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

• Previous Page
• Table of Contents
• Next Page

This page has been archived.

2 Agency Priorities and Plans

The goal of this section is to present priorities and associated plans for 2008-2011. Priorities represent the most important areas on which the Agency has chosen to focus for 2008-2009 in order to respond more closely to government priorities, meet the regions' socio-economic challenges and ensure more effective management of the organization. Other intervention not related to priorities comprises the Agency's routine activities.

The Agency's overall intervention is covered in section 3, which presents total planned expenditures by program activity.

2.1 Context of Agency intervention

The following section presents a brief profile of the environment in which the Agency operates, and the main risk factors that influence its intervention.

2.1.1 Institutional context: Government priorities

The Government of Canada recently shared its vision with Canadians in the Speech from the Throne: Strong Leadership. A Better Canada. Building on its successes, the government has set itself five priorities, two of which particularly concern the Agency:

• Provide effective economic leadership: with Advantage Canada, the government has laid out a long-term economic plan to secure better-paying jobs for Canadians and solid economic growth. The next steps in that plan are aimed at ensuring that Canada has a modern infrastructure, an innovative and entrepreneurial business environment, and a tax system that rewards hard work—all based on a foundation of sound fiscal management. The government also aims to facilitate Canadian enterprises' access to foreign markets, where they will be able to compete with the best in the world.
• Strengthen the Federation and its democratic institutions: notably through the celebration of the 400th anniversary of the founding of Québec and support for linguistic duality through a new Action Plan for Official Languages.

The Speech from the Throne also underscored the government's desire to stand up for Canada's traditional industries and its awareness of the challenges facing such key sectors as forestry, fisheries, manufacturing and tourism. The government intends to continue its action to support workers as these industries adjust to global conditions. To that end, it announced a Community Development Trust in January 2008.

2.1.2 Socio-economic context

Overall, the Quebec economy is in good shape. Growth was strong over the past few years. However in 2008, the Quebec economy will be affected by the economic slowdown in the United States, and will continue to feel the impact of the higher Canadian dollar. This should reduce Gross Domestic Product growth, even if domestic demand (consumer spending) continues to support growth.

The labour market is doing relatively well. Employment growth in 2007 was reflected in the unemployment rate (7.2%), which posted a 30-year low. This increase in employment was seen in almost all regions of Quebec, with employment growth in the services sector offsetting losses in manufacturing. On the other hand, the economic slowdown should translate into weaker job growth in 2008.

The manufacturing sector is greatly affected by the higher Canadian dollar and is undergoing changes generated by competition from emerging nations. The sector lost 68,000 jobs between 2002 and 2006. This slowdown was accentuated in 2007, with the loss of 38,000 jobs. Wood products, paper and transportation equipment sectors were especially hard hit. The decline in the manufacturing sector particularly affects Montréal and the central regions. The difficulties experienced by the sector since 2002 will likely continue in the months to come, as the dollar remains high and the transformation of the sector continues.

Other sectors are also undergoing adjustment. On the primary sector front, the economic context in which the forestry industry operates has deteriorated over the past two years, leading to numerous job losses. The industry is suffering from the negative effects of the softwood lumber dispute with the United States, the high cost of fibre supply, higher energy prices and the adjustment required in the wake of the 20% reduction in stumpage dues. The crisis in the forestry industry particularly affects outlying regions. In fact, many communities are vulnerable to this, as their economic base is undiversified. Dependence on a single resource combined with, among other things, the distance to market requires economic diversification to secure the development of these devitalized regions.

On the other hand, the services sector continues to post solid growth. Wholesale trade, accommodation and food services, information, cultural industries and recreation gained thousands of jobs in 2007. Services, which have seen substantial growth in recent years, will continue to expand, to the benefit of all regions. In the major urban centres of Québec and Gatineau, public administration provides considerable stability, while Montréal has very dynamic service industries.

