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

• Previous Page
• Table of Contents
• Next Page

This page has been archived.

Message from the Minister

I am pleased to sign this Departmental Performance Report, which presents the achievements of the Economic Development Agency of Canada for the Regions of Quebec and the outcome of its action.

In Canada and in Quebec, the economic downturn of the past few years has spared no area of activity. Previously sound sectors have shown signs of instability, while other already beleaguered sectors have been hit hard.

Faced with this difficult context, the Government of Canada quickly brought in an economic action plan comprising numerous initiatives aimed at re-energizing our economy. Canada was thus one of the industrialized nations least affected by the crisis and, consequently, one of the first to recover from it.

Over the past year, then, the Agency has continued to implement temporary initiatives in support of the most shaky regions and sectors in our economy. For instance, under the Temporary Initiative for the Strengthening of Quebec’s Forest Economies (TISQFE), the Agency has supported secondary wood processing projects as well as forest community diversification projects.

The projects falling under Canada’s Economic Action Plan (CEAP) that were implemented by the Agency have yielded tangible results. Through the Community Adjustment Fund, the Agency supported 231 projects between 2009 and 2011 to foster the creation and maintenance of employment in the hardest-hit communities. Through the Recreational Infrastructure Canada program, the Agency has supported 209 projects aimed at increasing recreational infrastructure construction activity and creating jobs.

As of March 31, 2011, in addition to CEAP-related projects, the Agency has supported the startup and continued implementation of some 1,000 development projects, building in particular on the development of enterprises’ strategic capability, innovation, creation of SMEs and enhancement of regional assets. On average, each $1 invested by the Agency has generated $2.72 invested by promoters and other funding sources.

I am convinced that the government’s action will be crucial in ensuring that the economic recovery continues and grows. I am proud of the Agency’s intervention over the past year, and am convinced that it makes the Agency a significant agent of development in all regions of Quebec.

Denis Lebel
Minister of Transport, Infrastructure and Communities and Minister of the Economic Development Agency of Canada for the Regions of Quebec

1 Agency Overview

1.1 Raison d’être

Object

Under its Act, which came into effect on October 5, 2005, 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 its object, the Agency shall take such measures as will promote co-operation and complementarity with Quebec and communities in Quebec.

Vision

In line with its object, the Agency aims for all Quebec communities and small- and medium-sized enterprises (SMEs) to participate to their full potential in the economy of tomorrow, building on their own assets. In the long term, they will be more competitive and innovative.

1.2 Responsibilities

Pursuant to its mandate, the Agency aims to increase communities’ vitality and reinforce the competitiveness of Quebec’s enterprises and regions. Through its 14 business offices and its advisors, it covers all areas of Quebec, where it acts primarily in relation to SMEs and non-profit organizations (NPOs). The Agency offers financial assistance directly to SMEs and NPOs, as well as information and accompaniment services, while referring clientele as required to other federal departments and agencies. The Agency also encourages communities in their mobilization and recovery efforts so as to help them diversify their economies.

In addition, the Agency fosters the economic development of rural and urban communities through its support for Community Futures Development Corporations (CFDCs), Community Economic Development Corporations (CEDCs) and Business Development Centres (BDCs).

Agency programs and initiatives in 2010-2011

Programs:

• Community Diversification
• Business and Regional Growth
• Regional Development Study

Canada-wide program implemented in Quebec by the Agency:

• Community Futures Program

Infrastructure programs:

• Building Canada Fund
• Municipal Rural Infrastructure Fund
• Canada Strategic Infrastructure Fund
• Infrastructure Canada Program

Ad-hoc initiatives:

• Temporary Initiative for the Strengthening of Quebec’s Forest Economies
• Linguistic Duality Economic Development Initiative

Canada’s Economic Action Plan initiatives¹ (for further details on CEAP initiatives, see section 2.9):

• Community Adjustment Fund
• Recreational Infrastructure Canada program

Furthermore, Canada’s Economic Action Plan (CEAP) provided the Agency with additional funding for 2009-2010 and 2010-2011. Used as an economic stimulus, this funding was intended to create employment opportunities and implement adjustment measures in communities affected by the economic downturn. CEAP primarily includes the Recreational Infrastructure Canada (RInC) program and the Community Adjustment Fund (CAF) initiative, which is delivered through the Community Diversification and Business and Regional Growth programs.

1.3 Strategic outcome and Program Activity Architecture (PAA)

To fulfil its mandate, the Agency aims to attain the strategic outcome: A competitive and diversified economy for the regions of Quebec. The following table presents the Agency’s PAA and shows the full framework of program activities and subactivities, as well as their contribution to the strategic outcome.

