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Minister's Message

Our government is committed to positioning Canada to exit the current downturn quickly and emerge stronger and more competitive in the global economy. In doing so, Industry Canada and its Portfolio partners will continue to play their key roles in increasing the country's capacity to create jobs and economic growth — for next year and the next decade.

While the recession originated beyond our borders, it had real consequences for Canadians and Canadian business. And despite improving conditions, there is work to be done. In 2010, a major focus will be completing the stimulus measures of Canada's Economic Action Plan (www.actionplan.gc.ca). Introduced in Budget 2009, the Plan's full effect will be felt in 2010–11, and its measures will help solidify the recovery.

Over this period, Industry Canada and its Portfolio partners will work with industries and sectors hit hardest by the recession. Initiatives will include activities to boost community economic development and to extend broadband infrastructure to underserved or unserved areas across the country. To build on the momentum gained through our past investments in science and technology, significant effort will be directed to shaping the knowledge-based economy.

Industry Canada will also focus on supporting business and industry to capitalize on emerging opportunities at home and abroad. Getting our economic frameworks right, through forward-looking policies, is central to ensuring Canada's place in the global marketplace. We remain committed to two-way trade and investment, which raises our capacity to create jobs and economic growth and provides for sustainable prosperity.

In 2010–11, the Federal Economic Development Agency for Southern Ontario will continue to fulfill its mandate of partnering with local governments, businesses and community organizations to bolster Southern Ontario's economy to ensure it is stronger, more vibrant and more resilient in the years to come.

I will work with my colleagues, the private sector and other governments to advance the recovery and build the foundation for a strong, competitive economy.

It is my pleasure to present this year's Report on Plans and Priorities for the Federal Economic Development Agency for Southern Ontario

 

Tony Clement
Minister of Industry

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Minister of State's Message

Last spring, Prime Minister Stephen Harper described Southern Ontario as a region with "distinct needs," adding that its people deserved economic programs delivered in ways specifically tailored to their own priorities.

The Federal Economic Development Agency for Southern Ontario, or FedDev Ontario, was announced in Budget 2009 to help the region recover from the effects of the global economic recession and set the foundation for prosperity going forward. Since its formation in August 2009, the agency has been working with the communities, businesses and residents of Southern Ontario to help reshape the region's economy as part of its economic recovery.

FedDev Ontario is responsible for delivering infrastructure programs in Ontario, as well as economic development programs throughout Southern Ontario. The initial focus is to help hard-hit areas recover from the short-term effects of the global economic downturn with targeted investments in critical infrastructure projects, research initiatives and innovative business growth plans.

Already we are helping to create new jobs and opportunities throughout Southern Ontario by encouraging innovative ideas and the commercialization of research and investments in advanced manufacturing. Heading into our first full year of operation, we aim to implement more community and economic development initiatives that address not only the needs of today, but help communities and businesses meet the challenges of tomorrow.

I am pleased to submit, for tabling in Parliament, the following 2010–2011 Report on Plans and Priorities (RPP) for the Federal Economic Development Agency for Southern Ontario, which outlines how FedDev Ontario will contribute to making the province more competitive, diversified and prosperous.

 

The Honourable Gary Goodyear
Minister of State (Science and Technology)
(Federal Economic Development Agency for Southern Ontario)

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President's Message

The Federal Economic Development Agency for Southern Ontario, or FedDev Ontario, is entering its first full year of operation with momentum. I am honoured to be the President of this organization as it begins to fully implement its programs aimed at renewing the Southern Ontario economy.

FedDev Ontario was announced in Budget 2009 in response to the effects of the global economic recession on Southern Ontario, with a budget of $1 billion over five years. Already the agency's programs are having an immediate impact on communities and businesses. Through initiatives like the Southern Ontario Development Program (SODP), which will deliver close to $176 million in funding in 2010–2011, as well as the Community Adjustment Fund (CAF) and the Recreational Infrastructure Canada (RInC) Program in Ontario, the Agency is addressing critical short-term infrastructure requirements while laying the groundwork for future economic prosperity.

