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Minister’s Message

For more than two decades, the Atlantic Canada Opportunities Agency has been working with its partners to build a more modern, productive and competitive economy in Atlantic Canada.  Atlantic Canadians today are more entrepreneurial and more innovative, and continue to export increasing quantities of goods and services.

This 2008-2009 Report on Plans and Priorities describes ACOA’s continuing leadership in shaping the region’s economic future, and outlines the Agency’s priorities and goals for the next fiscal year.  While its programs and activities have evolved over time, today’s ACOA remains true to its original mandate of encouraging economic development by helping to create business and employment opportunities in communities, large and small, throughout Atlantic Canada.

Readers may notice that this document differs somewhat in style and content from reports issued in previous years.  Along with several other federal departments and agencies, ACOA is participating in a pilot directed at developing reports to Parliament that are more concise and user-friendly.  As a federal agency, ACOA remains committed to enhancing both the accountability and the quality of its reporting to parliamentarians and to Canadians. 

In the year ahead, the Agency will continue to focus on three main areas of activity: enterprise development; community development; and policy, advocacy and co-ordination.  This will be done with a special emphasis on initiatives that foster greater productivity and the commercialization of innovative technologies, in order to enhance the competitiveness of the Atlantic economy.  This focus is consistent with the goals of the Government’s Advantage Canada strategy.

Improving conditions for Atlantic Canadian industries and businesses means improving their global competitiveness and raising productivity levels.  To that end, ACOA will continue to help drive increased innovation, commercialization and skills development through such programs as the Business Development Program and the Atlantic Innovation Fund.

The Agency intends to maintain its essential role in the co-ordination and development of the Atlantic Gateway, with the objective of enhancing international trade with emerging markets and helping to modernize our transportation infrastructure, thereby generating economic opportunities in Atlantic Canada.

ACOA will also lead trade development initiatives that increase the exposure of Atlantic Canadian firms in markets in the United States, Europe, Asia and the Americas, and will continue its work to raise the level of foreign direct investment in Atlantic Canada. 

The Agency works with Atlantic Canadian communities to put in place the plans and strategic infrastructure they need to strengthen local economies and identify opportunities for sustained growth.

As it has done since its inception, ACOA will work with provincial governments, regional stakeholders and other partners to build a stronger economy by creating the conditions businesses and communities need to thrive and prosper.  The Agency will remain an active advocate for the region’s interests in Ottawa, thereby ensuring that federal programs respond to the needs of Atlantic Canada.

I am proud to lead a federal agency dedicated to the future of Atlantic Canada.  I am confident that ACOA will continue to play an integral role as an effective partner in building a strong and dynamic economy in Atlantic Canada.

__________________________________

The Honourable Peter G. MacKay
Minister of National Defence and Minister of the Atlantic Canada Opportunities Agency

 

Management Representation Statement

I submit for tabling in Parliament the 2008-2009 Report on Plans and Priorities for the Atlantic Canada Opportunities Agency (ACOA).

This document has been prepared based on the reporting principles contained in the Guide to the Preparation of Part III of the 2008-2009 Estimates: Reports on Plans and Priorities and Departmental Performance Reports.

• It adheres to the specific reporting requirements outlined in guidelines prepared by the Treasury Board of Canada Secretariat.
• It is based on the Agency’s Strategic Outcomes and Program Activities that were approved by the Treasury Board of Canada.
• It presents consistent, comprehensive, balanced and reliable information.
• It provides a basis of accountability for the results achieved with the resources and authorities entrusted to the Agency.
• It reports finances based on planned spending approved by the Treasury Board of Canada.

