ARCHIVED - Federal Economic Development Agency for Southern Ontario - Report

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Section II: Analysis of Program Activities by Strategic Outcome

Strategic Outcome

A Competitive Southern Ontario Economy

The global economic recession had a significant impact on all regions of Canada and Ontario in particular. Nonetheless, southern Ontario remains home to a number of competitive advantages, including: a well-educated and diverse population; an excellent network of higher learning institutions; a business-friendly environment; a vibrant small business community; key economic clusters; and close proximity and access to U.S. and international markets.

FedDev Ontario will build on these competitive advantages to help improve the competitiveness of the southern Ontario economy moving forward.

FedDev Ontario will focus its efforts in 2012–2013 on four program activity areas: technological innovation; business development; community economic development; and internal services. Through these program activities the Agency will continue to deliver key programs and services to individuals, businesses, communities, and other key stakeholders across southern Ontario and strengthen its profile as a viable partner in economic development.

Program Activity: Technological Innovation

Program Activity Description

This program activity is intended to support the southern Ontario economy to be more innovative by creating new products, services, processes and/or markets so as to contribute to the region's competitiveness. This will be achieved by: encouraging the region's labour force to be more innovative; focusing on key emerging sectors; and by strengthening linkages between the region's businesses (especially SMEs) and its post-secondary institutions. These are the elements necessary to improve the region's productivity, accelerate growth and maintain and enhance the region's living standards in the context of a global innovative economy. Transfer payments in support of this program are made through a variety of initiatives under the authority of the SODP through the administration of contribution agreements with businesses, not-for-profit organizations, and post-secondary institutions.

Financial Resources (millions of dollars)

2012–13	2013–14	2014–15
51.0	52.1	0.2

Human Resources (FTEs)

2012–13	2013–14	2014–15
22	22	–*

* FTE requirements for 2014–15 and beyond will be confirmed upon renewal of the Agency's core programming beyond 2013-14. (Back to reference)

Expected Results and Performance Indicators of Technological Innovation program

Program Activity Expected Results	Performance Indicators	Targets
Southern Ontario has a strong innovative economy	Increase in the number of employees in southern Ontario that are considered "highly skilled and qualified personnel" ** ♦	74,300 people
	Increase in the amount of investment in research and development by Ontario businesses	$279 million (2002 constant dollars)

** Data for this indicator is based on the nine economic regions identified by Statistics Canada that make up southern Ontario. These regions align with 37 census divisions identified as part of the Agency's mandate except that the census division of Muskoka is included in one of the nine economic regions. (Back to reference)

♦ "highly skilled and qualified personnel" is defined by Statistics Canada as "individuals with university degrees at the bachelors' level and above." (Michael McKenzie (Statistics Canada), "A Profile of Highly Qualified People," Innovation Analysis Bulletin, Vol. 9 No 2, October 9, 2007. (Back to reference)

Planning Highlights

This program activity is supported by the three sub-activities below, each of which are made up of distinct initiatives under the SODP that deliver funding through the administration of contribution agreements with businesses, not-for-profit organizations, and post-secondary institutions. Through the open intakes and initiatives detailed below as well as outreach and engagement activities, FedDev Ontario will work to secure the partnerships necessary to achieve the targets of this program activity. Proposals are evaluated based on their alignment with SOA objectives; their potential impact on communities; funds for the proposal that have been leveraged from other sources; and an assessment of risks related to the proposed project.

Science, Technology, Engineering, and Mathematics (STEM) Awareness

The Youth STEM initiative is intended to provide students (from kindergarten to grade 12) with an opportunity to learn and to get excited about STEM studies with the goal that more young people will consider pursuing greater education in this area and ultimately a career in a STEM field. FedDev Ontario will pursue projects with the broadest reach and greatest potential to promote an improved STEM knowledge-base in southern Ontario in an effort to address both current and anticipated skill shortages in STEM-related fields. Priority will also be given to projects that include student exposure to entrepreneurship in support of the continued development of highly qualified personnel and business leaders of the future.

