ARCHIVED - Atlantic Canada Opportunities Agency

• Previous Page
• Table of Contents
• Next Page

This page has been archived.

Minister's Message

Recent economic times have proven challenging. The slowdown in global markets has made it more important than ever that the Government of Canada stay the course in its commitment to supporting businesses and communities, and to helping diversify and strengthen our economy.

Through the Atlantic Canada Opportunities Agency (ACOA), our government is committed to Atlantic Canada, its people, and their potential. That is why it is investing more than $135 million in the region over two years under the Community Adjustment Fund and the Recreational Infrastructure Canada Program – federal stimulus initiatives that are providing real help to Atlantic Canadian communities while laying the groundwork for future economic growth.

The Agency's support to Atlantic Canada is making a vital difference in the regional economy. Indeed, between 2003 and 2008, each dollar ACOA invested directly in Atlantic Canada helped to increase the region's gross domestic product by more than $7. In the coming year, the Agency will continue to play a critical role in the region's recovery as it helps people, businesses and communities establish a foundation for long-term, sustainable prosperity.

In 2010-2011 ACOA will continue to work with its government and private sector partners to build competitive and sustainable communities and businesses across Atlantic Canada. The Agency's policies and programs will foster economic growth by encouraging increased investment in the region, and by supporting research and development that leads to the commercialization of Atlantic companies' innovative, ground-breaking technologies.

The Agency will also continue advancing the Atlantic Gateway by expanding international trade opportunities in such emerging markets as India, South Asia, and the Americas.

I am pleased to present ACOA's annual Report on Plans and Priorities, which details the Agency's priorities, activities and goals for the coming fiscal year.

Section 1 – Agency Overview

1.1 Summary Information

1.1.1 Raison d'être and Responsibilities

Established in 1987, ACOA is the federal department responsible for the Government of Canada's economic development efforts in the provinces of New Brunswick, Prince Edward Island, Nova Scotia, and Newfoundland and Labrador.

ACOA's head office is in Moncton, New Brunswick. Offices are located in all four provincial capitals in Atlantic Canada, each led by a regional vice-president. The Agency also provides services via a range of local field offices throughout the four provinces. In addition, 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 remains constant. ACOA helps the Atlantic region to realize its full economic potential in terms of productivity, competitiveness and growth.

The full economic potential is achieved by identifying and addressing structural challenges in the economy, helping communities and businesses to overcome barriers, and finding new opportunities for growth. ACOA is committed to helping the region make the transition to a more innovative, productive and competitive economy.

1.2 Strategic Outcome and PAA

The diagram below illustrates ACOA's strategic outcome and Program Activity Architecture (PAA). The Agency's program activities and program sub-activities are aligned to the strategic outcome of a competitive Atlantic Canadian economy.

The PAA reflects the results of policy research and analysis, periodic review of program effectiveness, ongoing dialogue with stakeholders in the region, and the priorities and directions of the Government of Canada.

Strategic Outcome	Program Activities[1]	Program Sub-activities
A competitive Atlantic Canadian economy	Enterprise Development	Innovation Entrepreneurship and Business Skills Development Trade Investment Financing Continuum
	Community Development	Community Mobilization Community-based Business Development Community Investment Infrastructure Programming
	Policy, Advocacy and Coordination	Policy Advocacy Coordination
	Internal Services	Governance and Management Support Resource Management Services Asset management Services

1.3 Planning Summary

1.3.1 Financial and Human Resources

Financial Resources ($ millions)

2010-2011	2011-2012	2012-2013
382.1	298.1	296.0

The $86.1 million difference in funding from 2010-2011 to 2012-2013 includes $74.4 million relating to the sunsetting of funding for Canada's Economic Action Plan (CEAP) initiatives. For other key adjustments in planned spending over this period, see subsection 1.5 titled Expenditure Profile.

