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2 Analysis of Program Activities by Strategic Outcome

This section provides information on the Agency’s strategic outcome, challenges and program activities.

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

This strategic outcome reflects the object of the Act establishing the Economic Development Agency of Canada for the Regions of Quebec: to promote the development and diversification of the economy of the regions of Quebec.

Challenges associated with the strategic outcome

For communities

The economy of many Quebec communities located far from major urban centres is undiversified and based primarily on the harvesting of natural resources. Owing to their heavy dependency on a small number of industries or sectors, these communities are more sensitive to economic fluctuations. Thus, having experienced a recession, they were hard hit by the fragility of the economic recovery. For these communities, diversification of their economy has been the main challenge.

Over the past year, the Agency has thus continued to help Quebec communities in their effort to increase the dynamism of the economy, notably by supporting projects concerning diversification, entrepreneurial development, infrastructure, promotion of assets and mobilization of regional stakeholders.

For SMEs

Enterprises operate in a context of globalization. Competition from emerging nations generates downward pressure on prices and profit margins, and forces SMEs to turn toward higher value-added production.

In this context, Quebec’s SMEs are seeking to adapt, particularly with respect to productivity, market development and commercialization of new products.

Over the past year, the Agency thus continued to help Quebec SMEs in their growth and competitive positioning efforts, notably by supporting projects involving increasing production and innovation capability, market development, commercialization and structuring of sectors.

Program activities in line with the strategic outcome

In line with its strategic outcome, the Agency intervenes in six areas of activity:

• Community development
• Infrastructure
• Special intervention measures
• Enterprise competitiveness
• Competitive positioning of sectors and regions
• Policies, programs and initiatives

These program activities are implemented in the form of financial assistance and development support service accessible through the 14 business offices and an Infrastructure Directorate. In addition, to support the design and implementation of policies and programs, the Agency analyses the needs of Quebec regions and communities with respect to economic development, in conjunction with its federal and Government of Quebec partners.

Program activities contribute to the attainment of one of the outcomes targeted by the Government of Canada: Strong economic growth. Indeed, observations drawn from the formative evaluation of the Community Diversification and Business and Regional Growth programs show that the Agency’s two principal programs are aligned with government priorities, and are complementary to intervention from the different levels of government.¹⁸

In this Departmental Performance Report, each program activity has a descriptive section, a section presenting the performance summary and analysis of the program activity, and a section on lessons learned.

In the section presenting the performance summary, two types of performance information are available. First, information is presented on projects for which the Agency made an expenditure in 2010-2011, whose results presented are directly in line with expenditures made during that same year. There is also information on the final results targeted by projects funded and terminated prior to 2010-2011, for which it was possible to gather information on results obtained over a longer term. These results are associated with expenditures made prior to 2010-2011.

2.2 Program activity: Community development

Description of program activity

This program activity enables Quebec regions and communities to maintain and develop their economic activity base by building on their own assets.

Three objectives underpin this program activity. The first, Community mobilization, fosters communities’ development and increases their mobilization by drawing up visions and projects of local and regional scope. The second, Local development, assists communities through support for entrepreneurship and creation or maintenance of viable enterprises. The third, Attractive communities, increases communities’ ability to attract tourists and skilled individuals.

This program activity is primarily targeted at SMEs and NPOs. Two grants and contributions programs support this program activity: the Community Diversification program and the (Canada-wide) Community Futures Program.

2010-2011 Financial resources (in thousands of dollars)

Planned spending	Total authorities19	Actual expenditures
136,811	152,414	136,939

2010-2011 Human resources (FTEs)

Planned resources	Actual resources	Variance
100	100	0

Total authorities are 11% higher than planned spending. This variance is primarily attributable to the awarding of new funding for supporting vulnerable communities, through the Community Diversification program, and reinforcing communities’ ability to diversify their economic base, through the CFP and the TISQFE.

The 11% variance observed between total authorities and actual expenditures is primarily attributable to the reprofiling of funding for such initiatives as the Support Initiative for Development of International Cruises and the Linguistic Duality Economic Development Initiative, and the Montreal Planetarium project.

Program activity expected results	Performance indicators	Targets20	Performance status21
Communities have capabilities for socio-economic adjustment, and support for emergence of new entrepreneurs and development of local and regional enterprises.	Number of communities engaged in mobilization process	30	Exceeded expectations (55)
	Number of local and regional enterprises being developed, maintained or established	300	Exceeded expectations (420)
Regions attract tourists and investment, and this generates economic spinoffs within communities.	Number of tourism products and services being developed, expanded or upgraded	60	Exceeded expectations (118)
	Number of tourism products and destinations being commercialized	40	Exceeded expectations (72)
	Number of major community and tourism facilities being developed, expanded or modernized	12	Mostly met expectations (11)
	Number of new or improved growth-generating tourism projects	8	Exceeded expectations (12)

Performance summary and analysis of program activity

Over the past year, low interest rates and the different governments’ recovery plans contributed to the economic recovery. On the other hand, the strong Canadian dollar, difficulties in the U.S. real estate market and the fragile U.S. economy detracted from the recovery. Quebec’s communities were affected, each in their own way, by the fragility of the recovery, while their enterprises had to deal with low demand. Despite this context, the performance obtained by the Agency in 2010-2011 with respect to the Community development program activity surpassed most expectations. It also met one of the Agency’s priorities in 2010-2011, that of Supporting community development.