Skills Development

The Graduate Enterprise Internship initiative provides internships with structured mentoring opportunities through outreach with post-secondary institutions to develop the business and management skills of STEM graduate students and recent graduates while enabling SMEs in southern Ontario to benefit from their technical knowledge. Priority will be given to industrial internships that can promote increased productivity while helping to meet future labour/skills shortages.

The Scientists and Engineers in Business initiative is designed to promote the next generation of entrepreneurs by investing in the ideas of graduate students and recent graduates in STEM fields of study and collaborating with them to access the support necessary to bring their innovative ideas to market. Through targeted outreach with regional innovation centres, post-secondary institutions and Community Futures Development Corporations (CFDCs), this program has been enhanced to facilitate entrepreneurship in an innovation-based economy.

Technology Development and Commercialization

Southern Ontario's continued recovery from the economic downturn also depends on the region's technological progress within the global economy. SMEs across southern Ontario need to continue to adapt and adjust by investing in technology, innovation and business strategies geared to the demands of an increasingly competitive marketplace.

Colleges and universities can also help businesses to undertake applied research, technology development, piloting, and demonstration activities that will enable them to compete in an innovative economy. In December 2011, FedDev Ontario expanded its Applied Research and Commercialization pilot initiative to continue to fund collaborative ventures that bring together and leverage the skill sets of various economic players, in order to help bring new ideas to market. The Agency's investments are leveraging private sector funding to ensure that market driven innovation is supported and will result in impacts on jobs, sales, and exports.

While the first phase of the Applied Research and Commercialization (ARC) initiative was successful in encouraging greater collaboration and partnerships between post-secondary institutions with applied research and development expertise and SMEs with pre-commercialization needs across southern Ontario, some areas in the region did not benefit from ARC funding. As part of the extension, post-secondary institutions will be encouraged to target regions of Ontario where they currently do not have SME partners.

The Technology Development Program encourages research-based organizations, the private sector, post-secondary institutions and not-for-profit organizations to work together to accelerate the development of large-scale, advanced technologies that will result in significant new market opportunities for southern Ontario businesses. Private sector funding and partnership for projects supported by this program will ensure job and market impacts in the medium to longer term. The Program will support up to six significant collaborations targeted toward the water, health, information and communication technology and environmental technology sectors.

Benefits for Canadians

Under the first phase of ARC, more than 300 SMEs benefited from a collaborative arrangement with a university or college. With more than 360,000 businesses and 35 universities and colleges, southern Ontario has a distinct advantage in leveraging local knowledge and innovative capacity and supporting economic development. FedDev Ontario recognizes the importance of developing and retaining knowledge and skills and will continue to support strategic collaborations and partnerships between economic players and post-secondary institutions in southern Ontario. Through the Technological Innovation program activity we will continue to help drive innovation, create new products and services, improve productivity, and develop new markets as we work to improve southern Ontario's productivity, accelerate growth and maintain and enhance the region's living standards in the context of a global innovation-based economy.

Priorities for 2012–2013

• Promote STEM awareness among youth and support STEM-related entrepreneurs and help develop the partnerships that will allow STEM businesses to grow and compete.
• Conduct an evaluation of the first phase of ARC to determine whether and how to best support business-led innovation within SMEs in southern Ontario.
• Support development of collaborative economic ventures, which will expand global market opportunities for southern Ontario businesses.

Program Activity: Business Development

Program Activity Descriptions

This program activity supports the 360,000 businesses (especially SMEs) in southern Ontario in their efforts to drive competitiveness by providing funding to encourage the creation of start-up companies, helping existing businesses to expand and helping companies improve their productivity. Transfer payments in support of this program are made through a variety of Southern Ontario Advantage initiatives under the authority of the SODP through the administration of contribution agreements with businesses, not-for-profit organizations, and post-secondary institutions.