Human Resources (FTEs)

2010-2011	2011-2012	2012-2013
711	711	711

ACOA was able to absorb the workload associated with the delivery of CEAP initiatives by a temporary reallocation of resources. The timelines for delivery of the Budget 2009 initiatives were such that recruitment of new resources was not the most feasible option. Instead, highly experienced personnel were reassigned for short periods of time to the delivery of CEAP initiatives. This reallocation of resources resulted in a deferral, reduction and/or refocusing of some of the Agency's activity, such as proactive capacity building. Although the level of activity for CEAP initiatives will be reduced, residual responsibilities related to the management of this portfolio will extend beyond 2010-2011. The impact of the termination of CEAP initiatives on workload and reallocation of personnel will be determined in the next planning cycle.

1.3.2 Activity Planning Summary Table

Strategic Outcome: A competitive Atlantic Canadian economy.

Performance indicator	Five-year Target (2008-2009 through 2012-2013)
Increase in Atlantic GDP for every dollar of ACOA expenditure in direct support of business (under review)	$4.50

Program Activity	Forecast Spending 2009-10 ($ millions)	Planned Spending ($ millions)			Alignment with Government of Canada Outcomes
		2010-2011	2011-2012	2012-2013
Enterprise Development[2]	197.8	174.3	161.3	161.4	Strong Economic Growth
Community Development[3]	157.9	160.4	89.3	87.2	Strong Economic Growth
Policy, Advocacy and Coordination	13.7	11.5	11.5	11.4	Strong Economic Growth
Internal Services	40.4	35.9	36.0	36.0
Total Planned Spending	409.8	382.1	298.1	296.0

1.3.3 Contribution of Priorities to Strategic Outcome

Operational Priority	Type[4]	Link to Strategic Outcome	Description
Productivity and competitiveness	Ongoing	A competitive Atlantic Canadian economy (Program activities: Policy, Advocacy and Coordination; and Enterprise Development)	Why this is a priority: To better align the productivity and competitiveness priorities of the Agency, considering the context of the recent global economic situation, and to increase SMEs' likelihood of success in domestic and export markets. Plans to meet the priority: Provide analysis, coordination and advocacy support, and continue to emphasize how the reinforcement of Agency programs and activities is relevant to the national priorities and to emphasize their critical role in delivering the federal agenda in the region. The Agency will also foster improved productivity and competitiveness in Atlantic Canadian companies through measures such as research and development, acquiring advanced technologies, and investing in business skills development.
Innovation and commercialization	Ongoing	A competitive Atlantic Canadian economy (Program sub-activity: Innovation)	Why this is a priority: To ensure alignment with the Government of Canada's economic plan, Advantage Canada, as well as the goals and objectives of the federal Science and Technology (S&T) Strategy. Plans to meet the priority: The Agency will continue to increase activity in and build capacity for innovation, R&D, technology adoption/adaptation, skills development, and commercialization of R&D outputs that contribute to economic growth in Atlantic Canada.
International business development and strategic foreign markets	Previously committed to	A competitive Atlantic Canadian economy (Program sub-activities: Trade and Investment)	Why this is a priority: To ensure alignment with the Government of Canada's Global Commerce Strategy and the related Americas Strategy, and to capitalize to a greater extent on emerging markets such as India. Plans to meet the priority: In the spirit of Canada's Global Commerce Strategy, ACOA aims to provide excellent service to clients and partners to increase exports; to attract foreign direct investment; and to promote Atlantic Canada as an exceptional business partner. Among Canada's strategic foreign markets as identified in the Speech from the Throne and other national initiatives, ACOA aims to exploit a selection of markets where Atlantic Canada can succeed, namely the Atlantic Gateway, the Americas Strategy, the India Initiative, and the Canada-EFTA agreement.
Deliver on Budget 2009 – Canada's Economic Action Plan	Previously committed to	A competitive Atlantic Canadian economy (Program activity: Community Development)	Why is this a priority: Budget 2009 – Canada's Economic Action Plan will make significant investments in support of industries and communities impacted by the current international economic crisis. Plans to meet the priority: In collaboration with other levels of government, ACOA will ensure timely and effective delivery of federal funds, maximizing the economic impact of federal initiatives while maintaining the appropriate balance between rural and urban needs.
Management Priority	Type[4]	Link to Strategic Outcome	Description
Public Service Renewal and business/human resources integration	Ongoing	A competitive Atlantic Canadian economy (Program activity: Internal Services)	Why is this a priority: To support and focus on the four areas as enumerated in the 16th Annual Report to the Prime Minister on the Public Service of Canada. Plans to meet the priority: Led by its deputy minister, ACOA will continue its engagement in its multi-year effort to deliver on the public sector renewal commitments by focusing on integrated business and human resources planning, recruitment, employee development and enabling infrastructure.
Internal services	Ongoing	A competitive Atlantic Canadian economy (Program activity: Internal Services)	Why is this a priority: To effectively meet the ACOA management priorities identified in Round VI of the Management Accountability Framework (MAF) assessment, especially in relation to values and ethics, citizen-focused services, information management, financial management and control, and risk management. Plans to meet the priority: ACOA senior management has approved an ACOA MAF strategy that focuses on these five important areas of management. Action plans to best achieve the desired outcomes have been developed, and the resulting impacts will be re-evaluated through the next round of the MAF assessment.
Values and ethics	New	A competitive Atlantic Canadian economy (Program activity: Internal Services)	Why is this a priority: The Agency's senior management acknowledges that it is fundamentally important for all employees to understand and identify with the Public Service of Canada's democratic, professional, ethical and people values. Plans to meet the priority: ACOA has established a Values and Ethics Strategy, with a primary objective of promoting values and ethics in the Agency. Through this strategy, management will ensure that values continue to be embedded in the Agency's culture, and that an infrastructure is in place to strengthen and build on the already established sound practices to bring the function to the highest level possible.