The total value²² of the 445 projects under this program activity in 2010-2011 stood at $1.3 billion. A total of $364.3 million came from the Agency on a multiyear basis. The leverage effect was therefore 2.46, almost identical to the figure in 2009-2010, meaning that for each $1 invested by the Agency, $2.46 was invested by the promoter and other funding sources.

Community mobilization

Performance observed from projects funded in 2010-2011

The Agency supported 55 Quebec communities in their mobilization efforts, more than double its target. The Agency’s support was aimed at developing their capabilities for consultation, planning and implementation of development and diversification initiatives.

Local and regional enterprises

Performance observed from projects funded in 2010-2011

In 2010-2011, the Agency supported the creation, maintenance or development of 420 enterprises of local or regional scope, surpassing performance expectations compared with the target established in the RPP 2010-2011. The Agency also supported projects which enabled 878 individuals to receive entrepreneurship services.

The joint contributions of the Government of Canada and the Quebec government under CEAP initiatives probably contributed indirectly to the maintenance of local and regional enterprises. Many projects had a ripple effect on the economies of communities through the procurement of products and services from local enterprises.

Tourism and community facilities

The tourism industry was characterized over the past few years by a marked decline in tourism, a Canada-wide phenomenon. The strong Canadian dollar probably had an impact on the number of tourists from outside the country.

Performance observed from projects funded in 2010-2011

In 2010-2011, the Agency supported 118 projects targeting the development, expansion or enhancement of tourism properties and services, double its target. The Agency also supported 72 projects for commercialization of tourism products and destinations, as well as 12 new or improved growth-generating tourism projects, including the Montreal Grand Prix. The number of tourists from outside Quebec at this three-day event was estimated at 128,000, along with economic spinoffs of between $70 million and $100 million.

The Agency also supported projects targeting the development, expansion or modernization of 11 major community and tourism facilities. This included projects for deployment of broadband networks and projects to develop rail and airport infrastructure.

Community Futures Program

Under the Community Futures Program (CFP), the Agency provided financial support to local and regional development agencies, specifically the 57 CFDCs located in designated rural regions, the 14 CEDCs in underprivileged urban areas and the 10 BDCs in peri-urban areas. In 2010-2011, the Agency spent $44 million to support these organizations.

As of March 31, 2011, CFDCs had achieved the following results through their current projects:

• a total of $255.6 million invested in startup enterprises
• 1,964 jobs created in the 612 enterprises created
• 14,677 jobs created and maintained in the 1,389 expanding enterprises
• 4,471 enterprises in acquisition, recovery, expansion or modernization received guidance services.

Temporary Initiative for the Strengthening of Quebec’s Forest Economies

Of the 445 projects supported which come under the Community development program activity, the Agency funded, through the TISQFE,²⁴ 29 projects from communities affected by the forestry crisis, for a total of $6.7 million in contribution expenditures. These primarily involve projects aimed at the creation and development of local and regional enterprises, but also projects for community mobilization and development of the tourism offering.

Economic development initiative

Through the EDI²⁵ dedicated to Quebec’s official language minority communities, the Agency over the last year also supported 16 diversification and entrepreneurship projects from English-speaking communities, for a total of $2 million in contribution expenditures.

Canada’s Economic Action Plan initiative

The Université Laval physical education and sports facility (Pavillon de l’éducation physique et des sports, or PEPS) is a CEAP initiative that comes under the Community development program activity. Over the past year, the Agency spent $1.3 million for this initiative. Detailed information on financial resources and on the performance of the PEPS is presented in section 2.9 (Summary of Canada’s Economic Action Plan initiatives).

Lessons learned

In the context of a fragile economy, concerted action with the different economic development agents is important. Within the framework of projects targeting community development, the Agency therefore optimized its collaboration with the Quebec government, other federal departments and its other partners in order to maximize all stakeholders’ efforts.

2.3 Program activity: Infrastructure

Description of program activity

This program activity helps upgrade urban and rural municipal infrastructure in Quebec and enhance citizens’ quality of life by investing in projects that improve the quality of the environment, sustain long-term economic growth, upgrade community facilities and establish 21st-Century infrastructure through the adoption of the best technology, new approaches and best practices.

In conjunction with the provinces, territories and municipalities, as well as First Nations and the private sector, the Government of Canada has implemented different joint infrastructure programs. The Agency has the special mandate to manage the Canada-Quebec Agreement concerning infrastructure programs. Projects that contribute to attaining the program objectives are those which improve water quality, find solutions to the problem of wastewater discharge, foster the safe movement of individuals and goods, improve public transit and help enhance citizens’ quality of life through the construction of infrastructure, facilities or buildings with urban or regional economic impact.

