($ millions)

Planned Spending	Total Authorities	Actual Spending
395.0	400.8	257.9

2010–11 Human Resources (FTEs)

Planned	Actual	Difference
83	63.24	(19.76)

Performance Status against Target for Community and Business Development

Expected Results	Performance Indicators	Targets	Performance Status
Enterprises are contributing to community economic growth and viability	Percentage of SMEs assisted that maintained or increased their sales	70%	Met All (More than 3,164 businesses were supported through various programs)

Performance Summary and Analysis of Program Activity

Activity Overview

The focus of the CBD program activity in 2010–11 was to respond to the short-term pressures resulting from the economic downturn and the long-term challenges facing southern Ontario as it transitions toward a knowledge-based economy. Some of the key challenges facing the southern Ontario economy are labour and skills shortages in fields related to science, technology, engineering and mathematics (STEM); decreased access to capital to fund high-risk ventures; the need for greater collaboration between academia and business to commercialize new innovations more quickly; and increased capacity for communities to respond to local conditions while recognizing the benefits of operating in a regional economy.

The agency worked collaboratively with key economic stakeholders [e.g., businesses, start-ups, not-for-profits, post-secondary institutions, CFDCs and other orders of government] to create the conditions necessary to make the southern Ontario economy more competitive, innovative, and diversified. This was achieved by providing repayable and non-repayable contributions for projects that helped businesses improve productivity and commercialize new innovations, stimulate economic development in regional communities, provide increased access to capital, and support STEM graduates with financing for start-ups and internship opportunities in southern Ontario businesses. Investments were made through Program Sub-Activities such as SODP, CF, EODP, CAF and the Official Language Minority Communities (OLMC) Development Program.

Results Achieved

Southern Ontario Development Program

The SODP is the vehicle for delivering FedDev Ontario's core grants and contributions budget, committed through Budget 2009¹⁵. In 2010–11, the SODP sub-activity was enhanced with the development and launch of a suite of seven new strategic initiatives aimed at creating a Southern Ontario Advantage by assisting southern Ontario businesses and communities to transition from the region's traditional manufacturing base to a knowledge-based economy. These initiatives reflect stakeholder feedback achieved through outreach and consultation as part of Organization Priority 5 and are built on four pillars: People, Knowledge, Entrepreneurship and Prosperity. An important consideration in the design of these initiatives was the need to complement existing federal programming to ensure effective and efficient targeting of areas of need. This consideration led to close alignment of the initiatives with other Government of Canada initiatives such as the Science and Technology Strategy and complemented other programs and services delivered by FedDev Ontario.

Objectives of programs under the Southern Ontario Advantage initiative

Southern Ontario Advantage	Objectives
People Advantage
Youth STEM	Encourage youth to pursue education and careers in STEM. Improve youth's understanding of the business of science.
Graduate Enterprise Internship	Develop business and management skills in graduate students/ recent graduates of STEM programs to complement their technical skills.
Scientists and Engineers in Business	Develop improved business and management skills of STEM entrepreneurs in southern Ontario. Improve access to financing and/or business support services needed to successfully launch and manage start-up SMEs in southern Ontario.
Knowledge Advantage
Applied Research and Commercialization Initiative	Encourage greater collaboration between SMEs and post-secondary institutions. Accelerate innovation; improve productivity and competitiveness of SMEs.
Technology Development Program	Increased investment to bridge the gap between research and development and the commercialization of market-driven and "game-changing" technologies.
Entrepreneurial Advantage
Investing in Business Innovation	Accelerate the commercialization of new products, processes, and practices. Increase, stimulate and leverage private sector investment. Encourage growth of angel investment funds.
Prosperity Advantage
Prosperity Initiative	Increased economic diversification, improved productivity and enhanced competitiveness of southern Ontario regions and businesses.

The first of the SOA initiatives, the ARC initiative, was launched in April 2010 with the remaining six initiatives launched in the fall of 2010. In 2010–11, 273 SOA applications were received with 45 applications approved. A performance measurement strategy has been put in place to track the performance of projects funded under the SOA initiatives, including indicators such as the total value of funds leveraged, the number of person months of employment created, projected and actual sales, and the extent to which innovations were advanced (e.g., invention disclosures, intellectual property) as a result of FedDev Ontario contributions.

Largely as a result of the creation of the SOA initiatives, SODP helped create, expand or maintain 878 businesses and organization, exceeding its target of 700. SODP was also able to raise 80 cents from other sources for every dollar contributed by the program, which somewhat met its target ratio of 1:1. When five large projects funded under the earlier SODP General Intake and the Food and Beverage Initiative are removed, the ratio becomes 1.02:1, slightly exceeding the target.

