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Minister’s Message

As Minister of the Canadian Northern Economic Development Agency (CanNor), I am pleased to present to Parliament and to Canadians our 2012-2013 Report on Plans and Priorities (RPP).

CanNor continues to fulfill an important element of Canada's Northern Strategy to improve the quality of life experienced by Northerners. The work that the Agency has been doing since its creation in 2009 has helped to strengthen and diversify the economies in Nunavut, the Northwest Territories and Yukon. Dynamic and sustainable economies in the three territories benefit Northerners and contribute to prosperity for all Canadians.

Fiscal year 2012-2013 marks the Agency's third full year of operation. Much has been accomplished since the Agency was created in 2009. As a new organization, CanNor continues to solidify its operational foundations to effectively and efficiently serve its clients and fulfill its mandate. The Agency has delivered on key commitments under Canada's Economic Action Plan to create jobs and growth in sectors including mining, tourism, arts and culture, infrastructure, energy and capacity building. In the coming year, CanNor will continue to work with territorial governments, Aboriginal groups, and business and community partners to foster ongoing economic development and leverage investments in the North.

With significant ongoing activity in the resource development sector, the work of the Northern Projects Management Office (NPMO) to support industry by improving the transparency, timeliness and predictability of regulatory processes will be a priority in fiscal year 2012-2013. Other priorities include the delivery of the Agency's core programs: Strategic Investments in Northern Economic Development (SINED); Aboriginal business and economic development programs; as well as the newly established Northern Adult Basic Education Program (NABEP). NABEP will provide working-age Northerners with increased opportunities to improve their education, enabling them to benefit from the tremendous range of economic opportunities that the North has to offer. The Agency is now responsible for the Canada Business Network (CBN) in the North. The CBN offers a single window of service for businesses in the North, improves the business climate, provides opportunities for Northerners, and ultimately helps unlock the North's vast potential. This change is a concrete step in consolidating economic development services in the North under one federal Agency, and ensures that CanNor is well positioned to champion the interests of Northerners.

In the year ahead, CanNor will focus on strengthening and diversifying the economy in each territory; ensuring that Northerners benefit from the tremendous economic opportunities in the North; and aligning the efforts of all partners to leverage investments that will contribute to Canada's ongoing prosperity.

Section I: Organizational Overview

Raison d’être

Responsibilities

CanNor is Canada's first stand-alone agency dedicated to northern economic development. The Agency has its headquarters, and a regional office, located in Iqaluit, Nunavut, with additional regional offices in Yellowknife, Northwest Territories, and Whitehorse, Yukon. CanNor also has a liaison office located in Ottawa. One of CanNor's key functions is the work of the Northern Projects Management Office (NPMO). The NPMO's main office is located in Yellowknife, NWT, with regional representation in the other two territories.

CanNor operates as an independent federal department under Schedule I.1 of the Financial Administration Act. The Agency is headed by a President and reports to Parliament through its own Minister.

The Agency's suite of contribution programs includes the Strategic Investments in Northern Economic Development (SINED) program, Aboriginal economic development programs, and economic development funding for official language minority communities.

SINED is CanNor's largest economic development contribution program. It focuses on strengthening key sectors of the territorial economies, promoting economic diversification and encouraging northerners' participation in the economy. Funds flow through SINED funding pools: the Targeted Investment Program, the Innovation and Knowledge Fund, the Partnership and Advisory Forums and a Pan-Territorial Fund for projects impacting more than one territory.

CanNor also delivers Aboriginal economic development programs in the North that support business development and community economic development. The business development funding is provided to support the establishment and growth of Aboriginal businesses. The community economic development funding supports community economic development planning and capacity building, including support for the implementation of national and regional plans to increase the economic capacity of community organizations. The programs also provide opportunity-based economic development financial support for Aboriginal communities.

In 2011-12 CanNor developed and began delivery of a new program, the Northern Adult Basic Education Program (NABEP). The Agency works closely with Human Resources and Skills Development Canada (HRSDC) on initiatives that target workplace skills needed for the growing northern economy. CanNor is the host department for the Regional Federal Councils in the territories, and is the federal managing partner for the three territorial Canada Business Service centers which form part of the Canada Business Network.