_____________________________

Monique Collette, President
Atlantic Canada Opportunities Agency

 

Section I – Agency Overview

1.1 Summary Information

Raison d’être

The Atlantic Canada Opportunities Agency (ACOA) works in partnership with Atlantic Canadians to improve the economy of communities in the region and enhance the region’s competitiveness.  Working with partners in government, the private sector, academia and non-governmental organizations, ACOA seeks to advance economic opportunities and innovation in order to serve the needs of businesses, organizations, individuals and communities.  This work addresses the Agency’s mandate “… to increase opportunity for economic development in Atlantic Canada and, more particularly, to enhance the growth of earned incomes and employment opportunities in that region. (Part I of the Government Organization Act, Atlantic Canada 1987, R.S., c G-5-7, also known as the Atlantic Canada Opportunities Agency Act)

Financial and Human Resources

	2008-2009	2009-2010	2010-2011
Financial Resources ($ millions)	328.2	321.9	288.9
Human Resources (FTEs)	757	726	711

Agency Priorities for 2008-2009

1.        Productivity Foster improved productivity in Atlantic Canadian companies through measures such as research and development, acquiring advanced technologies and investing in business skills development.  To this end, the Agency will use existing programming to increase focus in these areas, particularly in sectors that are strategically important to the long-term success of the Atlantic region.

2.        Innovation and Commercialization Foster improved commercialization of innovative technologies, to increase productivity and competitiveness.  The Agency will increase focus in this area to identify and pursue commercialization opportunities within the Atlantic Innovation Fund (AIF) portfolio.

3.        Balanced Approach in Rural/Urban Development In response to changing economic circumstances, ACOA will continue to pursue strategies that support increasingopportunities in the region’s rural and urban areas, by investing in initiatives that will provide best value for investment while addressing community priorities.

4.        Targeted Advocacy Areas ACOA will continue to advocate the interests of Atlantic Canada in orderto ensure new government initiatives are responsive to the needs of Atlantic Canada through Advocacy Champion files.

5.        Trade and Atlantic Gateway Building on past successes in trade, ACOA will reposition its efforts, aligning them with the Government of Canada’s Global Commerce Strategy and the related Americas Strategy, and will engage in activities that capitalize to a greater extent on emerging markets such as Asian countries, e.g. China and India.  Continued co-ordination efforts to ensure that Atlantic Canada is well poised to benefit from the Atlantic Gateway, which offers significant opportunities for long-term economic expansion in the Atlantic region.

6.        Management Priorities ACOA’s management priorities will focus on the Government of Canada’s governance and accountability agenda, Public Service Renewal, Risk Management, Values and Ethics, and strategic planning that integrates human resources management with business goals and aligns talent with priorities.

1.2 ACOA’s Mandate and Responsibilities

The Agency

Established in 1987, ACOA is the federal government department responsible for helping to build economic capacity in the Atlantic Provinces by working with the people of the region – in their communities, through their institutions and with their local and provincial governments and businesses – to create jobs and enhance earned incomes. 

ACOA’s head office in Moncton, New Brunswick, is home to branches responsible for Policy and Programs, Finance and Corporate Services, Human Resources, Communications, and Legal Services.  The Agency has 36 regional and field offices in cities and towns across the four Atlantic Provinces.  These are led by regional vice-presidents located in each provincial capital, who are responsible for the delivery of ACOA programs.  Through its Ottawa office, ACOA ensures that Atlantic Canada’s interests are reflected in both the policies and programs developed by other departments and agencies of the federal government.

Although the Agency’s policies and program tools have changed since its inception, the overall goal of ACOA has always been to help the Atlantic region realize its full potential in terms of productivity, competitiveness, economic growth and standard of living.  Modifications have been made to its financial support programs for SMEs but, essentially, its vision for Atlantic Canada (i.e. increased self-sufficiency and increased earned incomes) is still at the heart of the Agency’s operations.

ACOA capitalizes on regional strengths by using a balanced approach to tackle economic development challenges facing Atlantic Canada.  This is achieved by identifying and addressing structural weaknesses in the economy, helping communities and businesses overcome barriers, and finding new opportunities for growth.  It is also within this context that ACOA is committed to helping the region make the transition to a more innovative, productive and competitive economy.

In order to effectively pursue its mandate, the Agency aims to achieve the following strategic outcomes.

1. Competitive and sustainable Atlantic enterprises, with emphasis on those of small and medium size.
2. Dynamic and sustainable communities for Atlantic Canada.
3. Policies and programs that strengthen the Atlantic economy.

The chart bellow illustrates ACOA’s complete framework of program activities and program sub-activities, which contribute toward the Agency’s three Strategic Outcomes.