The Quebec economy continues to be transformed through sectoral adjustments, and this transformation must lead it to higher productivity. Indeed, Quebec's productivity is lower than overall Canadian productivity, and than the productivity of Ontario and the majority of Organisation for Economic Co-operation and Development (OECD) countries. Closing the productivity gap requires increased investment. In that regard, the high value of the Canadian dollar, which lowers the price of machinery and equipment, is conducive to investment in new equipment. An economic slowdown could, however, put the brakes on this modernization by enterprises. Innovation also helps enhance enterprises' productivity. While they are active in research and development (R&D), Quebec enterprises—especially small- and medium-sized enterprises (SMEs)—have difficulty commercializing their innovations.

2.1.3 Organizational context

Program context

In a concern for continuous improvement in procedures, the Minister of the Agency consulted chief development agents in all regions of Quebec, through 14 advisory committees (one per business office), to find out the needs with respect to regional economic development.

The Minister also introduced a new guideline on the funding of non-profit organizations. The Agency will continue to work with NPOs in the context of ad hoc, time-limited projects that generate measurable results for the economy of Quebec's regions. For key organizations operating in priority niches, a transition period will enable them to find other funding sources for their basic operations. The Agency will continue to fund regional tourism associations and regional export promotion organizations. Under this measure, it continues to support NPOs' projects while being able to free up monies for enhanced funding of projects involving, among others, SMEs and community economic facilities.

Management context

Within the framework of Public Service Renewal, the Agency undertook a series of steps during the past year to help it contribute fully to that initiative. It took part in large-scale departmental and interdepartmental recruitment and in promotion of career opportunities within universities; it ensured that the majority of its employees have a learning plan and that the competencies of delegated managers are updated; it also conducted human resources planning fully integrated with its business planning. These efforts will be continued in the coming years, in order to attract and maintain a representative, highly professional work force whose competencies match the organization's evolving needs.

In order to implement the Federal Accountability Act successfully, the Agency has already undertaken a series of significant steps to enable it to meet the new requirements, such as the establishment of the internal audit committee, introduction of its management capability improvement plan based on the Management Accountability Framework (MAF) evaluation and drafting of the action plan in response to the main recommendations of the Independent Blue Ribbon Panel on effective program delivery.

Also pursuing the government's priority with respect to the enhancement of expenditure and result management, the Agency made substantial progress in that area over the past year. For instance, it:

• renewed its programs, which came into effect in April 2007, in line with a results-based approach
• established a common set of results and performance indicators to report on its performance, measure the results of assisted enterprises' projects and evaluate the impact of its programs
• trained business office advisors on results-based management (RBM)
• conducted an analysis of its effectiveness and efficiency and reviewed its governance structure
• identified its main corporate risks and adjusted its control levels accordingly
• optimized the allocation and use of its resources by setting up an activity-based costing system for delivery of its programs.

It is against this backdrop that business plans, management charts and managers' performance agreements will over the next few years be placing greater emphasis on results. Upcoming departmental performance reports will seek to explain not only what the Agency does with taxpayers' money, but also the results generated by its action. All these improvements will enable the Agency to analyse its spending and performance, and to realign and reallocate its resources on an ongoing basis toward higher-performance activities that are more important for Canadians.

2.2 Priorities and plans

The Agency plans its priorities and resources on the basis of departmental results and in response to new government priorities and new regional development challenges. The Agency has chosen to modify how it establishes the investment targets associated with priorities. Thus, starting in 2008-2009, these targets will be determined on the basis of new projects approved during that year, rather than of all projects active during the year (as that includes a large number of projects approved during previous years that were evaluated on the basis of different planned results). This will help ensure closer alignment between strategic intentions, the intervention selected to implement them, and the results obtained.

For the upcoming year, the Agency has selected four priorities: two program priorities, and two management priorities. Since economic development is a long-term process and the challenges with respect to which the Agency acts evolve slowly, the Agency's 2008-2009 program priorities are in line with those presented in last year's Report on Plans and Priorities (RPP). Indeed, the Agency will pursue the economic diversification of regions and communities posting slow economic growth and reinforce the performance of innovative, competitive SMEs in key sectors. The Agency intends to devote for the first priority some 50–55% of new commitments approved during 2008-2009 in the regions and communities concerned, while for the second priority the investment goal is approximately 30–35% of all new commitments approved during 2008-2009.