This program activity is primarily targeted at municipalities and NPOs and is based on the ICP (contribution program).

2010-2011 Financial resources (in thousands of dollars)²⁶

Planned spending	Total authorities27	Actual expenditures
82,486	100,891	79,161

2010-2011 Human resources (FTEs)

Planned resources	Actual resources	Variance
16	12	(4)

Total authorities were 22% higher than planned spending. This increase is attributable to a reprofiling of funding, unused in 2009-2010, for the ICP and the RInC program.

Actual expenditures for 2010-2011 were 22% lower than the authorities obtained. Actual expenditures depend on progress in the completion of infrastructure projects. Under agreements signed with the Government of Canada, the Quebec government is the implementing authority for most infrastructure programs.

Canada’s Economic Action Plan initiatives

Initiative: Recreational Infrastructure Canada

2010-2011 Financial resources (in thousands of dollars)

Planned spending	Total authorities28	Actual expenditures
74,317	77,896	60,986

2010-2011 Human resources (FTEs)

Planned resources	Actual resources	Variance
8	6	(2)

Total authorities were 5% higher than planned spending. This increase is attributable to the reprofiling of $3.6 million in funding from 2009-2010 to 2010-2011.

Actual expenditures for 2010-2011 were 22% lower than the authorities obtained. Actual expenditures depend on progress in the completion of projects. Under the agreement signed with the Government of Canada, the Quebec government is the implementing authority for RInC. Unused funding has therefore been carried forward to 2011-2012.

RInC expected results29	Performance indicators	Targets	Performance status30
Increase in economic opportunities	Demonstration of the link between projects and economic opportunities	The impact is seen through examples or case studies	Met all expectations
Partnership with Quebec and communities	Level of investment by other participants (province, municipalities, etc.) compared with federal contribution	For each $1 of federal contribution, at least $2 comes from other partners	Met all expectations (For $1 in federal contribution, $2.85 comes from other partners)
Increase in construction activities related to recreational infrastructure	Number of projects successfully completed	Some 180 projects	Met all expectations (209 projects approved)

Initiative: Contribution Program To Supply The Municipality Of Shannon With Drinking Water

2010-2011 Financial resources (in thousands of dollars)

Planned spending	Total authorities31	Actual expenditures
7,345	6,908	6,908

2010-2011 Human resources (FTEs)

Planned resources	Actual resources	Variance
–	–	–

Total authorities for 2010-2011 are 6% lower than planned spending, whereas actual expenditures correspond to total authorities. The variance is attributable to the fact that certain work scheduled for 2010-2011 was brought forward to 2009-2010.

Shannon expected result32	Performance indicator	Target	Performance status
Rural and urban communities have quality public infrastructure	Number of municipalities connected to quality drinking water systems	1	Met all expectations (1)

Performance summary and analysis of program activity

The Agency contributes, through the delivery of several federal programs, to the upgrading of infrastructure in Quebec, in line with Government of Canada priorities. For instance, RInC, announced in January 2009 and administered by the Agency, is a CEAP initiative intended to provide short-term economic stimulus. Initially scheduled to last two years, this program has helped increase construction activity for the refurbishment of many recreational infrastructure facilities in Quebec, as well as creating jobs. In December 2010, the Government of Canada made the decision to extend the program so as to enable certain projects, on the basis of defined criteria, to be continued. RInC will therefore now be terminating on October 31, 2011.

The performance obtained by the Agency in 2010-2011 with respect to the Infrastructure program activity met all expectations. It also met one of the Agency’s priorities in 2010-2011: Facilitate communities’ adjustment to economic shocks.

Performance observed from projects funded in 2010-2011

A total of 209 projects were approved under RInC. As of March 31, 2011, 128 projects were finished, with the others to be completed as of October 31, 2011. Total federal contributions for RInC projects stood at $75.7 million, for $291.5 million in total costs.³³

The Contribution program to supply the Municipality of Shannon with drinking water, an initiative implemented under CEAP, enabled the municipality of Shannon to obtain a $13.3-million non-repayable financial contribution for establishment of a water supply system fed by a groundwater source, construction of a reservoir and a pumping station, and maintenance of the network for the next 20 years. Of this amount, $6.4 million was spent in 2009-2010, and $6.9 million was earmarked for 2010-2011.

More specifically, Phase 1 of the program ($6.4 million for fitting up of wells and construction of the pumping station, reservoir and aqueduct) was finished on March 31, 2010. Phase 2 ($6.9 million for construction of the aqueduct along Highway 369 and maintenance of the network for the next 20 years) completed the project in 2010-2011. The program will thus enable 900 households, or close to 2,400 residents of the municipality of Shannon, to have access to a quality drinking water system.