Strategic outcome	Program activities	Program subactivities	Internal services
A competitive and diversified economy for the regions of Quebec	Community development	Community mobilization Local and regional enterprises Tourism and community facilities	Governance and management support Resource management services Asset management services
	Infrastructure	Water quality Roads and public transit Urban or regional projects Special infrastructure-dedicated programs2
	Special intervention measures	Community adjustment to economic shocks3 Community adjustment to natural disasters SOLELY AS REQUIRED, AD-HOC FUNDING
	Enterprise competitiveness	Enterprises’ strategic capability Strategic enterprises
	Competitive positioning of sectors and regions	Growth poles International promotion of regions
	Policies, programs and initiatives	Analysis and research Policies and programs Representation, influence and collaboration

1.4 Departmental priorities

During FY 2010-2011, the Agency met the expectations of its seven priorities.

Priority: Facilitate communities’ adjustment to economic shocks

Type: Priority previously committed to during 2009-2010

Links to program activities: Infrastructure, Special intervention measures

Status:⁴ Met all expectations

• Between 2009 and 2011, the Agency supported 231 projects through the CAF for which contribution expenditures amounted to $81 million. Also under this initiative, seven Canada-Quebec Agreements – Job Creation Initiatives were also implemented. The Agency provided $119 million under these agreements.
• Since the RInC program began in 2009-2010, the Agency has supported 209 projects for which contributions of some $62 million were made.

Priority: Support the economy of tomorrow by strengthening SMEs’ productivity and performance

Type: New priority – Committed to during 2010-2011

Links to program activities: Enterprise competitiveness

Status: Met all expectations

• To support the economy of tomorrow, the Agency contributed to strengthening SMEs’ productivity and performance by concluding 169 new contribution agreements in 2010-2011, for $160.6 million in authorized financial assistance. These represent new projects building on strengthening the commercialization of innovation and creating innovative enterprises.

Priority: Support communities’ development

Type: Priority previously committed to during 2009-2010

Links to program activities: Community development

Status: Met all expectations

• In 2010-2011, the Agency focussed on supporting projects likely to mitigate socio-economic difficulties and facilitate the economic diversification of communities and regions by concluding 144 new contribution agreements, for $73.7 million in authorized financial assistance. These represent new projects aimed at supporting the creation of viable SMEs of local or regional scope, and projects contributing to increasing communities’ attraction capability through the development of a distinctive tourism offering and the presence of community facilities.

Priority: Support regional economic development stakeholders’ decision-making processes

Type: Priority previously committed to during 2009-2010

Links to program activities: Policies, programs and initiatives

Status: Somewhat met expectations

• Following the call for proposals issued in fall 2009 for the completion of studies on changes in the manufacturing sector, an analysis of all the proposals received was carried out by an evaluation committee consisting of representatives of private agencies and Agency advisors.
• In 2010-2011, the Agency concluded five contribution agreements in support of regional development study projects, representing $315,000 in authorized financial assistance.
• The dissemination of knowledge on the challenges, issues and best practices in regional development will be carried out once the study projects are completed.

Priority: Increase analysis and sharing of performance information

Type: Priority previously committed to during 2009-2010

Links to program activities: Internal services

Status: Mostly met expectations

• Over the past year, the Agency continued to implement its performance measurement strategy. It provided reliable performance data, contributing to policy design, drafting of the summative evaluation of the Community Diversification and Business and Regional Growth programs, and completion of the 2010 strategic review.
• The performance data provided and the subsequent analysis conducted also influenced the renewal of the Agency’s Strategic Framework and Program Activity Architecture. Over the next few years, the Agency will be placing greater emphasis on broader internal circulation of program performance data, so as to foster greater ownership of results-based management throughout the Agency.

Priority: Continue integrating risk management into decision-making

Type: Priority previously committed to during 2009-2010

Links to program activities: Internal services

Status: Met all expectations

• In line with the requirements of the Management Accountability Framework, the Departmental risk profile was updated and integrated with the RPP and DPR 2010-2011 (see section 1.5), and with the Agency’s integrated planning process and Governance Framework.
• With a view to the deployment of a new risk-based claims processing procedure aimed at contributing to reducing the administrative burden on promoters, a pilot project was completed. The statistical model and the technological solution adopted in the short term were tested.

Priority: Renew the Agency's policy directions

Type: New priority – Committed to during 2010-2011

Links to program activities: Internal services

Status: Met all expectations

• A dedicated team, supported by a directors’ committee, has drawn up a new strategic framework for the Agency, as well as a draft Program Activity Architecture, both of which will come into effect in 2012. Agency employees were consulted within the framework of this work.

1.5 Risk analysis

To attain its results, the Agency has to have an overview of the changing factors that have an impact on its environment and to integrate these factors into its decision-making processes so as to respond more effectively to the needs of Quebec enterprises, communities and regions.

External risks

While the recent recession was less marked in Quebec and Canada than in most industrialized countries, the economic recovery has proven to be just as fragile there.