The management priorities will enable the Agency to improve its procedures on an ongoing basis so as to increase its effectiveness and efficiency. They will translate into implementation of an action plan taking into account the government's response to the report of the Independent Blue Ribbon Panel on effective delivery of grant and contribution programs and continuation of the improvement of expenditure, result and risk management.

Summary of Agency Priorities and Plans

Program Priorities

Management Priorities

2.2.1 Program priorities

The Agency's program priorities could be adjusted during the course of the year to ensure their complementarity with initiatives arising from the new federal Community Development Trust that will target vulnerable communities, among other things.

Priority #1: Continue the economic diversification of regions and communities posting slow economic growth

As its first priority, the Agency wishes to pursue the economic diversification of regions and communities posting slow economic growth. It intends to contribute to supporting economic activity in these regions, namely, the seven devitalized regions (Abitibi-Témiscamingue, Bas-Saint-Laurent, Côte-Nord, Gaspésie–Îles-de-la-Madeleine, Mauricie, Nord-du-Québec and Saguenay–Lac-Saint-Jean) and 21 regional county municipalities (RCMs) whose economic vitality is low. The Agency will pay special attention to communities that depend on traditional economic sectors, in particular manufacturing. Certain parts of these regions and RCMs are far from the major North American consumer markets. They show little economic diversification, and this makes them vulnerable when demand for their main products flags, and they have to increasingly adjust to the tightening of rules governing the harvesting of their natural resources (e.g. reduced stumpage dues).

The Agency intends to support and foster the completion of projects likely to respond to the issues specific to those communities in order to mitigate socio-economic adjustment difficulties, renew the entrepreneurial base and facilitate economic diversification by building on their specific assets and potential on the industrial, tourism, cultural or knowledge fronts. The Agency intends to implement the following plan:

• Community Economic Diversification Initiative – Vitality (CEDI-Vitality)
• Community Economic Facilities for the Regions support measure.

Other initiatives may be designed and implemented during the course of the year to respond proactively to the specific issues of regions and communities posting slow economic growth.

Through this priority, the Agency is intensifying its efforts toward achieving the outcomes of the Development of communities program activity.

Community Economic Diversification Initiative – Vitality (CEDI-Vitality)

There are substantial economic disparities among the regions of Quebec. The prosperity of some communities still often depends on the health of a single industry, or even a single enterprise. Moreover, it often relies on the harvesting and processing of natural resources. These communities have a greater need of support for diversification of their economic fabric.

The Agency is continuing the initiative announced in Fall 2006, Community Economic Diversification Initiative – Vitality (CEDI-Vitality), which targets the economic diversification of communities facing adjustment challenges and posting a low vitality index. This initiative will thus contribute to diversifying the economic base and reducing the dependency of communities whose economy is based on a single industry or sector or on the harvesting of natural resources; it also aims to create sustainable employment.

Community Economic Facilities for the Regions support measure

A region's ability to attract investment and new businesses is influenced by the presence of certain assets, including adequate community economic facilities, such as an industrial park, ferry wharf, section of railway line or telecommunications network. This is an important factor in the development of regions that affects the maintenance and reinforcement of their industrial activity. But Quebec's regions and communities experiencing slow economic growth suffer particularly from insufficient or obsolete facilities. For that reason, the Agency established in Fall 2006 a two-year pilot measure to support the construction and upgrading of community economic facilities.

This measure will enable the assisted regions and communities to benefit from community economic facilities that contribute directly to the reinforcement of their economic activity and even facilitate economic diversification. The projects receiving assistance will have to support reinforcement of the economic base directly, generate direct, measurable, short- or medium-term economic spinoffs, create a significant number of sustainable jobs, facilitate access to the main markets outside the region and enable a region or community to acquire lasting competitive advantages. The success of the measure will be gauged in particular by the creation and development of enterprises, the maintenance and creation of sustainable employment and the increase in trade.