The Agency is also one of the federal partners responsible for the delivery of certain infrastructure programs through service agreements with Infrastructure Canada. In this context, over the past year the Agency continued implementation of the Building Canada Fund (BCF) and the supplement to the BCF Communities component, which notably involved the introduction of projects for revitalization or construction of infrastructure for water supply, sewer systems and drinking water and wastewater treatment. The Agency also continued to manage the Municipal Rural Infrastructure Fund (MRIF) and the ICP, which is currently in its end phase. Highlights of performance with respect to the BCF and MRIF may be found in Infrastructure Canada’s DPR.³⁴

Lessons learned

With a view to optimizing delivery of its programs, the Agency over the past year adapted its management tools and practices for specific infrastructure programs. For instance, for certain programs, the Agency enhanced its practices for monitoring progress in infrastructure work by including in them tracking of progress of physical work. This revision of management practices was carried out with support from partner Government of Quebec departments, which acted as the link between the federal government and recipients.

2.4 Program activity: Special intervention measures

Description of program activity

This program activity assists communities and regions undergoing major economic shocks. In such situations, when additional dedicated funding is made available from the Government of Canada, the Agency temporarily puts in place special adjustment measures enabling communities to support their economic activity and initiate steps to help them find a new balance or economic stability.

Canada’s Economic Action Plan initiative

Initiative: Community Adjustment Fund (CAF)

2010-2011 Financial resources (in thousands of dollars)

Planned spending	Total authorities35	Actual expenditures
110,171	107,807	108,511

2010-2011 Human resources (FTEs)

Planned resources	Actual resources	Variance
35	35	0

The differences between planned spending, total authorities and actual expenditures for 2010-2011 involve operating costs, and represent minimal variance under normal management of operations.

CAF expected result36	Performance indicators37	Targets	Performance status38
Communities’ adjustment to economic shocks	Number of projects / initiatives generated	No target established	(231)
	Value of investment generated in enterprises or communities	No target established	($357.8 million)
	Number of communities which have increased or enhanced their opportunities	No target established	(155)

Performance summary and analysis of program activity

The financial crisis of fall 2008 and the ensuing economic crisis had an impact on the global economy. Along with all industrialized nations, Canada and Quebec were no strangers to the global economic downturn, experiencing their worst economic recession in 20 years. The 2009 federal budget gave the Agency more than $200 million in funding, over two years, for implementation of the Community Adjustment Fund (CAF).

In the context of tighter credit from banks, many SMEs have indeed turned toward government funds offered for supporting the economy, including the CAF. Under this initiative, $108.5 million was spent in 2010-2011, bringing total expenditures over the past two years to some $207.9 million.

The CAF was set up to help communities hard hit by the recession and struggling with substantial job losses. Its purpose was to mitigate the impact of the recession and the weak economic recovery by contributing to the creation and maintenance of employment, particularly in regions where job opportunities were more limited. In this regard, more than half of CAF funding was devoted, by means of Canada-Quebec Agreements, to communities affected by difficulties in the forestry sector. The CAF terminated on March 31, 2011.

The performance obtained by the Agency in 2010-2011 with respect to Special intervention measures program activity met one of the Agency’s priorities in 2010-2011: Facilitate communities’ adjustment to economic shocks.

Performance observed from projects funded in 2010-2011

The CAF was delivered by the Agency, directly to promoters, through existing programs, Community Diversification and Business and Regional Growth. A total of 231 projects were carried out, generating $357.8 million in investment in 155 communities. Aside from projects with NPOs, Agency financial support helped create, maintain or develop 190 enterprises, which increased or enhanced their development opportunities.

According to Department of Finance Canada estimates, CEAP, including related provincial and territorial measures, led to the creation or maintenance of more than 220,000 jobs across Canada.³⁹

Furthermore, seven Canada-Quebec Agreements – Job Creation Initiatives signed in 2009 have led to the creation and maintenance of jobs through silvicultural operations carried out in public and private forests and restoration of bridges and culverts on forest multi-use roads in the different regions of Quebec.

• Under the first six agreements, silviculture work was carried out, particularly for the rehabilitation of poorly regenerated areas, rehabilitation of hardwood forests and intensive silviculture operations. The projects implemented through these agreements were the subject of consultation among local stakeholders. The joint contribution of the Government of Canada and the Government of Quebec amounted to $200 million over two years. The Agency paid out $59 million in 2009-2010 and $48.1 million in 2010-2011.
  
  
• Under the seventh agreement, restoration work was performed on watercourse crossings on forest multi-use roads on Quebec public lands. Several Quebec regions have benefitted from this joint funding, for which the Agency’s contribution amounted to close to $12 million, of which $7.4 million was spent in 2010-2011.

Lessons learned

The Agency set up the CAF through the existing Community Diversification and Business and Regional Growth programs. This made it possible to facilitate the processing of funding applications and accelerate the process of awarding funding to communities and SMEs. The speed with which the Agency implemented this initiative proved crucial, since at the time of the economic downturn in 2009-2010, enterprises’ needs were pressing.