The NPMO is a fundamental element of CanNor's mandate. As part of the Government's Action Plan on Regulatory Reform, NPMO's work includes coordinating federal regulators, tracking projects, and providing path-finding guidance to industry. In addition, NPMO holds the official record of Aboriginal Crown consultation for northern resource development and regional infrastructure projects, and works with other federal government departments and agencies to coordinate Crown consultation.

Using a single-window, customer-oriented approach, NPMO works with project proponents, federal departments, regional regulators, and other authorities to address any process bottlenecks and improve the timeliness, predictability and transparency of federal regulatory participation in the North. Its work supports economic drivers in the territories by creating more certainty for industry and helping to ensure environmental assessments and permits proceed smoothly on northern projects.

CanNor has a unique viewpoint on the North through its many partnerships and networks, its established presence in each territory, and broad perspective on the economic challenges and opportunities. CanNor's ability to bring together diverse interests to help set the course for northern economic development is rooted in its work with federal departments and agencies, territorial governments, community organizations, industry associations, Aboriginal groups and governments, and businesses operating in the North. Through its policy and research work and its relationships and networks, the Agency is in a position to help set the direction on northern economic development. It does this by promoting a shared approach to addressing economic opportunities and challenges in the North, where partners work together to align their efforts to a common goal of maximizing the economic potential of the North to the benefit of Northerners and all Canadians.

Strategic Outcome and Program Activity Architecture

CanNor's strategic outcome is: Developed and diversified territorial economies that support prosperity for all Northerners. The Program Activity Architecture (PAA) provided below is designed to support the achievement of this outcome. This PAA reflects the current programs and activities of CanNor, but may change over time to accommodate evolution in the Agency's roles, responsibilities, programs and activities.

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Organizational Priorities

While the organizational priorities have been identified as those to which CanNor has previously committed, they have been updated to put greater emphasis on certain aspects than was previously the case. This takes into account opportunities and challenges both within CanNor, as well as the broader external environment and context.

Priority	Type1	Strategic Outcome
Effective financial management	Previously committed to	Developed and diversified territorial economies that support prosperity for all Northerners
Description
Why is this a priority? Effective financial management will: ensure that CanNor operates in an effective and efficient manner; enable the Agency to align resources with priorities; and ensure that processes are in place to control and monitor financial activities. Plans for meeting the priority The Agency will: continue to develop and implement CanNor's financial management framework, with a focus on forecasting and aligning resources with priorities; design and implement effective business processes and governance that include effective control and monitoring for financial management; and ensure that staff members are trained on financial systems and processes.

Priority	Type	Strategic Outcome
Excellence in people management	Previously committed to	Developed and diversified territorial economies that support prosperity for all Northerners
Description
Why is this a priority? The Agency's ability to advance economic development in the North is supported by the collective efforts of its employees. A workforce and workplace of excellence are the foundation for those efforts. Excellence in people management will: ensure the health and well-being of employees; advance an organizational culture of mutual support, teamwork, integrity, respect, and trust; foster employee engagement; and promote high quality service to clients. Plans for meeting the priority The Agency will: promote a culture of excellence using the Public Service Employee Survey results to guide the collective efforts of management and employees; update its human resources strategy in line with the renewal of the Public Service, including engaging staff in assessing current capacity, requirements and gaps, staffing strategies, and training requirements; develop innovative recruitment strategies to target Northerners, with a focus on Aboriginal people; ensure clear and timely performance management agreements linked to the Agency's priorities for all executives; and require the completion of employee performance management forms and learning plans for all staff.

Priority	Type	Strategic Outcome
Advance performance measurement and its application to CanNor's activities:	Previously committed to	Developed and diversified territorial economies that support prosperity for all Northerners
Description
Why is this a priority? Performance measurement is instrumental in terms of: positioning the Agency to manage for results and articulate the performance of its activities and efforts; and gauging the Agency's success and impact on developing and diversifying the territorial economies to inform shifts in organizational and program directions and priorities. Plans for meeting the priority CanNor will: implement data collection strategy that will inform all aspects of CanNor's operations and be used to support organizational and program decision-making and results based management; and introduce a performance reporting process to track progress against established performance targets that ensure that CanNor's activities are achieving positive outcomes for Northerners, particularly Aboriginal people, and Canada's economy.