Priority #2: Reinforce the performance of innovative, competitive SMEs in key sectors

As its second priority, the Agency wishes to reinforce the performance of innovative, competitive SMEs in key sectors, and it is targeting improved international competitiveness of these SMEs. The sectors it is promoting are, notably: (1) aerospace, life sciences, nanotechnology, biofood, and environmental, information and communications technologies for Greater Montréal; (2) optics-photonics, health and nutrition, medical equipment and computer technology for the major urban centres (Québec and Gatineau); (3) biotechnology, metallurgy, forestry and agrifood for the central areas; and (4) aluminum, bioresources, renewal energy, forestry and mining for the outlying areas.

To realize this priority, the Agency intends to implement the following plan:

• market development
• enhancement of enterprises' strategic capability (innovation management, value chain management, pre-startup and startup of innovative enterprises).

Other initiatives could be developed and implemented during the course of the year to support the performance of innovative, competitive SMEs in key sectors.

Through this priority, the Agency is intensifying its efforts toward achieving the outcomes of the Competitiveness of enterprises (SMEs) program activity.

Market development

Market globalization has generated new business opportunities. But it has also intensified competition, and this represents some sizeable challenges for enterprises which have to carve themselves out a place on emerging markets. The Agency has decided to intensify its assistance for increasing SMEs' export capability. To that end, it will continue, in particular, to implement the Partnering with enterprises for commercialization measure announced in Fall 2006 and will upgrade it to reflect the lessons learned in 2007-2008. In fact, the difficulties associated with innovative, international exporting enterprises' business activities are among the main obstacles to their development. SMEs' competitiveness in the face of emerging markets largely depends on their ability to stand out on international markets, and the challenge of commercialization is particularly great for most Quebec SMEs.

In this context, SMEs have to have access to resources to gather and evaluate the information they need, develop strategies toward international markets and market their products and services.

In concrete terms, this measure is already enabling Quebec enterprises or groups of enterprises to finance up to 50% of the salary of export specialists. It therefore makes it possible to provide enterprises with new strategic capability with respect to commercialization abroad and improve their competitiveness of foreign markets. This is in addition to the support already provided by the Agency to stimulate SMEs' innovation capability, support the commercialization of their products and services and increase their productivity. The spinoffs will include an increase in the value of exports and the number of new exporters.

Enhancement of enterprises' strategic capability

In an environment characterized by globalization and fierce competition, enterprises' competitiveness depends on their ability to innovate in terms of products and processes and on their ability to integrate with major networks of distributors or manufacturers. In fact, enterprises have to enhance their strategic capability in order to take advantage of the opportunities afforded by emerging markets and to meet the competition.

This is the perspective in which the Agency intends to foster the enhancement of enterprises' strategic capability: innovation management, value chain management, and pre-startup and startup of innovative enterprises. To that end, the Agency intends to support access to competencies, implementation of targeted development activities and implementation of advanced management systems and methods.

With respect to innovation management, the Agency wishes to give priority to both management capability as such (e.g. introducing and managing a planning system) and technical capability (e.g. staff's command of technology).

For value chain management, the Agency intends to pay special attention to the integration of globalized value chains, that is, implementation of projects that will enable innovative subcontracting firms to meet major manufacturers' new requirements (in terms of processes, logistics, production information management, etc.), and to redeployment of the value chain so as to optimize performance and productivity.

With respect to pre-startup and startup of innovative enterprises, the Agency intends to support the establishment and first phases of expansion of enterprises deemed innovative and strategic for a region's development as well as the expansion and modernization of means of production. Innovative enterprises in startup phase are those engaged in a significant process of product, procedure or technology development during their startup phase.

2.2.2 Management priorities

Priority #3: Implement the Departmental Action Plan with regard to the report of the Independent Blue Ribbon Panel on effective program delivery

The Independent Blue Ribbon Panel report of December 2006 sets out a series of recommendations to improve the delivery of grants and contributions. These recommendations deal with increasing the transparency of the grants and contributions administration process, reducing processing times, reducing administrative burden on applicants and recipients, standardizing procedures across departments and improving inter-departmental coordination and collaboration. The Agency is directly affected by the issues raised in the report and is actively involved in responding to the report's recommendations. Indeed, the Agency has been identified as one of the vanguard departments which are called upon to spearhead the Government of Canada's response to the report.