Financial Resources (millions of dollars)

2012–13	2013–14	2014–15
118.5	120.9	0.4

Human Resources (FTEs)

2012–13	2013–14	2014–15
31	31	–*

* FTE requirements for 2014-15 and beyond will be confirmed upon renewal of the Agency's core programming beyond 2013-14. (Back to reference)

Expected Results and Performance Indicators of Technological Innovation program

Program Activity Expected Results	Performance Indicators	Targets
Southern Ontario businesses are able to respond to future economic challenges	Increase in business investment in machinery and equipment in Ontario	$32,157,000 (annual dollars)
	Increase in real hourly wages in southern Ontario	$0.14 (2002 constant dollars)
	Increase in labour productivity in Ontario businesses	1% (year over year growth)

Planning Highlights

Prior to the economic downturn, low productivity in southern Ontario had been masked by many of the region's competitive advantages. However, the current economic environment has highlighted the need to improve productivity and leverage the wealth of investor groups through strategic partnerships. Through the two sub-activities below, the Investing in Business Innovation and Prosperity initiatives will foster partnerships between angel investor groups and start-up businesses as well as make strategic investments with emphasis on three priority areas: productivity enhancements; regional diversification; and building a competitive advantage.

Business Investment

The Investing in Business Innovation initiative boosts angel and venture capital investment in start-up businesses and accelerates the development and commercialization of new products and ideas.

Stakeholders such as local and regional angel networks, venture capital funds and innovation centres will be engaged to generate the start-up business opportunities and capital investment required to access funding. Additional support will be provided to eight local angel networks to help them attract more members and raise investment funds for new start-up businesses, which may be matched by the Agency.

Investing in Business Innovation will also support provincial angel investor associations in their efforts to develop online investment tools and attract foreign investors as well as start-up businesses that leverage angel and venture capital investments to develop innovative technologies and products in priority sectors.

Business Productivity and Innovation

Through the Prosperity Initiative, FedDev Ontario will support businesses, not-for-profit organizations and post-secondary institutions in southern Ontario in taking on projects that will result in a more productive, diversified and competitive economy in the region. Through investment in new technologies and industries, this initiative aims to generate long-term economic and employment opportunities for highly qualified personnel in southern Ontario.

SMEs that export or are involved in exporting value chains will be supported to encourage the adoption of information systems, equipment and other technologies and processes that will improve their productivity, enhance their global competitiveness and increase market opportunities. Training support will also be provided to SMEs to increase workforce knowledge and productivity. Competitive advantages for business will be enhanced through strengthening the high performance computing, food processing, bio-product, auto innovation and other clusters in southern Ontario. Opportunities to help regions diversify their economies will be supported by attracting and strengthening new business opportunities in communities that are reliant on one sector.

Benefits for Canadians

As the initiatives under the Business Development program activity support multi-year projects, most of the projects that are underway in 2012-13 will have begun in 2011-12. The Agency will work with key sector organizations to deliver funding to, and enhance the productivity of, SMEs that are adopting new technologies aimed at improving their markets and communities. By promoting partnerships between investors and start-up businesses, the Agency is taking advantage of the entrepreneurial potential of the region and helping to establish successful and innovative businesses that are sustainable long-term. Targeted investments in clusters and businesses in innovative sectors of the economy will result in new opportunities in communities that are having the most difficulty creating jobs.

Priorities for 2012–2013

• Support businesses, not-for-profit organizations and post-secondary institutions that will generate greater productivity, economic diversification and improve the region's overall competitiveness.
• Continue to develop the strategic partnerships between investors and start-up businesses and provide matching funds towards increasing innovation, cluster enhancement and market potential while creating quality jobs in southern Ontario.
• Work with existing partners to provide increased access to capital to support late-stage commercialization in innovation- and technology-based businesses across southern Ontario.

Program Activity: Community Economic Development

Program Activity Descriptions

This program activity supports the 288 communities (small and large, rural and urban, Francophone and Aboriginal) in southern Ontario that are home to 12.4 million residents. These communities are key to enhancing southern Ontario's economic competitiveness and the long-term prosperity of the region. Southern Ontario depends on communities that can attract the best talent and compete for investment as dynamic centres of commerce and learning. Strong communities contribute to a prosperous southern Ontario. Through this program activity, the Agency will continue to support communities and regions throughout southern Ontario to identify local solutions to local challenges and opportunities. Strong, safe and modern communities are essential building blocks for the region's competitiveness and long-term prosperity.