On the one hand, the challenges presented in the Agency’s RPP 2010-11 concerning the competitiveness and restructuring of the manufacturing sector remain. The fragility of the U.S. economy has had an impact on the volume of exports of many Quebec enterprises. The strong Canadian dollar, while allowing enterprises to acquire imported equipment at lower cost, has reduced exporting manufacturing firms’ profit margins and brought down the prices of imported products. In the face of growing competition from emerging nations, many Quebec manufacturing enterprises are choosing to abandon some of their activities. For some communities, this situation translates into the disappearance of enterprises and job losses.

On the other hand, the risks presented in the RPP 2010-11 concerning the decline in consumer spending and the postponement of private investment did not materialize. Consumers and enterprises remained confident despite the economic uncertainty, and took advantage of low interest rates to consume and invest more than the previous year.

In this context, the effort invested by the Agency over the past two years in delivery of CEAP combined with SMEs’ efforts to enhance their competitiveness contributed to attaining the Government of Canada’s priorities.

Internal risks

Over the past year, the Agency conducted follow-up on its key risk profile. This presented the risk sectors most likely to affect attainment of the Agency’s expected results and its performance in terms of the effectiveness and efficiency of management practices. The Agency implemented and conducted follow-up on the mitigation strategies established in its risk profile.

1.6 Performance summary

This section provides an overview of planned and actual financial resources (grants and contributions, and operations) and human resources expressed as full-time equivalents (FTEs), along with a summary table portraying the Agency’s performance in 2010-2011.

Financial resources for 2010-2011 (in thousands of dollars)

Planned spending	Total authorities	Actual expenditures
463,350	537,329	480,006

Variance between planned spending and total authorities

The variance between planned spending and total authorities is primarily attributable to the awarding of new funding for: support for vulnerable communities, through the Community Diversification and Business and Regional Growth programs; the Community Futures Program (CFP); the Infrastructure Canada Program (ICP); and for implementation of the Temporary Initiative for the Strengthening of Quebec’s Forest Economies (TISQFE). The reprofiling of funding for the Recreational Infrastructure Canada (RInC) program from 2009-2010 to 2010-2011 also contributed to increasing the variance.

Variance between total authorities and actual expenditures

Most of the authorities obtained for 2010-2011 were used. Most of the unspent funding, in particular for RInC, the TISQFE, the Support Initiative for International Cruise Development, the Linguistic Duality Economic Development Initiative and the Montreal Planetarium project, was carried forward to 2011-2012.

Human resources for 2010-2011 (FTEs)

Planned resources	Actual resources	Variance
417	442	25

The variance of 25 FTEs primarily represents additional resources hired to deliver the programs and initiatives for which new funding was awarded, as listed above, and to meet the Agency’s operational needs.

Strategic outcome: A competitive and diversified economy for the regions of Quebec

Performance indicators

• Impact of dollars invested by the Agency on GDP and employment
• Survival rate and sales of SMEs supported by the Agency

Five-year target (2007-2008 to 2011-2012)

The competitiveness and economic diversification of Quebec regions are maintained or increased.

Performance 2010-2011⁶

Leverage effect:⁷

• The amount of multiyear financial assistance approved by the Agency for supporting Quebec communities and SMEs stood at $685.7 million and generated $1.86 billion in investment by promoters and other funding sources.
• $1 from the Agency = $2.72 in investment by the promoter and other funding sources

Incentive aspect of assistance:

• The evaluation of the Community Diversification and Business and Regional Growth programs indicates that without the assistance received from the Agency, it would have been impossible to carry out most of the projects.

Survival rate:⁸

• Enterprises receiving Agency assistance posted a higher survival rate than comparable enterprises. Thus, close to three quarters of enterprises assisted in 2002 were still in operation seven years later (2009), compared with 68.5% for enterprises in the control group.

Sales:

• During the period 2002-2009, enterprises which received financial support from the Agency posted stronger sales growth performance than a control group consisting of comparable enterprises which did not receive Agency support.
• Thus, the sales of Agency-supported enterprises rose by 72% between 2002 and 2009, whereas those receiving no Agency support saw their sales increase by 47%.