1.4 Risks and Challenges

1.4.1 ACOA's Operating Environment

ACOA operates within a constantly changing regional, national, and global economic landscape. As the economy changes, the Agency faces risks in providing appropriate economic development programming and initiatives responding to current and emerging influences. Being proactive in identifying risks and opportunities requires the Agency to anticipate and assess external economic factors that can affect the design and delivery of its programs and services, and the achievement of strategic outcomes. Additionally, ACOA must identify factors and risks which could adversely affect its ability to effectively manage internal operations and management. As strategic risks are identified the Agency designs and implements mitigating measures to reduce the impact and likelihood of these risks.

The following provides an overview of Atlantic Canada's economic outlook and risk analysis.

1.4.2 Economic Outlook

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 priorities of the Government of Canada.

The global recession has changed the context within which the federal government is operating, leading to the current priority of providing more immediate measures to encourage economic recovery. In the coming year, the Government of Canada will have a balanced focus on continued economic stimulus with prudent fiscal responsibility. ACOA will continue to be the region's primary instrument for delivering federal economic development programs, including measures under Canada's Economic Action Plan, the Community Adjustment Fund, and Recreational Infrastructure Canada.

According to most private sector forecasters' assessments, the economic recovery has begun in both Canada and the United States. Unfortunately, elevated unemployment levels, especially in the U.S., will continue well into 2010. Economic conditions have stabilized in Atlantic Canada, and job gains have now been registered in five of the last seven months, indicating that the employment situation is improving. Given that the recovery is underway, albeit at a muted pace, the region's economy is forecast to register a positive gain of 1.4% in 2010.

Over the course of the next few years, growth in the Atlantic Canadian economy will be driven by a combination of forces, including global economic trends, the macroeconomic outlook, regional dynamics, and Atlantic Canada's business and industrial structure. International competition from low-cost producers and a high exchange rate will continue to pose challenges to the region's limited manufacturing base and seasonal industries. A high level of out-migration from the region, along with a low birth rate and levels of immigration, remain concerns regarding the future supply of a skilled labour force, posing a significant risk to economic growth in Atlantic Canada over the medium term.