During this reporting period SODP continued to deliver on multi-year projects and close out various initiatives from 2009–10. When analyzing the expenditures of the program, SODP distributed $72.2  million¹⁶ in contributions out of an allocated $159.2 million in total authorities. A number of factors impacted this lapse including the fact that funding for SODP was initially allocated evenly over the agency's five-year mandate and did not adequately reflect the need to staff the agency, develop programs and build capacity. In addition, given the effort required to create seven new initiatives under SODP (the Southern Ontario Advantage initiatives), these initiatives were not ready to be announced and rolled out until the fall of 2010. This resulted in a reduced number of 1) applications received; and 2) agreements put in place before the end of the 2010–11 fiscal year.

Eastern Ontario Development Program

The EODP was renewed under Budget 2009 as part of the EAP. The EODP supports the economic development and diversification of rural eastern Ontario communities. Working with the 15 CFDCs in eastern Ontario, the program exceeded its 2010–11 target of 50 Eastern Ontario businesses and organizations created, expanded or maintained as a result of support through EODP. Although the program did not meet its ambitious target of raising $4.50 in funds from other sources for every dollar contributed through EODP, (a ratio of 4.5:1), the actual ratio (2.7:1) exceeded the target set for the previous five years (2.5:1). EODP was successful in distributing its total authorities of $9.6 million.

In 2010–11, an evaluation of the program was conducted. It concluded the program is meeting its objectives, is aligned with Government of Canada and agency objectives, and is effectively managed. Throughout the reporting period, the agency also focused on the renewal of the EODP, as the program was scheduled to sunset on March 31, 2011. With its renewal announced in Budget 2011,¹⁷ the agency continues to work on improving the program's efficiency and effectiveness and aligning it with the agency's mandate and objectives.

Community Futures Program

The CF Program supports economic development and builds capacity in non-metropolitan communities in southern Ontario by providing funding to 37 CFDCs in the region. In 2010–11, the Program created, expanded or maintained 2,233 businesses and organizations in rural southern Ontario – mostly meeting its target of 2,250. It also met its target of raising $1.70 in funds from other sources for every dollar invested through the CF program (a ratio of 1.7:1). To achieve these results CF distributed its total authority of $12.5 million in contributions.

In 2010–11, the agency also conducted a review of the CF Program. This led to changes to improve the efficiency and effectiveness of the program and better align it with the agency's mandate and strategic direction moving forward.

Official Language Minority Communities Development Program

The OLMC Development Program is delivered through the agency's Economic Development Initiative (EDI) of the Government of Canada's Roadmap for Linguistic Duality 2008-2013: Acting for the Future. In 2010–11, the agency continued to support 22 projects funded in 2009–10 under the EDI, somewhat meeting its target number (35) of projects and activities in support of regional OLMCs. At the same time, it conducted a review of the initiative and implemented changes to improve effectiveness in future years. A continuous intake for proposals under the revised program took place in December 2010. A significant portion of the difference between the actual $500,000 distributed in contributions and the total authority of $2.9 million for the program is due to a temporary suspension of program delivery as program elements went through a redesign process.

Brantford Greenwich Mohawk Remediation Project

2010–11 saw no money actually spent in support of the project. Although negotiations were completed during the 2010–11 fiscal year, as of March 31, 2011, the recipient was still in the process or organizing the implementation of the project. The total authorities amount of $10.4 million for 2010–11 has been re-profiled to 2011–12.

Ontario Potable Water Program (OPWP)

The OPWP supported municipal investments in drinking water projects through the provision of grants in order to meet Ontario drinking water regulations. In 2010–11 the total authorities for this program were $22.5 million and were based on projected costs for all projects. The actual spending in 2010–11 was $12.2  million and reflected the final costs of the completed water projects. In this reporting period FedDev Ontario's focus was to close out the program by March 31, 2011.

Development Projects for Communities and Businesses Program

This program delivers short-term, targeted community and business development projects, primarily through the delivery and administration of contribution agreements to communities, not-for-profit organizations and small- and medium-sized businesses from the private sector. CAF provides contributions to projects within this program to enhance and accelerate community development as well as fund small- and medium-sized businesses, social enterprises, communities, post-secondary institutions and aboriginal organizations.

In 2010–11, $139.3 million was distributed in contributions out of a total authority for CAF of $167.4 million. The variance can be largely explained by two separate re-profile amounts of $42.5 million for 2009–10 commitments and a projected $7.5 million for 2011–12 for 18 projects that received extensions until October 31, 2011. The variance also reflects uncommitted funds and lapsed funds as a result of projects completing under budget.