Priority	Type	Strategic Outcome
Strengthening the northern economy, including focusing on key relationships	Previously committed to	Developed and diversified territorial economies that support prosperity for all Northerners
Description
Why is this a priority? Performance measurement is instrumental in terms of: Strengthening the northern economy is the Agency's raison d'être. All of the Agency's functions and work contribute to advancing this goal. CanNor's success flows from its ability to build partnerships and coordinate and align action across stakeholders including federal departments, territorial governments, Aboriginal people, and the private sector. Plans for meeting the priority CanNor will: continuously refine and improve business processes, program and service delivery; foster communication, engagement and strong working relationships with partners and stakeholders; collaborate with key northern and federal government partners to align efforts and capacity, including leveraging financial investments, to achieve positive economic outcomes for Northerners and Canada's economy; advance fact-based decision-making and policy development using economic research, with a particular focus on advancing an economic development strategy for the North.

Priority	Type	Strategic Outcome
Advancing major project development in the North	Previously committed to	Developed and diversified territorial economies that support prosperity for all Northerners
Description
Why is this a priority? Major project developments are a key driver to the overall economic development of Canada's North. Regulatory streamlining and simplification are key priorities for the Government of Canada, particularly in relation to major projects. Regulatory coordination and single window service to industry is critical to improving the investment and business climate for northern projects. Plans for meeting the priority CanNor will: work with federal regulatory departments, northern environmental assessment and permitting boards, and private sector project proponents, to facilitate and co-ordinate the efficient regulatory review of northern project proposals; and advance prosperity for Northerners by aligning efforts with respect to major project developments with the broader economic strategy for the North.

Risk Analysis

Business development in the North needs to deal with the exigencies of the climate, remote communities, sparse population, dependence on natural resource extraction and associated challenges, such as underdeveloped infrastructure and labour market gaps. Program delivery in the North therefore requires a strong focus on risk management and mitigation.

CanNor has identified six key risk areas:

1. operational environment;
2. human and knowledge capital;
3. alignment with priorities and needs;
4. relationships with clients, partners and stakeholders;
5. public communications; and
6. legal, statutory and land claims.

Operational Environment: The North's tremendous economic potential is coupled with enormous challenges in the delivery of economic development programming and regulatory coordination in the Arctic. Even the larger communities in the three territories are far from markets, and economic and municipal infrastructure can be limited. Logistics are challenging in the North and the cost of doing business is very high. CanNor itself needs to manage operational costs related to maintaining offices in the North. At the same time, as a new organization, CanNor must develop the suite of tools, practices, policies and procedures required to operate effectively and efficiently as a federal government department. To manage this risk, CanNor undertakes research and engagement to foster its in-depth understanding of the changing northern context. Internally, it also applies a northern lens to its operational and business planning and people management. This includes human resource planning that focuses on northern based hiring and employee development, financial planning for costs that are northern specific such as travel, and efforts to maximize the use of technology to close the distances between CanNor's offices.

Human and Knowledge Capital: CanNor must manage the risks associated with maintaining a sufficient and representative workforce with the appropriate skill mix, as well as timely access to complete and appropriate information for effective operations and decision-making. To manage recruitment and retention of skilled staff in the small northern labour market, CanNor uses multiple staffing strategies with an emphasis on the long-term development of its own permanent staff.

Alignment with Priorities and Needs: As a new organization in a specialized environment, CanNor has to give careful consideration to its organizational alignment of activities, priorities and financial resources to meet service expectations or organizational priorities. Risks relate to ensuring that scarce resources are allocated to priority activities. Mitigation tools include CanNor's Program Activity Architecture (which clearly identifies the Agency's business lines) and business planning. CanNor is implementing standardized business processes and continuing to build its policy and economic research functions to inform the Agency's goals and priorities.

Relationships with Clients, Partners and Stakeholders: Most of CanNor's activities involve some element of partnership or collaboration, making it critical that the Agency build strong relationships with other key players who advance economic development. CanNor has worked with partners across all three territories to inform how it invests its contribution programs funding. CanNor has established a model for collaboration with federal departments, such as Human Resources and Skills Development Canada, through memoranda of understanding. The Northern Projects Management Office is developing a variety of tools to be used to coordinate federal regulatory activities relating to major development projects in the North. These are examples of the Agency's important role as a convenor of diverse interests that identifies cross cutting problems and advances solutions.

