ARCHIVED - Canadian Northern Economic Development Agency - Report

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Minister's Message

As Minister of the Canadian Northern Economic Development Agency (CanNor), I am pleased to present to Parliament and to Canadians the 2010-2011 Departmental Performance Report (DPR).  This is CanNor’s first DPR since the Agency was created in 2009.

CanNor is an important element of Canada’s Northern Strategy.  The work that the Agency is doing is helping to further develop a strong and diversified Northern economy which benefits those who live, work and support their families in the territories.  Economic prosperity in the North provides a foundation for the well being of Northerners, while benefiting all Canadians.

Fiscal year 2010-2011 was the Agency’s first full year of operation.  It was a year of establishing operational foundations, delivering on key commitments, and setting the stage for the Agency’s future efforts.  Regional offices were up and running in all three territorial capitals and the Agency’s headquarters office was established in Iqaluit.  In May, the Northern Projects Management Office (NPMO) opened its doors for business, with its main office situated in Yellowknife and regional representation in all three territories.

CanNor successfully delivered its core programs which include the Strategic Investments in Northern Economic Development program, as well as Aboriginal business and economic development programs.  In addition, under Canada’s Economic Action Plan, CanNor effectively delivered the Community Adjustment Fund and the Recreational Infrastructure Canada program in the three territories.  At the same time the NPMO has begun efforts to serve as a “one-stop shop” for major Northern projects, working to facilitate timely regulatory approvals and an understanding of how to do business in the North.

CanNor will build on the momentum of its first full year of operation by continuing to work with other federal departments, territorial governments, First Nations, Métis, Inuit and all northern stakeholders to leverage investments in the North.  CanNor, along with its partners, is committed to the common objective of advancing sustained economic development and success in Canada’s vast northern territories.

Section I: Organizational Overview

Raison d’être

Responsibilities

The 2008 Speech from the Throne committed to establishing Canada’s first stand-alone agency dedicated to northern economic development. In January 2009, CanNor was announced in the federal budget. The Agency was formally created eight months later in August 2009 when Prime Minister Stephen Harper announced the creation of CanNor and the establishment of its headquarters in Iqaluit. CanNor has since established offices in all northern capitals and a liaison office in Ottawa.

In May of 2010, CanNor marked an important milestone with the opening of the Northern Projects Management Office (NPMO). The NPMO program, which is aligned with the Government’s Action Plan on Regulatory Reform, supports economic development in the North by coordinating federal regulators and working to ensure the timeliness, transparency and predictability of federal regulatory processes on major northern projects. Further, the NPMO has an important role in helping federal departments and project proponents undertake Aboriginal consultation in the territories.

The Agency’s suite of programs includes the Strategic Investments in Northern Economic Development (SINED) program, Aboriginal economic development programs in collaboration with Aboriginal Affairs and Northern Development Canada (AANDC), infrastructure programming on behalf of Infrastructure Canada, and an economic development initiative for official language minority communities on behalf of Industry Canada. CanNor also works closely with Human Resources and Skills Development Canada (HRSDC) on interventions targeting workplace skills needed for the growing northern economy. CanNor is also the host department for the Northern Regional Federal Councils in the territories.

CanNor has a unique perspective on the North through its many partnerships and networks of contacts, its established presence in each territory, and broad perspective on the economic challenges and opportunities across the North. CanNor’s ability to bring together diverse interests to help set the course for northern economic development is rooted in its work with federal departments and agencies, territorial governments, community organizations, industry associations, Aboriginal groups and governments, and businesses operating in the North. It is through these relationships that the Agency delivers its programs. These relationships and networks also position the Agency to convene diverse interests on issues in the northern economy and promote collective action in response to economic opportunities and challenges in the North.

 

Strategic Outcome(s) and Program Activity Architecture (PAA)

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Strategic Outcome: Developed and diversified territorial economies that support prosperity for all Northerners.

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The Program Activity Architecture (PAA) provided below is designed to support the achievement of this outcome. It was developed as part of CanNor's work to complete the Agency's first Management, Resources and Results Structure. The PAA reflects the current programs and activities of CanNor, but may change over time to accommodate evolution in the Agency's roles, responsibilities, programs and activities.

