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Minister's Message

Our government is committed to positioning Canada to be stronger and more competitive in the global economy. 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.

That is why the Government of Canada is committed to the people of southern Ontario and to making southern Ontario more competitive and productive. Therefore, Industry Canada and its partner agency, the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), will continue to work with local governments, businesses and communities to support the delivery of programs to create a prosperous and globally competitive Ontario.

In the coming year, FedDev Ontario will continue to build on its successes to date by investing in projects across southern Ontario. FedDev Ontario is laying the groundwork for future economic competiveness and prosperity by supporting the innovation, transformation and diversification of Ontario's economy through collaborative partnerships, advocacy and strategic investments in businesses and communities.

Industry Canada and FedDev Ontario remain committed to strengthening our capacity to create jobs and for economic growth – building a stronger economic framework is central to ensuring Canada's place in the global marketplace and ensuring a more prosperous future for all Canadians.

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

Minister of State's Message

I am pleased to present the 2011–2012 Report on Plans and Priorities for the Federal Economic Development Agency for Southern Ontario (FedDev Ontario). The report outlines how FedDev Ontario will contribute to making the region more competitive, innovative and diversified.

Since its formation in August 2009, FedDev Ontario 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.

The economy remains the top priority of our government. Since FedDev Ontario was launched, more residents of southern Ontario are working thanks to Canada's Economic Action Plan.

As this region's economy recovers from the global recession, our government will ensure that our policies continue to reflect the values we share with hard-working families and provide new opportunities for southern Ontario businesses.

The Economic Action Plan is creating jobs and growth in southern Ontario - to make the most of opportunities to innovate, adapt and prosper. Our plan is working, the economy is growing and it is imperative that we build on this momentum as we prepare for the challenges of the future.

Our government is committed to strong economic growth and an innovative knowledge-based economy. We will help revitalize and renew the economy of the southern Ontario region to ensure communities and businesses can innovate and the economy can continue to grow now and into the future.

This past year, we launched a series of initiatives to address short-term realities while setting in place the conditions to strengthen the economy for the future. By investing in people, businesses and communities, we can create the conditions for prosperity and provide new opportunities for jobs and economic growth in southern Ontario. By doing so, we aim to create a Southern Ontario Advantage.

We will continue strategic investments in the region and work with southern Ontarians to promote economic growth and enhance competitiveness - to return Ontario to its natural cycle of prosperity. We will work closely with our partners to encourage investment in the region and to improve our global competitiveness so that the people of southern Ontario can continue to enjoy a quality of life that is envied throughout the world.

Section I: Departmental Overview

Raison d'être and Responsibilities

The global economic recession had a significant impact in every region of Canada, including southern Ontario. As Canada's most populous region — home to more than 12 million residents living in 288 communities — southern Ontario's economy is a key contributor to the health of the Canadian economy as a whole. The region has distinct economic needs for programming tailored to its priorities. As a result, the Government of Canada created the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), in 2009, as part of Canada's Economic Action Plan.

FedDev Ontario was established, with a five-year mandate, to help respond to Ontario's economic challenges, to help restore the Province to its cycle of prosperity and to help position southern Ontario as an important economic driver to building a stronger economy and a stronger Canada.

To fulfill its mandate, FedDev Ontario supports the competitiveness, innovation, and diversification of southern Ontario's economy by: delivering strategic investments to businesses, non-profit organizations and communities; establishing and strengthening collaborative partnerships with key economic stakeholders; and representing the region's interests at the federal and national level.

Scope of Operations:

FedDev Ontario is headquartered in Kitchener and has offices in Toronto, Ottawa, Stratford and Peterborough. Its mandate covers southern Ontario, as defined by the following 37 Statistics Canada census divisions:

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According to Statistic Canada's annual population estimates for 2009, southern Ontario has a population of more than 12 million people, representing approximately 93% of Ontario's total population and 36% of the total population of Canada.

Accountability Framework

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 Innovation and Community Development, the Chief Financial Officer the Director of Audit and Evaluation, the Director General of Communications, the Director General of Strategic Policy and the Director of Human Resources.

Strategic Outcome and Program Activity Architecture (PAA)

The PAA demonstrates how FedDev Ontario activities directly support its strategic outcome and ultimately how they support key Government of Canada outcomes. (Please refer to Canada's Performance Report for more details on all government wide outcomes.)