The Agency takes a proactive approach to identifying opportunities, recognizing that an economy must have a number of conditions in place in order to succeed.  Apart from a solid record of program delivery to businesses and communities in Atlantic Canada since 1987, one of ACOA’s greatest accomplishments has been to refine its supports and services to clients in response to evolving global and national circumstances. 

At the national level, the Agency carries out its mandate by advocating for Atlantic Canada’s interests, priorities and concerns in federal government policy‑making decisions and investments that have a direct impact on the region’s economy.

At the regional level, ACOA conducts policy research and analysis that helps provide the intellectual foundation for a comprehensive and strategic approach to regional development.  Furthermore, the Agency plays a key role in co‑ordinating pan-Atlantic development strategies, programs and initiatives, to reduce duplication and maximize impact.  The Agency also participates in a number of federal government horizontal initiatives, acting as the lead department for the Atlantic Canada Tourism Partnership, Team Canada Atlantic, and the International Business Development Program.

Locally, the Agency works with its partners to provide communities with the tools and resources they need to build stable local economies.  Partnerships are an important mechanism in the development and delivery of policies and programs.  ACOA partners with the private sector, universities, non‑government organizations, as well as governments at all levels.

ACOA also works locally to improve the growth and competitiveness of enterprises.  The Agency ensures that a wide variety of business development tools and resources are available to Atlantic Canadian entrepreneurs throughout all stages of the business life cycle – from the time they are thinking about setting up a new business, to the time they are planning for growth and expansion.^[1]

Recognizing the correlation between innovation and productivity, the Agency places emphasis on fostering research and development, technology adoption, skills development and improved access to capital, which are all required to make these kinds of investments in innovation possible.  The Atlantic Innovation Fund (AIF) continues to be a driving force behind the latest acceleration of research and development in Atlantic Canada.[2]

ACOA also recognizes the correlation between stimulating the growth of entrepreneurship and economic development, as illustrated by the fact that in the 1990s, 70% of the jobs created by new firms in Atlantic Canada were attributed to small businesses.[3]  The Business Development Program and other ACOA programs are helping entrepreneurs to start up and expand businesses, optimize trade and export opportunities, develop new products, and improve business management practices to grow and compete in the global economy.

1.3 Linkages between Strategic Outcomes, Priorities, Program Activities and Government of Canada Outcomes

Strategic Outcome 1: Competitive and sustainable Atlantic enterprises, with emphasis on those of small and medium size.
Strategic Outcome Performance Measures
Performance Indicators Increase in Atlantic GDP related to ACOA clients				Targets Five-year Target: (2004-2005 to 2008-2009) $4 to $5 in GDP gains for every $1 of ACOA expenditure
2008-2009 Priorities Foster improved productivity in Atlantic Canadian companies through measures such as research and development, acquiring advanced technologies and investing in business skills development.  To this end, the Agency will use existing programming to increase focus in these areas, particularly in sectors that are strategically important to the long-term success of the Atlantic region. Foster improved commercialization of innovative technologies, to increase productivity and competitiveness.  The Agency will increase focus in this area to identify and pursue commercialization opportunities within the Atlantic Innovation Fund (AIF) portfolio.    In response to changing economic circumstances, ACOA will continue to pursue strategies that support increasing opportunities in the region’s rural and urban areas, by investing in initiatives that will provide best value for investment while addressing community priorities. Building on past successes in trade, ACOA will reposition its efforts, aligning them with the Government of Canada’s Global Commerce Strategy and the related Americas Strategy, and will engage in activities that capitalize to a greater extent on emerging markets such as Asian countries, e.g. China and India.  Continued co-ordination efforts to ensure that Atlantic Canada is well poised to benefit from the Atlantic Gateway, which offers significant opportunities for long-term economic expansion in the Atlantic region.
Program Activity	Expected Results	Forecast Spending	Planned Spending				Alignment with Government of Canada Outcomes
		2007-2008	2008-2009		2009-2010	20010-2011
Fostering the development of institutions and enterprises, with emphasis on those of small and medium size	Improved growth and competitiveness of Atlantic SMEs	205.8	214.2		206.2	183.3	Strong Economic Growth