Public Communications: In support of its mandate, CanNor must: effectively communicate its role and activities as part of the Government's Northern Strategy, provide information on program delivery successes; engage the public, partners and stakeholders; and deliver consistent messages about the Agency so that Canadians understand its role and functions and how it does and can serve them. Ineffective communications could ultimately hamper its ability to advance its mandate. To manage public communications, CanNor employs a suite of tools, including communications plans, engagement activities and standard business practices for announcements, media relations, and outreach.

Legal, Statutory and Land Claims: A number of policies and legislative requirements set the context for CanNor's operations. CanNor must also adhere to the terms of Aboriginal land claim and self-government agreements in the North. These agreements also influence the regulatory environment in which the Northern Projects Management Office must operate. To align with statutory and other legal requirements, CanNor is designing its own internal practices and models for business delivery and integrating legal risk management into its various activities. CanNor is striving to reflect in these practices the role played by comprehensive land claims and Aboriginal self-government agreements in the North.

Planning Summary

Financial Resources (in thousands of dollars)

2012-13	2013-14	2014-15
* Planned resources in 2014-2015 are lower due to the Strategic Investments in Northern Economic Development program sunsetting.
$51,151	$51,051	$31,198*

Human Resources (FTEs)

2012-13	2013-14	2014-15
* Planned resources in 2014-2015 are lower due to the Strategic Investments in Northern Economic Development program sunsetting.
78	78	69*

Strategic Outcome: Developed and diversified territorial economies that support prosperity for all Northerners

Performance Indicators	Targets
Economic Development Stakeholder / partner / client satisfaction Total CanNor annual funding plus amount of funding leveraged	In fiscal year 2012-2013, obtain and post on the Agency's Web Site, feedback from stakeholders, partners, and clients regarding their level of satisfaction 175% of funding leveraged. (Dollars invested in projects other than CanNor vs total annual funds distributed by CanNor)
Diversification Distribution of CanNor investments and projects by economic sector	80 % compliance with the SINED Investment Plans
Increased Prosperity Change in median income in the North	Annual increase in median income in the North
Effective Program Implementation Gross Domestic Product of the North	Annual increase in GDP in the North.

Planning Summary Table
CanNor has adjusted financial and human resources across Program Activities in order to
more accurately reflect the Agency's actual expenditure plan.
(in thousands of dollars)

Program Activity	Forecast Spending 2011-12	Planned Spending			Alignment to Government of Canada Outcomes
		2012-13	2013-14	2014-15
* Planned spending in 2014-2015 is lower due to the Strategic Investments in Northern Economic Development program sunsetting.
Business Development	$23,030	$23,030	$23,030	$3,748*	Strong economic growth
Community Development	$14,425	$18,520	$18,420	$18,420	Strong economic growth
Policy Advocacy and Co-ordination	$1,733	$1,751	$1,751	$1,751	Strong economic growth
Total Planned Spending		$43,301	$43,201	$23,919*

Planning Summary Table
(in thousands of dollars)

Program Activity	Forecast Spending 2011-12	Planned Spending			Alignment to Government of Canada Outcomes
		2012-13	2013-14	2014-15
Internal Services	$9,839	$7,850	$7,850	$7,279	N/A
Total Planned Spending		$7,850	$7,850	$7,279

Expenditure Profile

The following figure illustrates CanNor's spending trend from 2011–2012 to 2014–2015. Spending allocated from Canada's Economic Action Plan (CEAP) is reflected in the total spending but also shown separately. While the Community Adjustment Fund and the Recreational Infrastructure Canada Program sunsetted at the end of 2010-2011, the Strategic Investments in Northern Economic Development Program and CanNor's base funding also form part of CEAP and will continue to fiscal year 2013–2014. New funding for the Northern Adult Basic Education Program (NABEP) started in the latter part of 2011-2012 and continues until March 31, 2016.

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Estimates by Vote

For information on our organizational appropriations, please see the 2012-13 Main Estimates publication.

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