Overall, the agency's performance for this Program Activity met expectations. The agency provided $246.5  million in grants and contributions toward CBD programs that will make the southern Ontario economy more competitive and diversified. Through contributions from the SODP, EODP and CF program, the agency helped create, maintain, or expand 3,164 businesses in southern Ontario and leveraged $157.5 million in funding from other sources. In addition, the agency provided grants to enable the successful close–out of OPWP.

Lessons Learned

One of the key lessons learned under this program activity is that continuous stakeholder feedback and collaboration is very beneficial when creating programs that respond to Canadians' needs and effectively and efficiently maximize the impact of Government of Canada funding.

The challenges of delivering a full suite of programs while the agency was still building capacity and developing new initiatives limited the agency's ability to fully allocate all of its funding. With a greater complement of staff and program delivery processes in place, the agency will be in a better position to fully expend its future allocations.

Finally, time is critically important. Despite outreach and engagement with various stakeholders, proposals submitted to the agency often require significant effort to bring together all of the necessary resources required to generate the greatest results.

Program Activity: Infrastructure

Program Activity Descriptions

FedDev Ontario delivers infrastructure programming in Ontario to ensure that communities have good quality and dependable infrastructure in place in the areas of water, sewage, and transportation infrastructures, and that residents benefit from access to this infrastructure. Through this program, FedDev Ontario delivers and administers contribution agreements with municipalities or contractors, which use these funds to create, renew, or enhance Ontario communities' infrastructure. This program benefits residents of Ontario by contributing to the development and maintenance of infrastructure in Ontario, thereby helping Ontario residents have access to quality infrastructure, meaning for example, access to water that is safe to drink, and roads that are safe to drive on.

2010–11 Financial Resources ($ millions)

Planned Spending	Total Authorities	Actual Spending
98.4	172.4	130.6

2010–11 Human Resources (FTEs)

Planned	Actual	Difference
32	29.17	(2.83)

Performance Status against Targets for Infrastructure

Expected Results	Performance Indicators	Targets	Performance Status
Ontario has the infrastructure required to sustain its development	Number of infrastructure projects administered	50	Exceeded (2,619)
	Ratio of funds raised from other sources for every dollar of Ontario infrastructure improvement	1:1	Exceeded (3.6:1)

Performance Summary and Analysis of Program Activity

Activity Overview

Strong, safe and modern communities are essential building blocks for Canada's competitiveness and long-term prosperity. Strategic infrastructure investments can be a catalyst for economic growth and quality of life. To that end, the programming that FedDev delivers ensures that throughout Ontario, infrastructure is built and renewed in partnership with local communities in a variety of investment categories such as: water, waste water, sewage, transportation, and recreation.

In 2010–11, FedDev Ontario continued to partner with Infrastructure Canada, the province of Ontario, and funding recipients, to support infrastructure investments throughout Ontario. FedDev Ontario, on behalf of Infrastructure Canada, delivers the Canada Strategic Infrastructure Fund, the Canada Ontario Municipal Rural Infrastructure Fund Program, the Municipal Rural Infrastructure Fund Top-up, and BCF-CC Regular and Top–Up Intakes. Grants and Contributions funding for the Municipal Rural Infrastructure Fund, BCF-CC, and the Canada Strategic Infrastructure Fund is provided through Infrastructure Canada's appropriation and is held in a suspense account while operating funds for the delivery of these programs is included in FedDev Ontario's estimates. Details on infrastructure program results for these programs may be found in Infrastructure Canada's DPR.

FedDev Ontario delivers the BCF-CC to Ontario communities with fewer that 100,000 residents in partnership with the Government of Ontario. The program supports public infrastructure owned by provincial, territorial and municipal governments and entities, as well as private industry. These jointly-funded projects ensure that Ontarians will benefit from increased employment opportunities, enhanced protection and management of drinking water sources, improved transportation safety and efficiency, as well as new and renewed cultural institutions and sport facilities.

Results Achieved

As detailed in Operational Priorities 7 and 8 above, during this reporting period, FedDev Ontario administered 2,619 projects across all the infrastructure programs that it delivers. This represented a total investment of $7.2 billion in infrastructure projects across all of Ontario, which included a federal investment of $2 billion (approx. 3.6:1). As well, over 4,600 claims were processed in this reporting period, representing payments of over $400 million to recipients.