Strategic Outcome 2: Dynamic and sustainable communities for Atlantic Canada
Strategic Outcome Performance Measures
Performance Indicator Increased capacity in community decision making, planning and delivery. Survival rate of rural businesses.				Target Five-year Target: (2004-2005 to 2008-2009) Evidence of impact resulting from evaluations. Stabilize or increase survival rate of rural businesses.
2008-2009 Priorities In response to changing economic circumstances, ACOA will continue to pursue strategies that support increasing opportunities in the region’s rural and urban areas, by investing in initiatives that will provide best value for investment while addressing community priorities.
Program Activity	Expected Results	Forecast Spending	Planned Spending				Alignment with Government of Canada Outcomes
		2007-2008	2008-2009		2009-2010	20010-2011
Fostering the economic development of Atlantic communities	Enhanced business and economic opportunities for Atlantic Canada communities; Enhanced community collaborations	100.8	100.9		92.6	93.4	Strong Economic Growth
Special adjustment measures	Reduced impact of economic crisis	40.5	0.0		10.0	0.0	Strong Economic Growth
Infrastructure Programming	Enhanced infrastructure in urban, rural communities, and public infrastructure	5.1	0.9		0.9	0.0(1)	Strong Economic Growth

(1) See Section 2.2.3 for further details.

Strategic Outcome 3: Policies and programs that strengthen the Atlantic economy
Strategic Outcome Performance Measures
Performance Indicator Atlantic regional programs/initiatives implemented or adjusted as a result of ACOA policy, advocacy and/or co-ordination work				Target Continued government support of Agency priorities, collaboration with other federal departments, and engagement with other partners in Atlantic Canada in areas that will contribute to increasing the competitiveness of Atlantic Canada’s economy.
2008-2009 Priorities ACOA will continue to advocate the interests of Atlantic Canada in order to ensure new government initiatives are responsive to the needs of Atlantic Canada through Advocacy Champion files. Continued co-ordination efforts to ensure that Atlantic Canada is well poised to benefit from the Atlantic Gateway, which offers significant opportunities for long-term economic expansion in the Atlantic region.
Program Activity	Expected Results	Forecast Spending	Planned Spending				Alignment with Government of Canada Outcomes
		2007-2008	2008-2009		2009-2010	2010-2011
Policy	Strategic, researched policy decisions reflecting the opportunities and challenges in the Atlantic region’s economy, while considering enterprise and community development potential	7.7	5.9		5.9	5.9	Strong Economic Growth
Advocacy	Federal policies and programs that reflect Atlantic enterprise and community development needs and interests	4.1	4.1		4.1	4.1	Strong Economic Growth
Co-ordination	Co-ordination of other federal departments’ and other stakeholders’ policies and programs within the region to form integrated approaches to development	2.3	2.2		2.2	2.2	Strong Economic Growth

1.4 Management Plans and Priorities

Excellence in Management

ACOA’s ongoing commitment to build and maintain management excellence and strong governance is focused on achieving an appropriate balance between what is achieved and how it is achieved, in keeping with the Government of Canada Management Accountability Framework (MAF)[4].  The MAF summarizes the management conditions necessary in any organization in order to be capable of delivering results to Canadians.  ACOA is using the MAF as a foundational guideline in operational and strategic planning, to ensure that the ten framework elements are in place and working together well, as the foundation of solid organizational management.  For the coming year, the priority areas upon which the Agency intends to focus include the following.  

• The continued implementation and co-ordination of a strong governance and accountability framework[5] to ensure that ACOA remains focused on results, that its programs and policies remain relevant, and that the right decisions are being made to enable the Agency to fulfill its mandate.
• An enhanced capacity to collect and use performance information for informed decision making at all levels.
• An improved integration of the risks ACOA faces, and how best to mitigate them within the Agency’s processes and programs.