Program Activity Architecture

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PAA Crosswalk

 

 

 

Organizational Priorities

Performance/Priority Status Legend

CanNor’s one strategic outcome is:  Developed and diversified territorial economies that support prosperity for all Northerners.  The program activities identified against the operational and management priorities in the following tables fall under this strategic outcome.

Priority	Type	Program Activity
Excellence in Program Delivery	New [Note 1]	Business Development and Community Development
Status: Somewhat Met
Funding under SINED doubled in 2010–2011 from 2009–2010 levels of $8,157,000, with an extra $10 million for each of the remaining years of the program. In the reporting year, 89% of SINED funds were spent. During 2010-2011, while CanNor provided funding for business development opportunities for women and for small businesses, as well as for youth entrepreneurship, the Agency has not yet fully explored these areas in terms of economic development opportunities. CanNor worked closely with Aboriginal governments and organizations to understand and respond to the economic development needs of these groups in accordance with the new Federal Framework for Aboriginal Economic Development. The Agency collaborated with AANDC to conduct formal engagement sessions, with regard to the renewal of Aboriginal economic development programming, in each territory.  CanNor also employs a business model, whereby officials in regional offices maintain a close working relationship with Aboriginal communities and other northern stakeholders.

Priority	Type	Program Activity
Building a strong agency	New	Policy, Advocacy and Co-ordination
Status: Somewhat Met
The Agency worked on developing its strategic policy function, which includes: some policy research and analysis in support of policy advice and new initiatives; a draft strategic policy framework; conducting economic research and analysis and monitoring economic issues on an ongoing basis; and developing the capacity to facilitate and enable the alignment of key federal government economic development activities in the North, with an eye to broader partnerships to maximize the impact of collective efforts.

Priority	Type	Program Activity
Building Relationships	New	Policy, Advocacy and Co-ordination
Status: Somewhat Met
CanNor implemented a short-term outreach strategy when the Agency was first established, and outreach continued during 2010-2011 through participation at industry tradeshows and conferences related to Northern economic development.  Work on an engagement strategy designed to build the Agency’s network of contacts and ensure ongoing stakeholder engagement was undertaken in 2010-2011 and will be finalized in 2011-2012. The Agency created an annual forum to bring together the senior leadership of the three Regional Federal Councils in the territories to discuss strategic issues and priorities common to the three territories and to foster collaborative working relationships. The Northern Projects Management Office (NPMO), with its main office in Yellowknife, has been established as a core program within CanNor. CanNor worked with various partners and stakeholders.  For example, CanNor worked with the Department of National Defence to assist them in planning their procurement and construction activities in Nunavut, in order to ensure alignment to the economic provisions of the Nunavut Land Claims Agreement.

Priority	Type	Program Activity
Establish the Northern Projects Management Office	New	Policy, Advocacy and Coordination
Status: Mostly Met
The NPMO took on a policy and coordination role by bringing a voice to northern major resource and infrastructure development projects to the Major Projects Deputy Ministers’ Committee, and together with federal partners and Natural Resources Canada’s Major Projects Management Office, is identifying short and long-term actions to improve the effectiveness of the regulatory system and building a coordinated approach to Aboriginal Crown consultations while holding the Crown record of consultations for projects it manages. In its coordination sub-activities, the NPMO has engaged industry, regulators and the northern boards, and began to track the progress of northern projects. It is anticipated that agreements for projects in Yukon, the Northwest Territories and Nunavut will be signed in 2011-2012.

Priority	Type	Program Activity
Excellent Internal Management	New	Internal Services
Status:  Mostly Met
CanNor worked to develop and implement an effective corporate services model. Memoranda of Understanding were put in place in an effort to optimize efficiencies and savings for shared services. The Agency engaged the Office of the Comptroller General to ensure proper controls and financial stability. Significant efforts were made to stabilize the organization’s internal services.

Priority	Type	Program Activity
Excellent Human Resources Management	New	Internal Services
Status: Somewhat Met
The Agency focused on building strong employee capacity and continuity and explored creative recruitment strategies. A long-term recruitment strategy that maximizes recruitment in and from the North is required.

Priority	Type	Program Activity
Performance Measurement	New	Internal Services
Status:  Met All
CanNor developed a Performance Measurement Framework which identifies expected results, performance indicators and an approach for the development of targets. Efforts are moving to data gathering to support ongoing assessment of the full range of the Agency’s activities.