The Agency's involvement takes several forms. It participates in the Technical Working Group developing specific measures in response to the report, as well as in the steering committees at the Assistant Deputy Minister and Deputy Minister levels. As such, it takes part in a number of the Pathfinder Projects, which involve multiple departments working together to develop joint solutions to several of the issues raised in the report. The Agency provides feedback and suggestions with regard to policy changes which are being developed by Treasury Board. Finally, it has developed a Departmental Action Plan which aims to implement within the Agency the various recommendations of the report which can be undertaken on an independent basis.

The Departmental Action Plan is being implemented over a period of twelve to twenty-four months. The major elements of the plan include:

• renewing the Agency's Web site to provide information which corresponds more completely and clearly to applicant needs
• improving audit and file monitoring procedures so as to improve its operating efficiency, and reduce administrative burden upon applicants and recipients while enhancing the Agency's ability to manage by results and improve risk-based management
• restructuring internal operating procedures so as to reduce processing time for applications while publishing new service standards to reflect these changes.

Taken together, these measures will enable the Agency to respond to the major issues raised in the report while providing significant benefits to the Agency in terms of its enhanced operating efficiencies. Implementation of these measures will require the significant involvement of virtually every sector of the Agency, including Operations, Corporate Services, Communications, Policy and Programs, and Legal Services.

Priority #4: Continue improving management of expenditures, results and risk

Federal departments have to implement simultaneously several government-wide initiatives associated with enhancement of expenditure and result management, such as the Management Accountability Framework, the Management, Resources and Results Structure, new evaluation and audit policies, the in-depth strategic review of spending every four years, and so on. The Agency's commitment to this government agenda for change will translate into the progressive, integrated implementation of all these initiatives over a three-year period, based on an in-house communication plan and a change management plan.

Realistically, the Agency therefore intends to continue improving expenditure, result and risk management in three phases:

• Phase I: reinforcement of mechanisms with respect to expenditure, result and risk management
• Phase II: acquisition of quality, timely information on expenditures and results
• Phase III: integration of information on costs and results in decision-making.

Phase I – Reinforcement of mechanisms with respect to expenditure, result and risk management

This phase initiated in 2007-2008 is aimed essentially at reviewing the Agency's strategic directions and program activity architecture; clarifying results and performance indicators; reviewing resource allocation models; identifying corporate risk; evaluating management capability in line with the MAF; and adjusting governance structure. This phase is also aimed at starting the integration of these elements in planning (e.g. business plans and yearly audit and evaluation plans).

Phase II – Acquisition of quality, timely information on expenditures and results

This second phase beginning in 2008-2009 is aimed first of all at improving the quality of cost and performance information. The Agency will ensure that quality control mechanisms are appropriate and efficient. It will broaden its data collection modes and methods, both to improve control of operating costs and to be able to measure results in the long term. Finally, this phase is also marked by experimentation with result and investment targets. New tools (e.g. management charts) will be developed to support the organization in learning how to carry out performance measurement and monitoring.

By relying on better information and acquiring appropriate tools, the Agency will monitor its performance more rigorously, and this will enhance its expenditure review capability.

Phase III – Integration of information on costs and results in decision-making

The 2009-2010 planning cycle should be based on improved expenditure, performance and risk analyses. It will be characterized by the establishment of realistic, firmer performance targets (which will be identified in the Agency's next Report on Plans and Priorities). It will then be possible to link these results with managers' performance agreements. Greater control and regular review of operating costs and results will enable the Agency to make enlightened investment and resource allocation decisions. Program renewal (scheduled in 2011-2012) will require a specific evaluation of the Agency's impact on Quebec SMEs and regions. Phase III will therefore be the start of preparations for the re-examination of the strategic directions, which could potentially lead to changes in certain aspects of the programs.

Training, in-house communications and change management

This departmental program for change comprises more than 50 initiatives altogether. Implementation of some of them requires changes to tools and work processes. Adapted procedures manuals and appropriate training will support the advisors' and analysts' work. To keep employees up-to-date on changes, and above all to maintain a high level of commitment from the entire organization, regular communications will continue to be produced. Finally, coordination and execution of all the work in progress will continue to be ensured by a departmental steering committee made up of members of senior management.

• Previous Page
• Table of Contents
• Next Page