FedDev Ontario fulfills the Government's mandate to build a regional economy that is more diverse and robust. Our programs help innovators take their products to market and encourage the knowledge-based jobs of tomorrow. In particular, the agency is preparing Southern Ontario's manufacturing sector for new economic realities. FedDev Ontario's targeted investments will help manufacturers compete in the global marketplace by increasing productivity levels and encouraging innovation.

Our organization is also engaged in outreach and consultations with stakeholders to seek input on how we can work together to chart a new path — one that is focused on stable, long-term economic growth.

I respectfully submit, for tabling in Parliament, FedDev Ontario's 2010–2011 Report on Plans and Priorities (RPP). The document outlines our immediate goals and initiatives, as well as our long-term priorities.

 

B.A. (Bruce) Archibald, Ph.D.
President
Federal Economic Development Agency for Southern Ontario

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Section I: Agency Overview

Raison d'être and Responsibilities

The Economic Action Plan introduced in Budget 2009 provided $1B over five years for a new Southern Ontario development agency to support restructuring, community and business development, innovation and commercialization initiatives, and other measures to promote economic diversification in Southern Ontario. The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) was formally established on August 13, 2009. In launching FedDev Ontario, Prime Minister Harper said:

This Agency is charged with delivering federal government economic development programs tailored to the specific priorities of workers, businesses and communities in Southern Ontario.

Mandate

The mandate of FedDev Ontario is to help support excellence by making the Southern Ontario economy and its communities more competitive, innovative and diversified.

Scope of Operations

FedDev Ontario is headquartered in Kitchener and has offices in Stratford, Peterborough, Toronto and Ottawa.

The designated geographic area for the Agency consists of the following 37 Statistics Canada census divisions:

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According to the 2006 Census, this area has a population of over 11 million, representing approximately 93% of Ontario's total population and 36% of the total population of Canada.

Governance

FedDev Ontario is part of the Industry portfolio. Its President oversees Agency operations and resources, and reports to the Honourable Gary Goodyear, Minister of State (Science and Technology) (Federal Economic Development Agency for Southern Ontario).

The Executive Committee is the Agency's main governing body. It sets strategic directions and develops, reviews and approves strategic plans, budgets and any other documents or submissions of strategic importance. The Executive Committee is composed of the Agency President (who also acts as chair), the Vice President of Infrastructure, the Vice President of Business and Community Programs, the Director of Audit and Evaluation, the Director General of Communications, the Chief Financial Officer, the Director General of Strategic Policy and the Director of Human Resources.

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Strategic Outcome and Program Activity Architecture (PAA)

The Strategic Outcome and Program Activity Architecture are used to guide planning and reporting for the Agency.

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PAA Crosswalk

To achieve its strategic outcome, FedDev Ontario administers and delivers programs that receive funding from various sources. The table below shows the origin of each program and where it is found in FedDev Ontario's Program Activity Architecture (PAA). For example, the Community Adjustment Fund of Canada's Economic Action Plan is found under sub-program activity 1.1.7, "Development Projects for Communities and Businesses," while the Recreational Infrastructure Fund falls under program activity 1.2, "Infrastructure."

All program expenditures are reported according to the structure and coding of the officially approved FedDev Ontario PAA.

Origin of FedDev Ontario Program	Program	Program/Sub-program in PAA
Canada's Economic Action Plan (Budget 2009)	Community Adjustment Fund	1.1.7
	Recreational Infrastructure Fund	1.2
	Eastern Ontario Development Program	1.1.2
FedDev Ontario	Southern Ontario Development Program	1.1.1
Former Industry Canada Programs Transferred to FedDev Ontario	Community Futures Program	1.1.3
	Ontario Potable Water Program	1.1.5
	Economic Development Initiative	1.1.4
	Brantford Greenwich-Mohawk Remediation Project	1.1.6
Infrastructure Canada	Canada-Ontario Infrastructure Program	1.2
	Building Canada Fund	1.2
	Canada Strategic Infrastructure Fund	1.2
	Canada-Ontario Municipal Rural Infrastructure Fund	1.2
	Municipal Rural Infrastructure Top-Up Fund	1.2

Planning Summary

Financial and Human Resources

	2010–11	2011–12	2012–13
Financial Resources ($ millions)	507.0	216.0	214.2
Human Resources (Full-time equivalents – FTEs)	200	250	250

The reduction in Financial Resources in 2011–2012 results from the sunsetting of current authorities for the Community Adjustment Fund (CAF), the Recreational Infrastructure Canada Fund (RInC), the Eastern Ontario Development Program (EODP), the Ontario Potable Water Program (OPWP) and the Building Canada Fund (BCF).