FedDev Ontario will continue to work with others, including Infrastructure Canada, the province of Ontario and communities, to support the infrastructure needs within southern Ontario. Transfer payments in support of this program are made through a variety of initiatives under the authority of the Community Futures Program, the Economic Development Initiative, the Eastern Ontario Development Program and infrastructure programming like the Building Canada Fund. The Agency will support this program activity through the administration of contribution agreements with businesses, not-for-profit organizations, post-secondary institutions and municipalities.

Financial Resources (millions of dollars)

2012–13	2013–14	2014–15
34.5	30.5	13.3

Human Resources (FTEs)

2012–13	2013–14	2014–15
38	38	–*

* FTE requirements for 2014-15 and beyond will be confirmed upon renewal of the Agency's core programming beyond 2013-14. (Back to reference)

Expected Results and Performance Indicators of Community Economic Development program

Program Activity Expected Results	Performance Indicators	Targets
Southern Ontario communities have strong economies able to sustain long-term economic development and growth	Number of business in southern Ontario communities that are in "growing" industries♦♦	195,000
	Increase in the southern Ontario employment rate**	0.2%

♦♦"Growing" industries refers to: aerospace, finance and insurance, information and
communication technologies (ICT), pharmaceuticals, and professional services. (Back to reference)

** Data for this indicator is based on nine economic regions identified by Statistics Canada that make up southern Ontario. These regions align with 37 census divisions identified as part of the Agency's mandate except that the census division of Muskoka is included in one of the nine economic regions. (Back to reference)

Planning Highlights

Collaboration and partnerships are an essential element of this program activity and have been central to the innovative programming below. This programming will target communities experiencing long-term economic challenges and help them to implement new opportunities to create jobs and growth while also supporting the continued delivery of infrastructure programming on behalf of Infrastructure Canada. Support for this program activity's expected results are further detailed in the following four sub-activities.

Community Futures Program

The continued economic uncertainty has had a significant impact on all communities, but rural communities (especially manufacturing-dependent communities) have been particularly affected. Rural southern Ontario continues to face persistent challenges: limited sources of funding for small and medium enterprises consistently lower economic performance; a declining number of available jobs; an aging workforce; and youth out-migration. Research indicates that a region's prosperity is intricately linked to the economic well-being of rural communities, and the Community Futures Program supports strong rural communities.

The Community Futures Program is a national program that provides funding to Community Futures Development Corporations (CFDCs). This funding helps rural communities develop their local economy and long-term sustainability along four business lines: strategic community planning and priorities; community economic development projects; business services; and business loans to SMEs.

To support programming excellence the Community Futures Program is being enhanced to require all 37 CFDC organizations to adopt performance-based funding. Key performance indicators have been developed in cooperation with the CFDCs and will be used to reward measurable results and give individual CFDCs the incentive to maximize operational effectiveness. This will help to ensure support is targeted at organizations that demonstrate excellence in program delivery and provide the greatest results for their clients. Support will be provided as required to help the CFDCs adopt this new approach and further enhance their performance.

Eastern Ontario Development Program

The economic challenges facing rural eastern Ontario have been heightened in recent years by the impact of the global recession and the ongoing structural changes in the manufacturing sector. Facing new economic realities, the region is continuing to undergo adjustments, restructuring, and related challenges. The EODP helps rural eastern Ontario communities address economic challenges and creates new opportunities in the region.

Renewed in 2011 for three years, the EODP is a targeted economic development initiative aimed at addressing economic challenges in eastern Ontario and creating innovative opportunities. The EODP will lead to a diversified and competitive eastern Ontario economy and contribute to the successful development of businesses and prosperous communities. Program contributions are available to support projects in two key areas: business development and community innovation.

Business development supports projects that will lead to the growth of new and existing businesses within rural eastern Ontario communities. This includes initiatives in areas such as skills development, youth attraction, innovation, and the adoption of information and communications technologies.

Community innovation enables community-led economic development activities that enhance and diversify local economies. This includes projects identified within existing community plans that build on the existing competitive economic advantages to establish or strengthen key economic sectors and retain and expand existing businesses.