 

Risk Analysis

In 2010–2011, CanNor developed a comprehensive corporate risk profile as part of its risk management system to strengthen decision making within the Agency and inform the focus of control mechanisms, such as the internal audit and program evaluation functions.

Establishing the Agency, while simultaneously implementing its mandate and effectively delivering on programs in place, has proven to be very challenging and involved some risks.

First, setting up the headquarters office in Iqaluit presented risks and challenges.  Because there was not enough office space to accommodate the organization, headquarters staff has been working out of a temporary space while a new office building is constructed. Construction in the North, and in Nunavut in particular, is affected by the availability of materials, shipping and delivery of goods, and the climatic conditions. Supplies purchased in southern Canada are shipped to Iqaluit by the sea lift which operates from July to October.  The costs associated with shipping are substantial; the construction season is short; and there is a shortage of skilled labour.  It is not unusual for construction to be delayed until supplies can arrive by sea lift and skilled labour is freed up from other projects in the territory.  While the Agency was not able to move into a new office space by the end of 2010-2011 as was targeted, it is anticipated that staff will be in the new building in 2011-2012.  Housing continues to be a challenge and CanNor officials are working closely with Public Works and Government Services Canada to address the housing accommodation issues.  CanNor has been mitigating this risk by only transferring functions to Iqaluit only when staff and accommodations are available.

A second challenge encountered as the Agency was being established was to ensure that program funding was spent effectively to create the greatest benefits for the people, communities and businesses in the North.  To address this risk and its scope, the Agency gathered information on program performance from a northern lens.  In 2011-2012 the Agency will build on this work to undertake a fuller examination of program terms and conditions to assess their impact and effectiveness from the perspective of CanNor’s northern economic development mandate.

A third challenge has been CanNor’s ability to attract and retain qualified staff. The Agency was created to advance economic development in the North and deliver economic programs and services in the three territories. Given that the mandate is completely focused on the North, it is essential to fill as many positions as possible with Northerners and comply with employment requirements included in land claims agreements. As the majority of positions are to be in the territorial capitals, it has been challenging to attract and retain qualified staff for two reasons. First, one of the biggest challenges facing current employers in the North is recruitment. Territorial governments and other federal departments are all competing for the same limited qualified labour force. The second reason is that it has proven difficult to attract people from other regions of the country to relocate to the territories when positions cannot be filled locally. To respond to these challenges, CanNor has developed innovative human resources strategies:

• work will continue to focus on skills development and training programs;
• a learning policy is being developed which will enable the CanNor to stimulate, guide and promote individual learning relevant to the Agency’s operational requirements and to Public Service career aspirations of employees;
• efforts have been made to maximize flexibility in order to foster a climate of mobility  within the organization;
• the Agency ensured that positions were classified in a manner that promoted maximum accessibility and flexibility and employment opportunities for targeted groups by exercising flexibility on qualification standards, and by instituting a significant outreach effort to Aboriginal and Northern communities; and
• CanNor champions a working group, in accordance with Article 23 of the Nunavut Land Claims Agreement, to increase the application, hiring, and retention rate of Inuit employees.

A fourth risk identified for the reporting period was meeting stakeholder expectations. Although existing programs were delivered effectively and in a timely manner, the Agency’s ability to modify and enhance those programs, to develop new program proposals and to potentially take on additional responsibilities, was limited by the need to build internal capacity and the availability of human and financial resources.

For example, expectations were high that the new Northern Projects Management Office (NPMO) would be able to improve the effectiveness of regulatory processes in the North immediately on its establishment. The NPMO has benefited from, and will continue to benefit from, the experience of and lessons learned from Natural Resources Canada’s Major Projects Management Office and the Canadian Environmental Assessment Agency, that  provide similar functions for major natural resources projects in the provinces. As well, the NPMO has been building on, and will continue to build on, the advice arising from ongoing regulatory improvement initiatives. In this context, CanNor has been managing expectations by: 1) ensuring ongoing open dialogue with industry, 2) maintaining strong collaboration between federal departments, agencies, territorial governments and the northern boards, and 3) providing clarification and articulating the differentiation of CanNor’s role from the role of Aboriginal Affairs and Northern Development Canada (AANDC).