Additionally in this reporting period, FedDev Ontario continued to deliver the RInC Program in parallel with the Province of Ontario's Recreation Program and administered the close-out of the Canada-Ontario Infrastructure Program.

With respect to RInC, FedDev Ontario is administering the delivery of 761 projects that have been allocated up to $188 million in investments across multiple years in key community recreational assets and facilities. During fiscal year 2010–11, RInC distributed $121.6 million in contributions out of a total authority of $161.1 million. This variance of $39.4 million accounts for nearly all of the difference between Total Authorities and Actual Spending shown in the table above for this Program Activity. The variance is largely due to the fact that projects were not able to immediately begin in fiscal year 2009–10 and, as a result, $66.5 million was re-profiled until 2010–11, causing higher than planned total authorities. With the inability to spend the total $161.1 million in 2010–11 and with the program receiving an extension to October 31, 2011, as part of the EAP extension, $35 million was re-profiled to 2011–12.

Furthermore, as part of Canada's EAP, a national top-up to the BCF-CC was launched, with a federal investment of $196 million, to accelerate 187 projects in Ontario communities. On December 2, 2010, an extension of EAP initiatives to October 31, 2011, was granted, which included 72 BCF-CC projects.

Lessons Learned

Each program that FedDev Ontario delivers, benefits from the lessons learned and evaluations and audits of previous infrastructure programming. No program audits or evaluations were required in this reporting period. Continual improvements in data management and client-service were evident in this reporting period.

Program Activity: Internal Services

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

2010–11 Financial Resources ($ millions)

Planned Spending	Total Authorities	Actual Spending
13.6	20.0	17.1

2010–11 Human Resources (FTEs)

Planned	Actual	Difference
65	81.74	16.74

Performance Summary and Analysis of Program Activity

Internal services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of our organization. These groups include only those activities and resources that apply across an organization and not those specific to a program.

With one of FedDev Ontario's primary operational priorities for 2010–11 being to establish the agency's internal services in the first year of operation, the spending and staffing variances noted in the tables above occurred as the agency was successfully able to build its internal service structure quicker than anticipated.

The Internal Service area also focused on continuing to develop its organizational structure in response to Operational Priority 1. The agency continued to increase and stabilize its staffing levels throughout the reporting period to improve its self-sufficiency and reduce the risk posed by reliance on external service providers. FedDev Ontario also worked to improve procedures and processes for Parliamentary relations, ATIP, and Ministerial correspondence to address Operational Priority 2.

Continued renewal and improvement of the agency's mandate and programs was also a priority as the agency established its first PAA and accompanying PMF for 2010–11 and continues to engage in PAA and PMF renewal exercises to further define its objectives and performance and improve reporting and accountability to Canadians.

As a new agency, FedDev Ontario was completing staffing processes in 2010–11 and created a new Framework for Action to help guide its activities in future years, better integrate service delivery, and track performance moving forward.

Canada's Economic Action Plan

The EAP is the Government of Canada's plan to help ensure a quick recovery from the economic downturn by focusing on the creation of short-term employment to support communities and the sectors that contribute to their viability. The national plan included such initiatives as the $1 billion CAF and the $500 million RInC program. Under the EAP, FedDev Ontario was responsible for the delivery of CAF in southern Ontario, RInC for all of Ontario, and EODP. It should be noted that in 2009–10 and 2010–11, the agency's core funding program, SODP, was also considered an EAP initiative. FedDev Ontario is also delivering BCF-CC top-up, for all of Ontario, on behalf of Infrastructure Canada.

Through these initiatives, FedDev Ontario contributed to the stabilization of the southern Ontario economy while establishing the foundation for a more prosperous future.

CAF

CAF is a national economic stimulus initiative that supports projects that create jobs and maintain employment in and around communities that have experienced significant job losses and lack alternative employment opportunities. As noted in Organizational Priority 7 in Section I, CAF initially committed $123 million in 2010–11 to fund 130 projects. Funding was provided to small- and medium-sized businesses, not-for-profit organizations, and municipalities in southern Ontario. Funding was used for a variety of purposes, including: increasing production capacity, commercializing products, increasing access to capital, developing business incubators, strategic planning, as well as revitalization projects. The 130 projects were located in 79 communities across southern Ontario. On average, every federal dollar invested leverage and average of fifty-seven cents from recipients. Eighteen projects have received an extension to October 31, 2011.