In contrast, the growth in the FTE count reflects a fully staffed FedDev Ontario as of 2011–2012. In 2010–2011, some work will be managed using temporary staff and other contractual arrangements until permanent staffing can be completed.

Summary Tables by Strategic Outcome

Strategic Outcome: The economy of Southern Ontario is competitive and diversified.

Performance Indicator	Targets
Annual GDP growth rate for Southern Ontario	3%

*http://southernontario.gc.ca/eic/site/723.nsf/eng/h_00102.html **Infrastructure spending for the years 2011–2012 and 2012–2013 does not include expenditures on behalf of Infrastructure Canada.
Program Activity	Forecast Spending 2009–10	Planned Spending			Alignment to Government of Canada Outcomes*
		2010–11	2012*–12**	2012–13**
Community and Business Development	299.8	395.0	204.5	202.8	An innovative and knowledge-based economy Strong economic growth
Infrastructure	113.7	98.4	0.2	0.1	Strong economic growth
Internal Services	14.9	13.6	11.3	11.3	Not applicable
Total Planned Spending		507.0	216.0	214.2

The change in Internal Service expenditures after 2010–2011 reflects reduced start-up costs and lower program expenditures. Expenditures under the Community and Business Development program will change after the 2010–2011 fiscal year as the CAF and EODP sub-programs sunset. The major factor impacting infrastructure spending in 2011–2012 will be the sunsetting of the RInC program. Projected expenditures for 2011 through 2013 are largely attributable to the five-year Southern Ontario Development Program (SODP)

Contribution of Priorities to Strategic Outcome

Agency Priorities for 2010–2011

Strategic Outcome	Management Priorities (New)	Description
The economy of Southern Ontario is competitive and diversified	Establish the Agency's internal services	Build an internal service structure and capability that allows the Agency to effectively manage its affairs and minimize the amount of services procured under Memoranda of Understanding (MOU) and contractual arrangements
	Develop the Agency's organizational structure, plans, procedures and processes	Adopt a proactive approach to planning and introduce efficient processes and policies for effective management
	Develop the Agency's research and policy capacity	Ensure the Agency has the capacity to undertake research and policy analysis to help guide its programs and priorities
	Develop program delivery capacity, such as fully trained staff, databases etc.	Build community and business development program capacity to a level comparable to established infrastructure program delivery capacity
	Operational Priorities (Ongoing)	Description
	Conduct outreach and consultations	Champion dialogue with key stakeholders and citizens across Southern Ontario, focusing on emerging opportunities and challenges in the region
	Develop effective program delivery mechanisms	Continue to develop program delivery approaches that maximize benefits to Southern Ontario clients, e.g., broadening the scope of potential program delivery partners
	Manage EAP initiatives	Since RInC and CAF expire in March 2011, give additional attention to performance and results measurement
	Continue to deliver legacy programs	Deliver programs on behalf of Infrastructure Canada through the FedDev Ontario regional network

Operating Environment and Risk Analysis

External Operating Environment

The financial crisis, the resulting sharp economic downturn, and weakening U.S. demand for Southern Ontario goods and services have intensified the need for adjustment in the region to stem job losses and economic distress.

Despite signs of economic recovery in Canada, growth is likely to remain subdued according to the International Monetary Fund (IMF)*. Many Canadians will face financial challenges as the unemployment rate reaches the 9% level for 2010**. Certain distressed communities in Southern Ontario are likely to see unemployment rates several percentage points above 9%. Sustained growth partly depends on the strength of Southern Ontario's export industries, which are affected by the economic challenges facing Canada's trading partners and by the strength of the Canadian dollar.

In pursuit of its mandate, FedDev Ontario is engaged in outreach and consultations with the most vulnerable communities and businesses in the Southern Ontario economy. Agency program activities are diverse and highly dependent on partnerships for delivery. Internal audits and reviews are planned to ensure the efficiency and effectiveness of these programs.