FedDev Ontario launched a series of initiatives to address short-term realities while setting in place the conditions to strengthen the economy for the future. These initiatives are reflected within the program activities for 2011–12. By investing in people, businesses and communities, the Agency will create the conditions for prosperity and provide new opportunities for jobs and economic growth in southern Ontario. Building a Southern Ontario Advantage is FedDev Ontario's approach for returning southern Ontario to a cycle of prosperity. It will help attract new businesses, and new national and foreign investors, while also supporting existing businesses and making sure they stay here in southern Ontario.

* Initiatives which support the Business and Innovation Development program activity and sub-activities within the 2011–12 PAA structure are: Investing in Business Innovation, Scientist and Engineers in Business, Applied Research and Commercialization, Technology Development Program, and Prosperity Initiative (Productivity and Competitiveness).

** The Economic Regional Development and Infrastructure program activity within the 2011–12 PAA structure does not include the Building Canada Fund (BCF) and the Recreational Infrastructure Canada program (RInC) extended to October 31, 2011 under Canada's Economic Action Plan, at this time, nor does it include the Community Adjustment Fund (CAF) program which sunsets at the end of 2010–11. Initiatives which support the program sub-activities are: Youth-STEM, Scientists and Engineers in Business, Graduate Enterprise Initiative, Official Language Minority Communities Development Program (Economic Development Initiative), Prosperity Initiative (Regional Diversification), and Brantford Greenwich-Mohawk Remediation Project.

*** Included in the 2010–11 Infrastructure program activity of the PAA are the Recreational Infrastructure Canada program (RInC) and the infrastructure programs that FedDev Ontario administers on behalf of Infrastructure Canada. These include the Canada Ontario Municipal Rural Infrastructure Program (COMRIF), the Municipal Rural Infrastructure Fund (MRIF), the Building Canada Fund Communities Component (BCF-CC).

Planning Summary

Financial and Human Resources (millions)

Activity Planning Summary Table

Contribution to Strategic Outcome

In its first year and a half, FedDev Ontario balanced the priorities of delivering national programs for southern Ontario and developing new initiatives while developing and strengthening the internal capacity of the Agency.

In 2011–2012, FedDev Ontario will focus its efforts to deliver on its four program activities (Business and Innovation Development, Economic Regional Development and Infrastructure, Policy, Advocacy and Coordination, and Internal Services) through three operational and management areas of focus.

The three areas of operational and management focus includes: investing through a balanced strategic portfolio; enhancing collaboration and strengthening partnerships and stabilizing processes and systems. Each of these areas of focus have been identified as being critically important to achieving the Agency's strategic outcome and are described in greater detail below.

1. Investing through a balanced strategic portfolio

FedDev Ontario's ability to be responsive and nimble to the needs of southern Ontario will be key to its success. In the fast-paced environment of today's global economy, FedDev Ontario must be able to manoeuvre quickly and effectively with a coherent, strategic and balanced approach.

Plans to meet this area of focus

• Deliver on its commitments through the suite of programming available and seek feedback from clients and partners on how to continuously improve.
• Evaluate and assess the effectiveness of existing programs and services to ensure that the Agency's efforts are responsive to the economic needs and priorities of southern Ontario.

2. Enhancing collaboration and strengthening partnerships

FedDev Ontario is relatively small in size compared to other federal departments and agencies. Moreover, economic development is an area where there are multiple and diverse parties of interest.

Consequently, since its creation, FedDev Ontario has worked closely with other federal departments and agencies, other governments, the private sector, universities and colleges, and non-profit organizations. This collaborative approach has proven effective and is one that the Agency will need to continue to develop and strengthen over the next few years. Collaboration is especially important during a period of fiscal restraint to achieve the most value for Canadians.

Plans to meet this area of focus

• FedDev Ontario will continue to raise awareness across southern Ontario about its mandate and its suite of programming so as to establish itself as a credible and effective partner in supporting the economy of southern Ontario.
• FedDev Ontario will continue to pursue partnership and opportunities with stakeholders – other levels of government, the private sector, universities and colleges, the non-profit sector, and communities and the residents of southern Ontario.

3. Stabilizing processes and systems

During the first 18 months, FedDev Ontario introduced several new initiatives and enhancements to programs, thus creating a new environment for clients and partners. During 2011–2012, FedDev Ontario will focus on its current practices by working to stabilize processes and systems in a manner that will establish a track record of success and will continue to build the organization's reputation as competent and effective.