Official Language Minority Communities

Francophone communities in southern Ontario are an important component of the region's rich diversity and its economy. As part of the Government of Canada's overall commitment to enhance the vitality of English and French minority communities across Canada, FedDev Ontario will continue to support official language minority communities in southern Ontario through all of its programming, but especially through the Economic Development Initiative (EDI). With respect to EDI, FedDev Ontario will target its efforts in three key areas: support Francophone youth to work in their home communities; provide tailored business counselling to Francophone businesses (especially in the large urban centres); and provide micro loans to Francophone businesses.

The EDI is part of the "Roadmap for Canada's Linguistic Duality 2008–2013: Acting for the Future," the Government of Canada's strategy for official languages.

Infrastructure Delivery

Strong, safe and modern communities are essential building blocks for Canada's competitiveness and long-term prosperity.

In 2012–2013, FedDev Ontario will continue to strengthen key partnerships with other federal departments and will work closely with the provincial government, municipalities, First Nations and other stakeholders to support investments in public infrastructure priorities across all of Ontario.

The Agency will deliver key programs in 2012-13 including the Building Canada Fund – Communities Component (BCF-CC), Canada Ontario Municipal Rural Infrastructure Fund (COMRIF), and the Municipal Rural Infrastructure Fund (MRIF) Top-up. In addition, the Agency will wind down programs that have sunset such as the Canada-Ontario Infrastructure Program (COIP) and economic stimulus programs such as the Recreational Infrastructure Canada Program (RInC) and the Building Canada Fund – Communities Component Top-up (BCF-CC Top-up).

Benefits for Canadians

Canada is defined by the richness and diversity of its regions. As the country's most populous region, southern Ontario faces unique challenges and opportunities that require regionally-based solutions. The programs within this program activity will target specific communities in distinct areas of southern Ontario that require assistance in developing their local economies to support their long-term sustainability. These targeted economic development initiatives will be supported by the modernization of infrastructure through programming delivered across Ontario in an effort to increase the productivity and competitiveness of businesses in rural, northern, eastern, First Nations and Francophone communities.

Priorities for 2012–2013

• Work with local stakeholders to determine the economic challenges and opportunities that exist within communities/sub-regions throughout southern Ontario. This is especially true through the collaborative projects' component of the Eastern Ontario Development Program.
• Continue to implement program innovations such as the performance-based funding agreements within the Community Futures Program
• Deliver on the Government of Canada's commitment to enhance the vitality of official language minority communities.
• Administer infrastructure programming across Ontario on behalf of Infrastructure Canada and wind down administration of programs that have sunset.

Program Activity: Internal Services

Program Activity Descriptions

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

Financial Resources (millions of dollars)

2012–13	2013–14	2014–15
14.8	14.8	1.5

Human Resources (FTEs)

2012–13	2013–14	2014–15
125	125	–*

* FTE requirements for 2014–15 and beyond will be confirmed upon renewal of the Agency's core programming beyond 2013-14. (Back to reference)

Planning Highlights

As FedDev Ontario focuses on delivering results in support of its strategic outcome, it will continue building positive awareness and a strong profile of the Agency throughout southern Ontario. The Agency will ensure it is visible, accessible and accountable to the public it serves and that the responsible use of public funds is communicated to obtain maximum value for taxpayer investments.

Over its first two years, FedDev Ontario has worked to stabilize its internal service capacity. Moving forward, the Agency is committed to optimizing its internal processes and systems and will look to adopt a more risk-based approach to service delivery to allow for a more strategic use of resources.

This approach to internal service delivery in 2012-13 will include building on existing planning and reporting processes, advancing human resource strategies and expanding audit and evaluation efforts. The Agency will continue to explore and employ specific best practices and expertise from other government departments and agencies and the private sector to improve and streamline its internal service functions while also implementing key Government of Canada internal service renewal initiatives. The implementation of a client service management system will be a key component to assist stakeholder relations to ensure that information and correspondences remain current and accessible across the Agency.

FedDev Ontario will also leverage its recent reorganization to strengthen its capacity for policy development, performance management and stakeholder relations both in 2012-13 and beyond.

Together, these activities will contribute to improvements in overall internal service delivery and ultimately contribute to effective and efficient results for Canadians.

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