In order to maintain the standard of living for the region's people, productivity levels in Atlantic Canada need to improve. A number of factors continue to contribute to lower levels of productivity in Atlantic Canada relative to the national economy, and fall directly within ACOA's mandate: lower trade exposure, less research and development (R&D) spending, lower levels of worker training and 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.

The ongoing economic restructuring in Atlantic Canada's rural areas has been negatively affected by the recession. Resource industry closures, particularly in the forest products sector, have had a significant impact on the region's rural communities. Many of these communities are also relatively remote from urban economies, where economic growth is diversifying and increasingly knowledge-based. Resource-based industries will continue to be important for regional development, but need to be repositioned to encompass more knowledge content so they can remain globally competitive, can deliver more value-added production, better jobs, higher value exports, and more resilient rural communities. Current initiatives in the region's resource-based industries are focused on ensuring a more competitive forest products industry, more diverse uses of potatoes and other agricultural products, a more sustainable fishery with emphasis on aquaculture and marketing, and further advances in mining and energy technologies.

1.4.3 Key Risks, Opportunities and Strategies

Risk analysis recognizes that ACOA must operate in an environment where both external and internal risks and opportunities impact on the Agency's policies and programs.

External Factors

Skilled Labour Force
As seen earlier in the previous subsection, concerns remain regarding the future supply of a skilled labour force, posing a significant risk to economic growth in Atlantic Canada over the medium term. The Agency will look for supporting projects and initiatives which address the gaps, identified between the needs of the emerging economy and the attributes of the current workforce.
 
Productivity
A number of factors continue to contribute to lower productivity levels in Atlantic Canada, relative to the national economy, that may be addressed under ACOA's mandate. Attention by the Agency to promote new investment in a skilled workforce, and funding targeted at business infrastructure that supports technology adoption, are two primary methods of mitigation, as ACOA invests toward closing the productivity gap with the rest of the country.

Raising the levels of research and development (R&D) and innovation is fundamental to increasing Atlantic Canada's competitiveness and closing the productivity gap with the rest of the country. Through the Atlantic Innovation Fund, the Agency invests in large, cutting-edge R&D projects with the private sector and institutions such as universities and research institutes. The Business Development Program, via its innovation element, also provides funding for R&D projects and for the adoption/ adaptation of leading-edge technologies.

In 2010-2011, ACOA's investments will contribute to leveraging funds from the private sector and other sources toward innovation projects, will encourage the development of partnerships for technology development and commercialization, and will increase the number of commercialized technologies, products, processes and services.

Resource Industries
Resource-based industries will continue to be important for regional development. These industries need to be repositioned. The required change is profound, and there is a risk that these industries and communities will not be able to effect the change, and will become less competitive globally. The Agency has applied several mitigation measures, targeting the region's resource-based industries, such as promoting and supporting activities which foster a more diverse use of agricultural products and a greater emphasis on aquaculture and marketing.

Internal Factors

In the case of internal factors, the risks and mitigation associated with the primary product of the Agency – the funding of a project – are identified and evaluated through the application of a robust, comprehensive client/project risk rating system before funding is approved.

There are, however, issues which have the potential, should satisfactory mitigation not be achieved, to adversely affect the ability of the Agency to fulfill its objectives. These are identified as key risks and are included in the Corporate Risk Profile – the primary component of the ACOA Integrated Risk Management Framework.

By providing an independent analysis, the Agency's Audit Committee offers guidance to senior management by reviewing, at least annually, the key risks and the Agency risk arrangements, to ensure that there are no known misstatements or omissions.

Key Risks      

The key risks are determined through an internal independent review with senior management, interviews with project delivery staff, and an analysis of related documentation and information. They are approved by ACOA's Executive Committee, and are monitored constantly to ensure implementation of appropriate mitigation measures.