In fact, in a context of limited access to credit from banks, CAF criteria and terms and conditions (level of assistance, and eligible expenditures and clientele) were also developed so that the initiative could be more easily accessible for Quebec communities and SMEs, with a view to helping Quebec’s regions weather the economic downturn.

2.5 Program activity: Enterprise competitiveness

Description of program activity

This program activity helps enterprises perform better and be more competitive by enhancing productivity and increasing earned revenue; this contributes to creating conditions conducive to sustainable growth.

Two objectives underpin this program activity. The first, Development of enterprises’ capacity, fosters the improvement of capabilities with respect to management, innovation, adoption of advanced technology, market development, and integration with globalized production chains. In particular, it encourages support for organizations dedicated to improving the strategic capabilities of small and medium-sized enterprises (SMEs) in order to enhance their performance and contribute to their adjustment. The second objective, Strategic enterprises, supports the establishment and first phases of expansion of enterprises in economic activities deemed strategic for a region’s development so as to consolidate its economic base.

This program activity is targeted primarily at SMEs and NPOs, and is supported by the Business and Regional Growth grant and contribution program.

2010-2011 Financial resources (in thousands of dollars)

Planned spending	Total authorities40	Actual expenditures
73,759	107,749	86,375

2010-2011 Human resources (FTEs)

Planned resources	Actual resources	Variance
46	50	4

Total authorities are 46% higher than planned spending. This increase is primarily attributable to the awarding of new funding to support vulnerable communities, through the Business and Regional Growth program, and for implementation of the TISQFE.

The 20% variance between total authorities and actual expenditures is explained by the fact that contribution applications were submitted less quickly than anticipated. Part of the unused funding was carried forward to 2011-2012.

Program activity expected result	Performance indicators	Targets	Performance status
Enterprises assisted are high-performance and competitive	Number of enterprises involved in an approach to strategic management, market development or value chain management	1,550	Exceeded expectations (2,186)
	Number of innovative enterprises involved in an innovation management approach	200	Somewhat met expectations (157)
	Number of innovative enterprises in startup or pre-startup phase	125	Exceeded expectations (168)
	Number of large corporations targeted whose investment has a significant impact on jobs or surrounding enterprises	6	Exceeded expectations (13)

Performance summary and analysis of program activity

Over the past year, whereas the economic recovery was fragile, Agency intervention supported SMEs in their efforts toward growth and enhanced competitiveness by supporting, in particular, projects aimed at increased innovation capability, market development, integration with value chains and adoption of advanced technology.

Overall, the performance obtained by the Agency in 2010-2011 with respect to the Enterprise competitiveness program activity surpassed the expectations presented in the RPP 2010-11. It met one of the Agency’s priorities in 2010-2011: Support the economy of tomorrow by strengthening SMEs’ productivity and performance.

The total value of the 451 projects under this program activity in 2010-2011 amounted to $943.4 million, of which $194.9 million came from the Agency on a multiyear basis. The leverage effect was therefore 3.84, meaning that for each $1 invested by the Agency, $3.84 was invested by the promoter and other funding sources. The Agency’s leverage effect was thus higher than in 2009-2010, when it stood at 3.26.

Enterprises’ strategic capabilities

Performance observed from projects funded in 2010-2011

In 2010-2011, the Agency supported, directly or through intermediary groups, the development of strategic capabilities and the implementation of development projects in 2,186 enterprises, including 158 in strategic management, 1,141 in market development and 887 in value chain management. The Agency also supported 157 enterprises involved in an innovation management approach, representing 43 enterprises fewer than anticipated. This may be attributable in particular to the low rate of commercialization of innovation in Quebec compared with other provinces, and to the difficult economic context, which did not encourage SMEs to invest in innovation projects.

Strategic enterprises

Performance observed from projects funded in 2010-2011

Despite the economic context of the past few years, the Agency supported 168 innovative enterprises in startup or pre-startup phase, as well as 13 major corporations whose investment should have a major impact on jobs or surrounding enterprises, in particular among local subcontractors.

Temporary Initiative for the Strengthening of Quebec’s Forest Economies

Of the 451 projects approved in 2010-2011 under the Enterprise competitiveness program activity, the Agency supported, through the TISQFE, 40 projects from communities affected by the forestry crisis totalling $11.3 million in contribution expenditures. Most of these projects targeted development of enterprises’ capabilities with respect to value chain management and innovation management.

Canada’s Economic Action Plan initiative

The Canada Business Network (CBN), supported under CEAP, comes under the Enterprise competitiveness program activity. Over the past year, the Agency spent $1.9 million for this initiative. More detailed information on CBN financial resources and performance is presented in section 2.9 (Summary of Canada’s Economic Action Plan initiatives).

Lessons learned

In a period marked by a strong Canadian dollar and economic difficulties in the U.S., where a large share of Quebec enterprises’ exports are shipped, support for those enterprises’ development and market diversification is essential. Over the past year, the Agency thus helped a large number of enterprises develop their markets. Over the coming year, it will continue its support for projects likely to reinforce enterprises’ ability to complete their globalization approaches successfully. The Agency will help them identify and develop new markets, commercialize their products and services more effectively on the international stage and develop business relations and profitable partnerships to contribute to enhancing their global competitiveness.