Public Service Renewal

“Excellence in service” is a key element of ACOA’s Public Service Renewal strategy.  ACOA currently has an exceedingly capable workforce composed of well-educated, professional people, many with the potential to become the leaders of tomorrow.  The Agency’s corporate vision is to continue to have, within its people, the knowledge, skills and performance excellence required to effectively deliver on its mandate, strategic outcomes and business objectives, as well as to contribute to the Government of Canada’s priorities.  This vision is consistent with the Fourteenth Annual Report to the Prime Minister on Public Service of Canada^[6], in which the Clerk of the Privy Council stressed the importance of maintaining a public service that is relevant and central to the governance and development of this country. 

It is important to note that the Agency is not “beginning from scratch.”  ACOA has been encouraging all employees to identify their career goals and to develop personal learning plans that address their training and development needs, regardless of whether their goal is to be the best at what they do or to become a future leader in the public service.   ACOA’s priorities for 2008-2009 include the following.

• To ground its public service renewal activity within its Integrated Strategic Plan[7], which brings together ACOA’s mission and corporate vision by articulating the Agency’s high‑level, planned directions for the coming years, its current and future human resource needs, and the management imperatives for the organization to achieve its operational goals.
• To enable employees to plan their careers with ACOA and develop learning plans that address the gaps in their skills, knowledge and expertise, through an understanding of the competencies required for management and service delivery excellence.
• To provide employees with training and learning opportunities to ensure the attainment of the Agency’s strategic business and corporate goals through excellence in the delivery of programs and services.
• Through succession planning, to focus human resource development on strengthening the capacity to develop current workers to move upward and horizontally, recruiting experienced professionals and bridging students, while being mindful of opportunities to enhance the Agency’s employee equity profile. 

Values and Ethics

ACOA will continue to highlight the importance of public service values as the foundation for ethical behavior, by keeping the practice of designating an executive “Champion” and profiling values and ethics through internal communications.  The federal Employer’s Code of Conduct has been drafted and is currently going through approval stages.  Once finalized, ACOA will be in a position to develop its own Code of Conduct.  A comprehensive communications strategy and employee information sessions will support the launch of the Agency’s new code. 

1.5 Risks and Challenges

1.5.1 ACOA’s Response to the Changing Economic Landscape

ACOA operates within the changing economic landscape of Atlantic Canada.  The Agency’s broad-based approach to regional economic development addresses the underlying structural challenges in the economy.

Being proactive in identifying opportunities requires the Agency to assess external economic factors that can affect departmental plans and priorities or the delivery of its programs and services.

Assisting the development of economic opportunities for the region’s businesses, individuals and communities continues to be the main challenge facing ACOA.  Guided by the federal government’s comprehensive long-term economic plan, Advantage Canada, the Agency’s plans and priorities, as well as the delivery of its programs and services, reflect the economic environment facing Atlantic Canada.

The following provides an overview of Atlantic Canada’s economic outlook, challenges and opportunities.  Further information on Atlantic Canada’s economy in 2007 is detailed in Section 3.3.2 of this report.

Economic Outlook

As oil and gas production stabilizes, economic activity in Atlantic Canada is expected to moderate in 2008, with real GDP increasing by 2.0%.  Commodity prices are expected to remain strong, and the mining sector should continue to be a significant source of growth in the region.  The completion of several large-scale investment projects in the region should result in very little growth in the construction sector in 2008.  Economic activity in the services-producing industries should remain positive in 2008.

Economic growth in Newfoundland and Labrador is expected to slow significantly in 2008, attaining 1.5%, as oil production stabilizes.  Continued gains in metal mining are expected, as iron ore mining and Voisey’s Bay production remain strong and output from the new Duck Pond copper/zinc mine increases significantly.  The Prince Edward Island economy should register growth of 2.0%, led by the manufacturing sector, as construction activity is expected to remain weak.  Growth in the Nova Scotia economy should attain 2.2% in 2008, mainly due to the resumption of growth in the manufacturing and construction sectors.  Real GDP in New Brunswick is expected to increase by 2.2%, with stronger growth in mining offsetting weaker activity in construction as major projects wind down.