Key Risk	Risk Mitigation Measures	Linkages to PAA[5]
Efficiency Risk In consideration of potential pressures on resource levels, there is a risk that compensating efficiency gains are insufficient to maintain the Agency's ability to deliver on its mandate.	The Agency will apply information gained from a resource utilization review, evaluations, a strategic review, and program renewal to drive opportunities for efficiencies.	All program activities
Management Information Risk Risk that senior management does not have readily accessible, comprehensive, targeted data to understand the financial and program health of the organization and support decision making.	ACOA has performed well in providing management with ad hoc data for specific initiatives and ongoing activities. The Agency will focus on identification of key data to be reported on a regular schedule, with an effort to highlighting exceptions to benchmarks.	All program activities
People Management Risk The risk that ACOA's talent agenda (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 and has difficulty implementing change management.	The Agency has undertaken several mitigating measures such as a resource utilization review, integration of HR and business plans, values and ethics training, a target of learning plans for all employees, and leadership initiatives. The Agency will monitor the results from these measures, to determine if expectations were met and the level of risk mitigated satisfactorily.	All program activities
Financial Accountability Risk The risk that ACOA will have difficulty fulfilling its responsibilities for compliance with Treasury Board requirements relating to financial management policies.	By fiscal year 2011-2012 ACOA must provide attestation that internal controls are designed properly and operating effectively. This will also provide assurance that the Agency's financial statements are auditable. An action plan is in place to meet these requirements. Emphasis will be placed on the documentation of Agency-wide processes and operations and the evaluation of supporting internal controls.	All program activities

1.5 Expenditure Profile

Forecast and planned spending amounts by program activity for the period 2009-2010 through 2012-2013 are provided earlier in this document, under paragraph 1.3.2 titled Activity Planning Summary Table.

Planned spending of $382.1 million in 2010-2011, compared to the 2009-2010 forecast spending of $409.8 million, represents a total decrease of $27.7 million from the previous year. This results from a number of normal business practices and procedures (including the sunsetting of funding for certain programs and initiatives for which the Agency is seeking renewal).

Sunsetting of programs:

• $30.0 million decrease through sunsetting of funding for the Atlantic Investment Partnership – Round II; and
• $2.1 million decrease through sunsetting of funding for the Community Futures Program.

Normal cash flow variations:

• $13.7 million net increase in requirements under Canada's Economic Action Plan initiatives; comprising a $13.9 million increase under Recreational Infrastructure Canada and a $0.2 decrease under the Community Adjustment Fund;
• $4.5 million decrease in requirements under the Business Development Program relating to normal cash flow fluctuations; and
• $4.8 million decrease from what was available in 2009-2010, including an operating budget carry forward, personnel costs, and operational funding for the delivery of infrastructure programming.

The Agency's planned spending is at approximately the same level for the following two fiscal years, specifically $298.1 million in 2011-2012 and $296.0 million in 2012-2013.

The majority of the $86.1 million difference in funding available to ACOA from 2010-2011 to 2012-2013 relates to the sunsetting of funding for the initiatives related to Canada's Economic Action Plan, specifically:

• 50.1 million relates to the Community Adjustment Fund; and
• $24.3 million relates to Recreational Infrastructure Canada initiative.
• Other key adjustments include:

Other key adjustments include :

• $9.1 million decrease related to the collection of repayable contributions;
• $2.5 million decrease for the Official Languages Action Plan; and
• $0.1 million decrease in other requirements such as student employment and operational funding for the delivery of infrastructure programming.

1.5.1 Planned Spending by Program Activity 2010-2011

[D]

1.5.2 Canada's Economic Action Plan

[D]

1.5.3 Voted and Statutory Items
($ millions)

Vote # or Statutory Item (S)	Truncated Vote or Statutory Wording	2009-10 Main Estimates	2010-11 Main Estimates
1	Operating expenditures	79.6	84.8
5	Grants and contributions	245.2	288.9
(S)	Contributions to employee benefit plans	7.6	8.4
Total[6]		332.4	382.1

• Previous Page
• Table of Contents
• Next Page