Strategic outcome: A competitive and diversified economy for the regions of Quebec
(in thousands of dollars)

Program activities	2009-2010 Actual expenditures	2010–20119				Link to Government of Canada performance
		Main Estimates	Planned spending	Total authorities10	Actual expenditures
Community development	140,750	136,812	136,811	152,414	136,939	Strong economic growth
Regular programs	137,527	136,812	136,811	151,664	135,662
CEAP initiative: PEPS	3,223	–	–	750	1,277
Infrastructure	20,982	53,298	82,486	100,891	79,161	Strong economic growth
Regular programs	12,427	1,616	824	16,087	11,267
CEAP initiative: RInC	2,118	44,337	74,317	77,896	60,986
CEAP initiative: Shannon	6,437	7,345	7,345	6,908	6,908
Special intervention measures	99,482	105,171	110,171	107,807	108,511	Strong economic growth
CEAP initiative: CAF	99,482	105,171	110,171	107,807	108,511
Enterprise competitiveness	69,847	73,759	73,759	107,749	86,375	Strong economic growth
Regular programs	67,972	73,759	73,759	105,871	84,501
CEAP initiative: CBN	1,875	–	–	1,878	1,874
Competitive positioning of sectors and regions	37,529	33,540	33,541	39,847	39,413	Strong economic growth
Regular programs	37,529	33,540	33,541	39,847	39,413
Policies, programs and initiatives	5,611	5,271	5,271	5,000	5,712	Strong economic growth
Regular programs	5,611	5,271	5,271	5,000	5,712
Internal services11	23,854	21,312	21,311	23,621	23,895
Total	398,055	429,163	463,350	537,329	480,006

The 21% rise in expenditures between 2009-2010 and 2010-2011 is attributable to the increased spending associated with CEAP initiatives during the second year of implementation. Explanations concerning the expenditures made under CEAP initiatives are presented in the Canada’s Economic Action Plan subsection of section 1.7.

1.7 Expenditure profile

The Agency’s actual expenditures for 2010-2011 stood at $480 million, including operating expenditures.

The Agency’s actual expenditures in grants and contributions amounted to $424.1 million, including $227.7 million for regular programming and $196.4 million for CEAP.

The figure below shows the Agency’s spending trend over the past three years. The hatched part of the last two columns for 2009-2010 represents the CEAP portion of total authorities and actual expenditures. The hatched part of the four columns for 2010-2011 represents the CEAP portion included in the Agency’s Main Estimates, planned spending, total authorities and actual expenditures.

Departmental spending trend

Text Version

Explanation of variance

For 2009-2010, the variance between planned spending and total authorities is primarily attributable to the implementation of CEAP. For 2010-2011, total authorities also exceeded planned spending. This variance is largely attributable to the additional authorities granted, including funding for:

• implementation of the TISQFE;
• support for Quebec’s vulnerable communities, through the Community Diversification and Business and Regional Growth programs;
• continuation of the Community Futures Program (CFP);
• support for the competitiveness of SMEs and the growth of sectors and regions, through the Business and Regional Growth program;
• improvement of water quality and local transit, to generate regional economic spinoffs, through the ICP;
• support for construction activities associated with recreational infrastructure, through RInC.

In 2010-2011, the Agency spent close to 89% of the authorities obtained. The variance between actual expenditures and authorities stems from the difficult economic situation, leading to requests to carry forward funding, in particular for RInC and the TISQFE.

Canada’s Economic Action Plan

Over the past two years, the Agency obtained $347.8 million in funding to support CEAP. In 2010-2011, total CEAP-related actual expenditures stood at some $202.3 million,¹² totalling $314.9 million in expenditures since CEAP began. Initiatives implemented under CEAP terminated on schedule on March 31, 2011, except for RInC, which terminates on October 31, 2011.

From within the funding awarded to the Agency, $208 million was assigned by the Agency for the Community Adjustment Fund. This economic stimulus initiative was aimed at mitigating the impact of the economic downturn in the short term by contributing to the creation and maintenance of jobs, while meeting challenges with respect to transition and community adjustment. In 2010-2011, the Agency spent $108.5 million for the CAF, bringing total spending for the past two years to $207.5 million.¹³

RInC¹⁴ is a Canada-wide initiative aimed at contributing to mitigating the impact of the global recession by increasing the total value of construction activities associated with recreational infrastructure. Actual expenditures associated with this initiative in 2010-2011 were some $61 million, on top of the $2.1 million spent in 2009-2010. Some $16 million in spending is planned in 2011-2012 under the extension of RInC.

In 2010-2011, the Agency also spent $6.9 million for the Contribution program to supply the Municipality of Shannon with drinking water (in addition to the $6.4 million spent the previous year); $1.9 million (added to the same amount spent in 2009-2010) for Info entrepreneurs¹⁵ in Montreal and Ressources Entreprises¹⁶ in Quebec City, the two Canada Business Network (CBN) service centres for Quebec; and $1.3 million for Université Laval’s PEPS sports and physical education facility, Pavillon de l’éducation physique et des sports (added to the $3.2 million spent in 2009-2010).

1.8 Estimates by vote

Information on the Agency’s organizational votes and statutory expenditures is presented in the Public Accounts of Canada 2010 (Volume II). An electronic version of the Public Accounts may be found on the Public Works and Government Services Canada Web site under Public Accounts of Canada 2010.¹⁷

• Previous Page
• Table of Contents
• Next Page