2.6 Program activity: Competitive positioning of sectors and regions

Description of program activity

This program activity improves the international competitiveness of regions by enhancing their competitive advantages on the world stage. It has two objectives. The first, Growth poles, develops and consolidates growth poles by fostering innovation and networking among knowledge players (universities and research institutes and centres, enterprises and groups of enterprises, and technology brokers), development of a critical mass of knowledge, and enhancement and transfer of technology.

The second objective, International promotion of regions, enhances the international competitiveness of Quebec regions through integrated promotion of locational factors (labour force, market access, infrastructure, costs, etc.), attraction of direct foreign investment and reinvestment by foreign enterprises already established in Quebec.

This program activity mainly targets small and medium-sized enterprises (SMEs) and non-profit organizations (NPOs) and is supported by the Business and Regional Growth grant and contribution program.

2010-2011 Financial resources (in thousands of dollars)

Planned spending	Total authorities42	Actual expenditures
33,541	39,847	39,413

2010-2011 Human resources (FTEs)

Planned resources	Actual resources	Variance
30	29	(1)

Total authorities are 19% higher than planned spending. This increase is primarily attributable to the awarding of new funds for supporting vulnerable communities, through the Business and Regional Growth program, and for implementation of the TISQFE. Actual expenditures correspond to total authorities.

Program activity expected result	Performance indicators	Targets	Performance status
Sectors and regions enhance their competitive positioning.	Number of clusters and networks in development	8	Exceeded expectations (21)
	Number of applied research projects and technology transfers completed	80	Exceeded expectations (263)

Performance summary and analysis of program activity

In supporting the development of competitiveness poles and the promotion of Quebec communities, the Agency has contributed to enhancing communities’ international competitiveness and integrating them into the knowledge economy.

Overall, the performance obtained by the Agency in 2010-2011 with respect to the Competitive positioning of sectors and regions program activity surpassed the targets established in the corresponding RPP.

The total value of the 82 projects under this program activity in 2010-2011 amounted to $348.2 million, of which $126.4 million came from the Agency on a multiyear basis. The leverage effect was therefore 1.75, meaning that for each $1 invested by the Agency, $1.75 was invested by the promoter and other funding sources. The Agency’s leverage effect was therefore lower than in 2009-2010, when it stood at 2.01.

Growth poles

Performance observed from projects funded in 2010-2011

In 2010-2011, the Agency made $2.3 million in contribution expenditures in support of 21 business networks and sectoral clusters in development in its priority areas. This support was aimed at the carrying-out of plans and studies with a view to developing their capabilities, as well as the implementation of development projects with enterprises.

The Agency also supported, in 2010-2011, 263 applied research and technology transfer projects.⁴³ In 2010-2011, a special effort was made by the Agency to help college technology transfer centres offer services to enterprises aimed at enhancing their innovation capabilities. The Agency spent more than $5 million, primarily for the purchase of specialized equipment, to support a dozen centres located in the Bas-Saint-Laurent, Mauricie and Saguenay– Lac-Saint-Jean regions. Once the projects are completed, 400 SMEs could benefit from the services provided by these centres.

International promotion of regions

Performance observed from projects funded in 2010-2011

Over the past year, three international promotion organizations enhancing the locational factors of Quebec regions received Agency support. For instance, in 2010, Montreal International conducted a study on Montreal’s main attractions.⁴⁵

Temporary Initiative for the Strengthening of Quebec’s Forest Economies

Of the 82 projects supported in 2010-2011 which come under the Competitive positioning of sectors and regions program activity, the Agency supported, through the TISQFE, 10 projects targeted primarily at the execution of technology transfers for which contribution expenditures amounted to $4.1 million.

Lessons learned

The intensification of links between research institutions and organizations and SMEs contributes to enhancing the innovation capability of enterprises benefiting from technology transfers. In 2010-2011, the Agency began to intensify its support for technology transfer projects, in particular by supporting several college technology transfer centres. These efforts, which will continue during the next year, were initiated in order to meet one of the priorities established by the Agency for 2011-2012: Help SMEs become more competitive.

2.7 Program activity: Policies, programs and initiatives

Description of program activity

This program activity enables Quebec’s regions and communities to benefit from adapted, consistent and effective federal action that produces socio-economic spinoffs, notably by generating and disseminating economic development knowledge that is helpful to development agents and by seizing business and development opportunities. Four objectives underpin this program activity: analysis and research; policies and programs; representation and influence; and co-operation and collaboration.

2010-2011 Financial resources (in thousands of dollars)

Planned spending	Total authorities47	Actual expenditures
5,271	5,000	5,712

2010-2011 Human resources (FTEs)

Planned resources	Actual resources	Variance
44	51	7

The difference between planned spending, total authorities and actual expenditures represents minimal variance under normal management of operations.