The main risks to Atlantic Canada’s short-term economic outlook are external, namely a more pronounced slowdown in the American economy and the high value of the Canadian dollar.  Recent volatility in financial markets related to sub-prime mortgages has tightened credit conditions for consumers and businesses, while the correction in the U.S. housing sector is ongoing and could have a broader impact on the United States economy.  There is also a risk that the U.S. dollar could depreciate further against the Canadian dollar, in response to global current account imbalances, posing additional challenges to Atlantic Canada’s export sector.

Economic Challenges, Risks and Opportunities

Over the medium and long terms, the Atlantic region will face several challenges as it attempts to ensure an even higher standard of living for the region’s inhabitants.  The considerable rise in the Canadian dollar and high energy costs are factors that affect the global competitiveness of the region’s manufacturing and resource-based firms.  A repositioned Trade and Investment approach for ACOA will further increase exposure of the region’s firms to various export markets in the United States, Europe and Asia, while ACOA’s Atlantic Investment Strategy seeks to raise the level of foreign direct investment in Atlantic Canada.  The Agency also remains a key player in the co-ordination and development of the Atlantic Gateway, which will facilitate trade flows, modernize transportation infrastructure, and lead to increased economic opportunities in Atlantic Canada.

Atlantic Canada remains Canada’s most rural region, characterized by declining population levels and a lack of employment opportunities.  A high level of out-migration from the region, along with low levels of fertility and immigration, remain concerns regarding the future supply of a skilled labour force.  ACOA will continue to work directly with communities to strengthen decision-making capacity and aid in the diversification of local economies.  It will also co‑operate with provincial governments on immigration and population issues.

Despite the potential for economic opportunities associated with its rich oil and mineral resources and major projects, there are significant challenges in developing the provincial economy in Newfoundland and Labrador.  Labour and skill shortages are being noted in various industries province-wide due to out-migration and the shrinking size of the replacement pool available to cover retirements and new employment opportunities.  Historic economic mainstays, such as the fishery and forestry, are hampered by pressures such as high input costs, global competition and the strength of the Canadian dollar.  These challenges are felt particularly in rural communities, where the local economy is often based on a single resource-based industry, and the shrinking workforce has a high proportion of unskilled and older workers.

Prince Edward Island’s main challenges are to achieve further economic diversification through cluster development in the bio-resource, aerospace, information and communications technology, tourism, and wind energy sectors.  These will be combined with key developments in the natural resources and transportation sectors.  Human capital development, along with increased immigration, will be important levers of economic growth in both the short and long terms.

In Nova Scotia, the emergence of new sectors, including the financial and information technology sectors, bodes well for future job creation; however, labour shortages loom.  Determining what skills will be required to support emerging industries, and then developing, attracting and retaining talent in these areas, will be a key challenge.  Among the key challenges facing the Cape Breton region is the seasonality of the labour force, which results in significant variances in labour force activity throughout the year.  Other challenges include the level of out‑migration, an aging population and a small export base outside traditional resource industries.

New Brunswick’s manufacturing and resource sectors will continue to face significant challenges, including resource rationalization, a strong Canadian dollar and high input costs.  Innovation and technology will be key factors for economic development, since they offer businesses the potential for improved productivity.  A number of significant economic opportunities are currently on the horizon for New Brunswick, particularly relating to the energy and mining sectors.  Access to skilled labour and stronger linkages between urban and rural communities will be crucial to maximize the benefits of these growth opportunities throughout the province.

While there is no single solution to ensure future prosperity, the key element of any solution is Atlantic Canada’s productivity performance.  Productivity is a crucial component of the region’s competitiveness, along with other factors such as trade openness, taxation, product quality, market access and exchange rates.  Productivity growth is the most important source of long-term economic growth and is the key determinant of long-run trends in both absolute and relative living standards. 

Despite recent progress, labour productivity in Atlantic Canada remains below the level for Canada, which in turn remains below that of the United States and each of its regions.  A number of factors that contribute to lower levels of productivity in Atlantic Canada fall directly into ACOA’s mandate: lower trade exposure; less innovative activity; less research and development (R&D) spending; lower levels of worker training/managerial skills; and under‑investment in machinery and equipment (technology adoption).  Raising productivity levels requires higher rates of business investment in machinery and equipment, greater levels of research and innovation, more effort placed on developing a skilled and educated workforce, and more spending on infrastructure.