Internal Operating Environment

Risk and mitigation strategies for 2010–2011 and beyond are described below. Risks are ranked according to the product of their impact and likelihood of occurrence.

Key Risks	Mitigation Strategies
Compliance: The Agency must have experienced resources in place to ensure the compliance of all recipients with program terms and conditions due to the large number of specific projects and associated reporting requirements.	Experienced resources in the Toronto office have been transferred from Industry Canada to the Agency to assist with program delivery. The Atlantic Canada Opportunities Agency (ACOA) is providing FedDev Ontario with additional experienced resources under an MOU arrangement.
Performance Measurement: The Agency will ensure that it meets the challenges in reporting on results for short-term programs due to the large number of recipients.	FedDev Ontario has worked to develop an appropriate short-term performance measurement strategy. With the RInC program, for example, the province has prime responsibility for ensuring projects are completed "on time, on budget." The province has a clear understanding of the reporting requirements involved.
Delivery Capacity: As a new organization, FedDev Ontario is addressing a number of administrative and operational challenges.	The Agency will continue to draw on experienced resources through Memoranda of Understanding and other contractual arrangements until sufficient internal capacity is developed.
Excess Demand: High demand for funding might be a program management challenge.	Proposals will be assessed and given priority based on program eligibility criteria.

Canada's Economic Action Plan (EAP)

In its 2009 Budget the Government of Canada announced Canada's Economic Action Plan. Under the heading*** "Action to Support Businesses and Communities," Budget 2009 addressed the short-term economic challenges facing different sectors, regions and communities as a result of the global financial crisis and helped position them for long-term competitiveness. As part of this initiative, $1 billion over five years was earmarked for the creation of a Southern Ontario development program to help workers, communities and businesses in the region.

Following the Budget 2009 announcement, Industry Canada used various tools within its Portfolio, including agreements with the National Research Council of Canada and the Business Development Bank of Canada, to support projects encouraging economic development in Southern Ontario. These initiatives were undertaken while government officials worked to establish the policy and governance mechanisms of FedDev Ontario.

Economic Action Plan program initiatives also included the Community Adjustment Fund, the Eastern Ontario Development Program and the Recreational Infrastructure Canada program. FedDev Ontario administers these programs in addition to its core Southern Ontario Development program.

Since its inception, FedDev Ontario has provided 2009–2010 and multi-year funding to many Ontario municipalities, including Welland, Orillia, Oshawa, Oxford County and Kingston. Several industry sectors also received funding, including Ontario food & beverage processors and the micro-satellite technology industry.

Expenditure Profile

The chart below shows FedDev Ontario program spending in 2010–2011 as divided among Canadian Economic Action Plan (EAP) initiatives, programs transferred to FedDev Ontario from Industry Canada, FedDev Ontario's core program, SODP and legacy programs delivered on behalf of Infrastructure Canada.

Program initiatives shown in the chart below are EAP, SODP, former Industry Canada programs and the delivery of infrastructure programs for Infrastructure Canada

Planned 2010–2011 Spending by Program Initiative

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Spending Trend ($millions)

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Significant variations in FedDev's Ontario's expenditure profile over the planning period are attributable to sunsetting funds.

Voted and Statutory Items displayed in the Main Estimates
($ millions)

* The Agency was not created until August 13, 2009. (Back to text)
Vote # or Statutory Item (S)	Truncated Vote or Statutory Wording	2009–2010* Main Estimates	2010–2011 Main Estimates
50	Operating expenditures	NA	34.0
55	Grants and contributions	NA	469.5
(S)	Contributions to employee benefit plans	NA	3.4
Total		NA	507.0

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* IMF Press Release No 9/410: http://www.imf.org/external/np/sec/pr/2009/pr09401.htm (Back to text)

** Finance Canada: Update of Economic and Fiscal Projections September 2009:
http://www.fin.gc.ca/ec2009//ec03-eng.asp (Back to text)

***http://www.budget.gc.ca/2009/pdf/budget-planbudgetaire-eng.pdf (Back to text)

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