Program activity expected result	Performance indicator	Target	Performance status
Quebec communities and regions benefit from adapted, consistent and effective federal action (Policies, programs and initiatives) that generates socio-economic spinoffs, and Quebec communities and regions can grasp development opportunities. The innovation commercialization process generates economic and social spinoffs in the medium and long term.	Extent to which policy analysis and policy research projects are helpful	Production and dissemination of knowledge on regional development issues, problems and best practices	Met all expectations

Performance summary and analysis of program activity

The performance obtained by the Agency in 2010-2011 with respect to the Policies, programs and initiatives program activity met expectations. In addition to generating and disseminating knowledge on regional development issues, problems and best practices, the Agency also took steps with regard to each of the objectives associated with the program activity, with a view to increasing communities’ vitality and reinforcing the competitiveness and performance of Quebec enterprises and regions.

Analysis and research

The Agency helped development agents acquire the facts and data to inform their deliberations and facilitate decision-making with respect to development trends, challenges and issues. The main activities in this regard included:

• Implementation of the Regional Development Study program, whose objective is to generate and disseminate regional economic development knowledge that is helpful for development agents. Following the call for tenders issued in 2009, the Agency approved five projects, four of which had expenditures in 2010-2011.
• Agency participation in three research co-operation agreements leading to:
  • 14 studies and eight presentations with the International Trade and Investment Centre of the Conference Board of Canada;⁴⁸
  • Eight studies with the Centre Métropolis du Québec;⁴⁹ and
  • 50 or so bulletins from the Smart Practices Innovation Network.⁵⁰
• Holding of two round tables on the green economy and enhancement of natural resources, and on innovation and commercialization, organized by the Agency.⁵¹

Policies and programs

The Agency continued its efforts with respect to policies and programs, enabling it to cater to the needs of Quebec communities and regions through the development of adapted, coherent policies, programs, initiatives and guidelines. The main achievements of the past year in this regard were:

• Obtaining funds and implementing the TISQFE in order to strengthen and increase economic activity in areas affected by the forestry crisis by emphasizing job creation and maintenance, and increased performance by SMEs.
• Drafting of a strategic framework for program renewal, scheduled for 2012, in order to ensure that programs are in line with government priorities, the realities and challenges of Quebec regions and SMEs, and recognized new approaches in regional development.

Representation, influence and collaboration

In 2010-2011, the Agency continued its efforts with respect to representation, influence and collaboration. These efforts enabled Quebec regions and communities to take advantage of actions that influence government decisions with respect to economic development, so that they are better adapted to the specific realities of the regions. These efforts will also foster concerted action with federal partners and others as issues, needs or opportunities arise. More specifically, the efforts deployed by the Agency over the past year translated into:

• The conduct of seven trade missions, industry days or awareness days in which more than 200 enterprises participated within the framework of implementation of the Industrial and Regional Benefits Policy and the F-35 Joint Strike Fighter Program. For instance, the Agency organized a trade mission to France and Italy, in conjunction with the Department of Foreign Affairs and International Trade Canada and Natural Resources Canada. The purpose of this mission was to develop the French and Italian markets for wood products from Quebec enterprises.
• The Agency’s participation in the work of the Territorial Development Policy Committee of the Organisation for Economic Co-operation and Development (OECD), which is the main international forum for discussion and exchange of experience in the field of regional policy.
• The Agency’s participation in communities of practice of Quebec official language minority communities in order to strength communication links between Agency business offices and English-language community organizations. These activities come among other things under the Economic Development Initiative, which stems from the Roadmap for Canada’s Linguistic Duality 2008-2013.
• Collaboration with representatives of national innovation and sustainable development funds and with energy policy development organizations, to target opportunities for optimizing Quebec’s participation in the migration toward a green energy economy. The Agency also takes part in the interdepartmental working group on Canada’s Wind Technology Road Map, which works on defining and drafting policy directions on wind energy and clean energy for the Government of Canada.
• Increased collaboration with the Quebec government within the context of implementation of the Community Adjustment Fund (CAF), the Recreational Infrastructure Canada (RInC) program and the Initiative to Support International Cruise Development on the St. Lawrence and Saguenay Rivers.⁵² The Agency also collaborated with the Quebec government in order to promote Quebec sectors and enterprises within the context of major federal government projects, in order to maximize industrial spinoffs in Quebec.

Lessons learned

Over the past year, the Agency continued to exercise leadership in relation to other federal departments and agencies with respect to policies and representation for the advancement of initiatives and strategic projects in Quebec requiring their support and national decisions.

Through its liaison, representation and collaboration activities, the Agency contributes to attaining the government’s priorities as well as increasing communities’ vitality and reinforcing the competitiveness and performance of Quebec enterprises and regions. The Agency has intensified its liaison and collaboration efforts with the Quebec government, and with other institutions active in economic development.