RInC

RInC is designed to provide timely, targeted stimulus to communities through investments that will create jobs and spur construction activity related to existing recreational infrastructure. It is also expected to encourage higher levels of participation in physical activity and community building. In Ontario, FedDev Ontario is delivering the program in parallel with the Province of Ontario's Recreation Program. Also mentioned in Organizational Priority 7 (Section I of Report), FedDev Ontario continued to work with the Ontario government in 2010–11 to administer and deliver the Ontario portion of RInC. In total, $188 million in federal funds was invested in 761 projects. On December 2, 2010, Canada announced an extension to the construction completion deadline from March 31, 2011 to October 31, 2011 for a number of EAP programs, including RInC. Extensions were approved for 230 projects.

SODP, EODP and BCF-Top-up

Further information on these EAP initiatives can be found in sections 2.1.1 and 2.1.2

Of note, through the EAP audit, conducted by the Office of the Auditor General, RInC and BCF exceeded auditors' expectations with respect to due diligence.

Section III: Supplementary Information

Financial Highlights

The financial highlights presented on the following pages offer an overview of FedDev Ontario's financial position and operations.

Condensed Statement of Financial Position
As at March 31, 2011 ($ thousands)

	% Change	2010–11	2009–10
Total assets	137%	269,735	113,918
Total liabilities	90%	190,770	100,393
Equity of Canada	484%	78,965	13,525
Total	137%	269,735	113,918

Condensed Statement of Operations
For the year ended March 31, 2011 ($ thousands)

	% Change	2010–11	2009–10
Total expenses	63%	341,698	209,997
Total revenues
Net cost of operations	63%	341,698	209,997

Financial Statements

http://www.feddevontario.gc.ca/eic/site/723.nsf/eng/home

List of Supplementary Information Tables

All electronic supplementary information tables found in the 2010–11 Departmental Performance Report can be found on the Treasury Board of Canada Secretariat website. ¹⁸

• Details on Transfer Payment Programs
• Internal Audits and Evaluations

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[Footnotes]

¹ – Note: The Management and Operational Priorities as presented in the 2010–11 RPP do not have defined indicators and targets or planned activities and outputs associated with them. As a result, the status for each are determined through a combination of qualitative and quantitative analysis. Return to text

² – "Type" is categorized as follows: Previously committed to—committed to in the first or second fiscal year before the subject year of the report; Ongoing—committed to at least three fiscal years before the subject year of the report; and New—newly committed to in the reporting year of the DPR. Return to text

³ – Note: A further 2 projects originally planned under RInC are now not expected to be completed. Including these two, the total number of initial planned projects was 761. Return to text

⁴ – All Actual FTE figures include Interchange Canada employees within FedDev Ontario. Return to text

⁵ – Source: Statistics Canada, real GDP by industry. Data is for all of Ontario. GDP data is not available for southern Ontario. Return to text

⁶ – 2009–10 Actual Spending figures not applicable due to a lack of a formal 2009–10 PAA for FedDev Ontario. Return to text

⁷ – Commencing in the 2009–10 Estimates cycle, the resources for Program Activity: Internal Service is displayed separately from other program activities; they are no longer distributed among the remaining program activities, as was the case in previous Main Estimates. This has affected the comparability of spending and FTE information by Program Activity between fiscal years. Return to text

⁸ – 2009–10 Actual Spending figures not applicable due to a lack of a formal 2009–10 PAA for FedDev Ontario Return to text

⁹ – See Public Accounts of Canada 2010, http://www.tpsgc-pwgsc.gc.ca/recgen/txt/72-eng.html Return to text

¹⁰ – Labour Force Survey by economic region, Statistics Canada Return to text

¹¹ – GDP at basic prices, by industry. Millions of chained dollars (2002) Return to text

¹² – GDP by industry, Statistics Canada Return to text

¹³ – Labour Force Survey by economic region, Statistics Canada Return to text

¹⁴ – Unemployment rates for individual communities are in-house calculations of the average unemployment rate over the period of April 2010 and March 2011, using data from the Labour Force Survey by census metropolitan area, Statistics Canada. Unemployment rate for the province is also a calculation of the average unemployment rate for the same period using the Labour Force Survey, Statistics Canada Return to text

¹⁵ – http://www.budget.gc.ca/2009/pdf/budget-planbugetaire-eng.pdf Return to text

¹⁶ – Note: This total excludes the $0.2 million expenditure for the O'Connor Irish Heritage House Project as it was a separate Treasury Board submission and was only administered by SODP Return to text

¹⁷ – http://www.budget.gc.ca/2011/home-accueil-eng.html Return to text

¹⁸ – See 2010–11 Part III—Departmental Performance Reports (DPR): Supplementary Information (Tables), http://www.tbs-sct.gc.ca/dpr-rmr/2010-2011/index-eng.asp. Return to text