While measures to improve productivity take time to implement and take effect, ACOA will refine programming elements to better reflect the need to encourage more Atlantic Canadian companies to undertake productivity enhancements.  Through the Business Development Program and the Atlantic Innovation Fund, the Agency will continue its efforts to support technology adoption by small and medium-sized enterprises (SMEs), private sector R&D and greater institutional-private sector collaboration (commercialization) on new technologies.  The Productivity and Business Skills program encourages SMEs to improve their competitiveness by investing in the development of technical, commercialization and management skills.

1.5.2 ACOA’s Key Risks

The Agency has identified key risks and challenges that could adversely affect the organization’s ability to meet its three strategic outcomes.  The following provides a description of each of the Agency’s key risks, as well as applicable mitigation measures the Agency will be undertaking. 

Key Risks and Challenges	Risk Mitigation Strategy
Strategic Risk The risk that Agency strategies are not aligned with government economic objectives/policies, nor reflective of emerging economic development concepts, thereby leading to opinions that the Agency is redundant.	The Agency will ensure that programming is aligned with government economic objectives and that promising concepts and approaches used in other jurisdictions are considered for application in Atlantic Canada.  Actions will include the alignment of clear strategies with established government direction, advocacy efforts and the consideration of best practices from other jurisdictions.
Cost of Doing Business Risk Risk that the cost of doing business escalates and represents an increasing portion of the Agency’s budget, adversely affecting operational efficiency and leading to budgetary pressures for programming.	The Agency will undertake initiatives that identify ACOA’s core program and administration responsibilities and the associated costs.  In addition, the Agency will create relevant financial and intellectual models and thresholds, as well as have a challenge process for threshold increases in operating budgets and changes to the mix of operating budgets.
People Management Risk The risk that ACOA’s talent agenda (i.e. leadership, recruitment, training, promotion, work/life balance, competencies) does not adequately sustain the necessary workforce required to carry out the Agency’s mandate in the future and that the Agency experiences a significant loss of corporate memory.	The Agency will identify current and anticipated gaps in the talent agenda and develop a comprehensive plan with targets for timely implementation.  This strategy includes mitigation actions such as the development of employee career and learning plans, as well as adopting a proactive approach to Public Service Renewal.
Data Management Risk The risk that data being collected is inaccurate, incomplete, excessive or inaccessible, so that decision making and efficient use of resources is adversely affected.	The Agency has a strategy to enhance its capacity to collect and use performance information for informed decision making at all levels.  As part of this strategy the Agency plans to carry out a compilation of all data being collected and determine, with users, if the data is relevant for Agency operations.  It will also link data to decision making and performance measurement, and eliminate unused data.
Reputational Risk Reputation risk materializes when the proactive flow of positive information wanes and/or when the negative publicity triggered by certain internal or external events, whether accurate or not, compromises the Agency’s reputation and results in a loss of credibility.	ACOA will emphasize the development and application of proactive communications strategies to convey information about the Agency’s activities and accomplishments to both internal and external stakeholders.  As part of its strategy, the Agency will continue to enhance a Values and Ethics culture and provide rapid response to external enquiries, among other actions.

1.6 Expenditure Profile

Overview

The table on page 20 illustrates the planned spending for the reporting period.  While the Agency’s spending appears to indicate a downward trend, special adjustment programming (i.e. a one-time initiative in response to the closure of the shipyard in Saint John, New Brunswick) and infrastructure funding through the Infrastructure Canada Program (ICP) will no longer be included in spending.  The Saint John Shipyard Adjustment Initiative is being completed, therefore, associated resources are not included in future year spending profiles.  Similarly, the ICP is winding down in 2007-2008 and financial resources will no longer be reported under ACOA’s reference levels, but rather through Infrastructure Canada, thus explaining the change in programming funds.  ACOA will continue to act as a federal delivery partner for the Atlantic region and will play a key role in ensuring that federal government investments are made in public infrastructure in urban and rural communities.

In addition, the Agency’s reference levels were impacted by the government-wide Expenditure Review initiatives totalling $30 million over four years that were introduced in 2004-2005 and 2005-2006.  From 2008-2009 to 2010-2011, the decreases in planned spending are associated primarily with the sunsetting of programs, for which the Agency will seek renewal.