While the above noted risks have posed some challenges, the Agency has been successfully operating in the North while maintaining a presence in Ottawa to promote northern economic issues within the federal family.

 

Summary of Performance

2010-11 Financial Resources ($ millions)

Planned Spending	Total Authorities	Actual Spending
61.2	69.2	64.3

2010-11 Human Resources (FTEs)

Planned	Actual	Difference
105	75	30

Strategic Outcome 1: Developed and diversified territorial economies that support prosperity for all Northerners

Performance Indicators	Targets	2010-11 Performance
The Performance Measurement Framework, including performance indicators, was under development during 2010-2011.	To be based on 2011-2012 baseline	CanNor developed a Performance Measurement Framework which identifies expected results, performance indicators and an approach for the development of targets.

Program Activity	2009-10 Actual Spending ($ millions)	2010-11 ($ millions) [Note 2]				Alignment to Government of Canada Outcome
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
Business Development	1.3	6.2	6.2	6.2	1.6	Strong Economic Growth
Community Development	33.1	47.8	47.5	55.1	46.5	Strong Economic Growth
Policy, Advocacy and Coordination	2.4	5.5	5.5	5.6	3.8	Strong Economic Growth
Total	36.8	59.5	59.2	66.9	51.9

Program Activity	2009-10 Actual Spending ($ millions)	2010-11 ($ millions)				Alignment to Government of Canada Outcome
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
Internal Services	2.8	1.8	1.8	2.3	12.4	N/A

The variances between Planned Spending and Actual Spending in the above Table and in the Tables in Section II are due to the fact that the initial distribution of operating funds across program activities did not accurately reflect the Agency’s actual expenditure plan.

 

Expenditure Profile

Canada's Economic Action Plan (CEAP)

As part of its overall expenditure profile, CanNor was responsible for the delivery of three federal funding initiatives in the territories under Canada’s Economic Action Plan:

• Strategic Investments in Northern Economic Development;
• Recreational Infrastructure Canada; and
• Community Adjustment Fund.

Strategic Investments in Northern Economic Development

Strategic Investments in Northern Economic Development (SINED), which was renewed for five years as part of Canada’s Economic Action Plan, is a suite of contribution programs for projects across the North. Investment decisions are guided by five-year territorial investment plans, which were developed through engagement with northern stakeholders and territorial governments and were approved by the Minister of Aboriginal Affairs and Northern Development Canada (AANDC).[Note 3] The suite of programs was renewed at $90 million over five years, split equally among the three territories, from 2009–2010 to 2013–2014.

To ensure ongoing program effectiveness and value for money, an evaluation focusing on progress to date in achieving concrete impacts under SINED will be undertaken, along with an assessment of the program’s future requirements. The evaluation will include an assessment of experience of other countries with territories bordering on the North in addressing the economic developmental challenges.  The evaluation of the SINED program is planned for 2013-2014.

Expected Result	Key Performance Indicators
Increase uptake of economic opportunities in existing, expanding and emerging sectors	Number of projects approved according to priorities in territorial investment plans Amount invested according to priorities in territorial investment plans

Recreational Infrastructure Canada

Announced as part of Canada’s Economic Action Plan, Recreational Infrastructure Canada (RInC) was a two-year national infrastructure funding program, ending on March 31, 2011, that supported the rehabilitation and repair of recreational infrastructure. The RInC program provided a total of $1.3 million in funding in the North in 2010-2011, equally distributed across the three territories.

Expected Result	Key Performance Indicators
Improved recreational infrastructure in northern communities	Amount leveraged on federal RInC investments Number of RInC projects funded Number of jobs created

Community Adjustment Fund

The Community Adjustment Fund (CAF) was a two-year program announced in Canada’s Economic Action Plan, ending on March 31, 2011. It was designed to provide economic stimulus to create employment opportunities and to address transitional and adjustment challenges in restructuring communities. The CAF program provided a total $18.1 million in funding, equally distributed across the three territories.

Expected Result	Key Performance Indicators
Improved economic conditions in communities	Number of projects approved Amount leveraged on federal CAF investments Number of jobs created

 

Departmental Spending Trend

[text version]

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.

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