Plans to meet this area of focus

• Continue to build a strong governance framework across the Agency, based on internal controls and risk management.
• Continue to serve clients by deploying and leveraging effective and advanced technologies, including the deployment of a client service management system and internal mechanisms of coordination.

Risk Analysis

External Risk Analysis

A risk analysis annual exercise was conducted by FedDev Ontario externally through the Strategic Policy branch of the Agency and internally by the Audit and Evaluation branch of the Agency. There are a number of critical challenges facing the region and its industries including the ability of companies to access capital, particularly with respect to risk ventures. While identified by industry as a key challenge during the global recession, at which point the economy of southern Ontario saw a sharp contraction, a number of companies still report access to capital as a priority.

In addition, many companies in southern Ontario, a base for a significant share of Canada's manufacturers and exporters, are challenged by an operating environment that includes a relatively high Canadian dollar and slowing growth in key export markets. Border efficiency also remains a critical concern for stakeholders in the southern Ontario region, particularly for companies involved in trade activity with our largest trading partner, the United States. The uncertain operating environment is placing significant pressure on the region's export-intensive sector.

In the longer-term, a key challenge will involve managing potential skills shortages and building a workforce that can enhance the region's ability to compete in the knowledge-based economy. As the southern Ontario economy transitions to a more service-oriented economy, a skilled and available workforce will be an increasingly important driver of competitiveness. Intensifying global competition, another key challenge for the region, has been driving structural adjustments in southern Ontario. The region's industries, including its manufacturers, are re-positioning themselves to compete effectively in global markets and become more productive.

Internal Risk Analysis

The key internal factors and management challenges affecting the ability of FedDev Ontario to fulfill its mandate are linked to its stage of development as an organization, the ambitious nature of its programming and delivery, and the range and diversity of stakeholders and partners. The Agency achieved significant progress over the last eighteen months and will continue to deliver effective and efficient programs, access to outside expertise, implementing sound management control and accountability frameworks and adopting best practices in governance.

Human resource needs will continue to be framed by the many diverse skill sets and competencies that are needed to ensure that due diligence, delivery, and Official Language requirements are met. Critical to success is the attraction and retention of experienced people that collectively possess the skill sets and competencies needed to ensure that due diligence, delivery and Official Language requirements are met.

Processes which have been built, borrowed or adopted from others will need to be re-engineered, streamlined and integrated into a cohesive regime of efficient, sustainable practices, suitable to FedDev Ontario's needs and priorities. As processes stabilize and initial delivery and capacity issues are addressed, and the mandate evolves, it will become increasingly important to demonstrate the value and stewardship of Agency activities.

FedDev Ontario will respond to these risks by placing priority on strategies and learning and development priorities that allow the Agency to leverage outside expertise. FedDev Ontario has plans in place to affect an orderly transfer of third party processes and to stabilize its business processes. As further mitigation, FedDev Ontario will continue to explore more efficient delivery, stronger advocacy, enhanced research and partnering capabilities, improved measurement and reporting practices and a mature evaluation.

Expenditure Profile

FedDev Ontario's planned program spending in 2011–2012 was divided among FedDev Ontario's core programs and initiatives. The Southern Ontario Advantage (SOA) initiatives that FedDev Ontario launched in 2010–2011 include: Applied Research and Commercialization, Technology Development Program, Investing in Business Innovation, the Prosperity Advantage Initiative, the Graduate Enterprise Initiative, Scientists and Engineers in Business and Youth-STEM initiative. These initiatives are all funded under the Southern Ontario Development Program.

FedDev Ontario's Planned Spending (program and internal services) declines by $ 374 million in 2011–12 relative to 2010–11. This is mainly due to the sunsetting of Economic Action Plan (EAP) programs, such as the Community Adjustment Fund (CAF) at the end of the 2010–11 fiscal year. Though the Building Canada Fund (BCF) and the Recreational Infrastructure Canada program (RInC) programs have been extended to October 31, 2011 under the EAP, they have not been reflected in the planned spending for 2011–12.

Spending Trends ($millions)

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Estimates by Vote

Estimates by Vote are presented in the 2011–12 Main Estimates which are available here:
http://www.tbs-sct.gc.ca/est-pre/20112012/me-bpd/info/info-eng.asp.

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