Analysis of planned spending

Planned spending for 2008-2009 of $328.2 million represents a decrease of $42.2 million from forecast spending of $370.4 million in 2007-2008, due primarily to changes in the Special Adjustment Measures and Infrastructure Programming activities of $29.7 million and $11.3 million respectively.  Other changes, totalling $1.2 million, include lower operating costs and reduced requirements for transfer payment programs over various program activities.

Planned spending of $321.9 million in 2009-2010 represents a decrease of $6.3 million from 2008-2009, and reflects a change of $2.6 million related to funding for Canada Business, $3.9 million in transfer payment programs related to the collection of repayable contributions, and increased adjustments of $0.2 million.

Planned spending of $288.9 million in 2010-2011 represents a decrease of $33 million in funding available to the Agency; $30 million of this total is related to the sunsetting of funding received through Budget 2005 for the Atlantic Investment Partnership – Round II.  An additional $2 million is related to the sunsetting of funding announced in the same budget for the Community Futures Program.  Other adjustments total $1 million.

 

Agency Planned Spending by Program Activity

($ millions)

PROGRAM ACTIVITY	Forecast Spending 2007-2008 Main Estimates 2008-2009 Planned Spending 2009-2010 Planned Spending 2010-2011	Main Estimates and Planned Spending	Adjustments (Planned Spending not in Main Estimates)	Adjusted Spending
Fostering the development of institutions and enterprises, with emphasis on those of small and medium size	2007-2008 2008-2009 2009-2010 2010-2011	205.8 214.2 213.2 142.3	7.1(1) 0.0 (7.0) 41.0	212.9 214.2 206.2 183.3
Fostering the economic development of Atlantic Communities	2007-2008 2008-2009 2009-2010 2010-2011	100.8 100.9 95.6 93.4	0.8 0.0 (3.0) 0.0	101.6 100.9 92.6 93.4
Special Adjustment Measures	2007-2008 2008-2009 2009-2010 2010-2011	40.5 0.0 0.0 0.0	(10.8)(2) 0.0 10.0(3) 0.0	29.7 0.0 10.0 0.0
Infrastructure Programming	2007-2008 2008-2009 2009-2010 2010-2011	5.1 0.9 0.9 0.0	7.1(4) 0.0 0.0 0.0	12.2 0.9 0.9 0.0
Policy	2007-2008 2008-2009 2009-2010 2010-2011	7.7 5.9 5.9 5.9	0.0 0.0 0.0 0.0	7.7 5.9 5.9 5.9
Advocacy	2007-2008 2008-2009 2009-2010 2010-2011	4.1 4.1 4.1 4.1	0.0 0.0 0.0 0.0	4.1 4.1 4.1 4.1
Co-ordination	2007-2008 2008-2009 2009-2010 2010-2011	2.3 2.2 2.2 2.2	(0.1) 0.0 0.0 0.0	2.2 2.2 2.2 2.2
TOTAL	2007-2008 2008-2009 2009-2010 2010-2011	366.3 328.2 321.9 247.9	4.1 0.0 0.0 41.0(5)	370.4 328.2 321.9 288.9

(1) Increase in requirements under the Business Development Program.

(2) Decrease in requirements for the Saint John Shipyard Adjustment Initiative due to delays in project approvals.

(3) See section 2.2.2 for further details.

(4) Increase in requirements under the Infrastructure Canada Program resulting from slippage in project cash flows from previous year.

(5) $41 million ongoing annual funding approved in Budget 2005, pending approval by Treasury Board of reference level adjustment.

Full Time Equivalent
2007-2008 2008-2009 2009-2010 2010-2011	736 757 726 711

The change in full-time equivalents (FTEs) from 757 in 2008-2009 to 726 in 2009-2010 is primarily due to the sunsetting of funding for the Canada Business Service Centres and related 31 FTEs.  The change in FTEs from 2009-2010 of 726 to 2010-2011 of 711 is due to the sunsetting of operating funds for infrastructure programming.

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