2.8 Program activity: Internal services

Description of program activity

Internal services are groups of related activities and resources that are administered to meet the needs of an organization’s programs and other general obligations. They include: management and monitoring services; communications services; legal services; human resources management services; financial management services; information management services; information technology services; real property management services; materiel management services; acquisitions management services; travel management services; and other administrative services. Internal services include only those activities and resources directed at the organization as a whole, and not those provided solely to a specific program.

2010-2011 Financial resources (in thousands of dollars)

Planned spending	Total authorities53	Actual expenditures
21,311	23,621	23,895

2010-2011 Human resources (FTEs)

Planned resources	Actual resources	Variance
146	165	19

Total authorities are 11% higher than planned spending. This increase is largely attributable to the awarding of new funding for vulnerable communities and the TISQFE and the reprofiling of funds obtained in 2009-2010.

The difference between total authorities and actual expenditures is insignificant. This represents minimal financial variance under normal management of operations.

The $2.6-million difference between actual expenditures and planned spending primarily comprises salaries. Consequently, this amount funds the variance of 19 FTEs presented.

Management and monitoring services include the Agency’s internal audit and evaluation services. The Agency’s Departmental Audit Committee held several meetings in 2010-2011, allowing for discussions on a range of issues in the areas of risk management, internal control and governance. Committee members gained a high level of assurance that, overall, the appropriate mechanisms were in place on those fronts, in particular through the work performed on internal audit and reporting activities.

In 2010-2011, the Departmental Audit Committee reviewed several reports and mechanisms in place within the Agency. Thus, it advised the deputy head and other Agency stakeholders involved, particularly with respect to the following: the Agency’s 2011-2012 risk profile, the Three-year Risk-based Internal Audit Plan, internal audit reports dealing with the efficiency and effectiveness of controls in place for delivering CEAP initiatives and those dealing with the management mechanisms associated with delivery of infrastructure programs, the Agency’s financial statements, reports to Parliament (RPP, DPR), governance structure and integrated annual planning.

In 2010-2011, the members of the Departmental Evaluation Committee discussed evaluation-related issues, approved different evaluation frameworks and reports, and conducted follow-up on recommendations from prior evaluations. The work being carried out on evaluations of the Community Diversification and Business and Regional Growth programs was presented to the Committee on three occasions. Each of the issues defined in the Evaluation Policy, namely, timeliness, effectiveness, efficiency and savings, was the subject of a presentation. The observations drawn from these evaluations will be used to support the renewal of the Agency’s programs.

2.9 Summary of Canada’s Economic Action Plan initiatives

In 2009, in addition to its regular programming, the Agency implemented ad-hoc initiatives of two years’ duration, in support of the communities and sectors hardest hit by the economic downturn.

Initiative: Community Adjustment Fund (CAF)

Since 2009, the CAF has helped mitigate 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 communities’ transition and adjustment. Details concerning CAF performance and expenditures are presented in section 2.4 (Special intervention measures).

Initiative: Recreational Infrastructure Canada (RInC) program

The RInC program is a Canada-wide initiative aimed at contributing to mitigating the impact of the recent global recession by increasing the total value of construction activities associated with recreational infrastructure. While initially introduced as a two-year program, RInC has been extended by the Government of Canada until October 31, 2011. The goal of projects funded by this program is primarily to modernize, repair, replace or expand existing recreational infrastructure, such as swimming pools, arenas and sports fields. Details concerning RInC performance and expenditures are presented in section 2.3 (Infrastructure).

Initiative: Contribution program to supply the Municipality of Shannon with drinking water

The Contribution program to supply the Municipality of Shannon with drinking water led to the establishment of a drinking water system supplied from a groundwater source and construction of a reservoir and pumping station. Details concerning program performance and expenditures are presented in section 2.3 (Infrastructure).

Initiative: Canada Business Network (CBN)

2010-2011 Financial resources (in thousands of dollars)

Planned spending	Total authorities54	Actual expenditures
–	1,878	1,874

As the RPP 2010-11 went to press, the amount of planned spending for the CBN had not been determined.

Under CEAP, the Agency had planned $3.8 million in funding over two years for the two Canada Business Network service centres in Quebec: Info entrepreneurs in Montreal, and Ressources Entreprises in Quebec City. The Agency thus spent $1.9 million 2009-2010 and $1.9 million in 2010-2011 for the CBN. These service centres provide business information and referral services to guide entrepreneurs toward specialized resources. Over the past two years, Business Canada service centres have answered 56,143 information requests, 30,332 of them in 2010-2011.

Initiative: Pavillon de l’éducation physique et des sports (PEPS) of Université Laval

2010-2011 Financial resources (in thousands of dollars)

Planned spending	Total authorities55	Actual expenditures
–	750	1 277

As the RPP 2010-2011 went to press, the amount of planned spending for the PEPS had not been determined. The difference between total authorities and actual expenditures is attributable to the reprofiling to 2010-2011 of spending planned for 2009-2010.

The Agency has spent $4.5 million for Université Laval’s PEPS, including $3.2 million in 2009-2010 and $1.3 million in 2010-2011. This funding has helped increase hosting capacity at major events and made it possible to provide broader sports programming.

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