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1.  Section I – Overview

1.1  Minister’s Message

 

Image: The Honourable Peter MacKay, Minister of National Defence and the Atlantic Canada Opportunities AgencyAs Minister of the Atlantic Canada Opportunities Agency, I am pleased to present the Agency’s Departmental Performance Report (DPR) for 2006-2007.

The goal of our government, and my goal as Minister of ACOA, is to ensure that Atlantic Canadian communities and businesses continue to grow and evolve in the best possible environment – one that supports and encourages innovation and allows Atlantic Canadians to reach their full potential. This means investing in R&D that will lead to the commercialization of innovative technologies that contribute to and enhance the competitive strength of the Atlantic Canadian economy. It means increasing trade and export opportunities and attracting foreign investment. It means having infrastructure that will spur new businesses, attract new talent, and retain our young people by putting their skills to good use.

ACOA plays a central role in helping the federal government deliver on its commitments in Atlantic Canada. The Agency continues to successfully tackle the economic development issues facing the Atlantic region, just as it has done since its establishment 20 years ago.

ACOA has always been a flexible and responsive organization. It has always been ready to undertake research on critical issues, work with a wide range of partners, and develop targeted strategies to help the region bridge economic gaps, identify opportunities, and build capacity where little or none existed before. It has been, and will remain, a strong advocate for Atlantic Canada with key decision makers in the region and in Ottawa.

As this 2006-2007 DPR shows, activities and initiatives undertaken by ACOA have contributed to the growth and prosperity of Atlantic Canada. Infrastructure investments are building stronger and healthier communities. Investments in small and medium-sized enterprises are helping to improve business skills, increase productivity and create jobs. And, ACOA’s policy, advocacy and co-ordination role ensures that government initiatives respond to our region’s needs.

In the coming year, the Agency will pursue an ambitious, focused agenda that fosters productivity, competitiveness and growth in Atlantic Canada’s economy. ACOA will align its efforts with federal government priorities, and will focus on activities that will strengthen the region’s economic advantage. Key priorities will include the Atlantic Gateway, science and technology initiatives with a focus on commercialization, and enhanced trade and investment measures that will move toward capturing new opportunities in Asia and the Americas. Within this framework, the Agency will place emphasis on strategic sectors for Atlantic Canada that are knowledge‑intensive, as well as strengthening existing industries.

The Agency will continue to advance the region’s interests on the national and international stages. It will work to improve the standard of living of Atlantic Canadian communities and the competitiveness of small and medium-sized enterprises. By working closely with its partners, ACOA will continue to help build an Atlantic Canada that is recognized as one of the best places in which to work and live.

 

____________________________________
The Honourable Peter G. MacKay
Minister of National Defence and Minister of
the Atlantic Canada Opportunities Agency

 

1.2  Management Representation Statement

 

I submit, for tabling in Parliament, the 2006‑2007 Departmental Performance Report (DPR) for the Atlantic Canada Opportunities Agency (ACOA).

This document has been prepared based on the reporting principles contained in the Guide for the Preparation of Part III of the 2006‑2007 Estimates: Reports on Plans and Priorities and Departmental Performance Reports.

•          It adheres to the specific reporting requirements outlined in the Treasury Board of Canada Secretariat’s guidance.

•          It is based on ACOA’s Strategic Outcomes and Program Activity Architecture that were approved by the Treasury Board of Canada.

•          It presents consistent, comprehensive, balanced and reliable information.

•          It provides a basis of accountability for the results achieved with the resources and authorities entrusted to the Agency.

•          It reports finances based on approved numbers from the Estimates and the Public Accounts of Canada.

 

____________________________________
Monique Collette, President
Atlantic Canada Opportunities Agency

 

 

1.3  Summary Information

1.3.1  Raison d’tre

The Atlantic Canada Opportunities Agency (ACOA) works in partnership with Atlantic Canadians to improve the economy of the region through the successful development of business and job opportunities, and thus pursues its mandate “… to increase opportunity for economic development in Atlantic Canada and, more particularly, to enhance the growth of earned incomes and employment opportunities in that region.”
(Part I of the Government Organization Act, Atlantic Canada 1987, R.S., c G-5-7, otherwise known as the Atlantic Canada Opportunities Agency Act.)

In order to effectively pursue its mandate, the Agency has identified three strategic outcomes that reflect its mission and the benefits it strives to provide to Atlantic Canadians. These outcomes are:

Enterprise Development – improved growth and competitiveness of Atlantic small and medium‑sized enterprises (SMEs), leading to increased productivity, earned incomes and job creation.

Community Development – improved community economic infrastructure and strategic planning capacity, leading to improved employment opportunities and economic growth in the Atlantic region.

Policy, Advocacy and Co‑ordination – strategic, researched policy positions that reflect the region’s potential, ensuring regional influence on national policies and programs that affect Atlantic Canadian development and interests, and facilitating the co‑ordination of other federal policies and programs within the region to form integrated approaches to development, leading to strengthened Atlantic economic development.

 

1.3.2  Financial and Human Resources


Financial Resources1 ($ millions)

 

Human Resources (Full-time Equivalents)

Planned Spending

Total Authorities

Actual Spending

 

Planned

Actual

Difference

380.4

391.6

385.3

 

612

700

(88)

 

1.3.3  Status of Agency Performance for 2006-2007


Status of Performance Spending
($ millions)
Planned Actual

Strategic Outcome:  Enterprise Development

282.4

227.5

Priority:  (ongoing)
Client approach to enterprise development in collaboration with partners

Program Activity – Expected Results
Fostering SME development and regional economic capacity building
-         Improved growth and competitiveness of Atlantic SMEs

Priority Performance Status: 
Successfully met

Priority:  (ongoing)
Proactive support to innovation

Program Activity – Expected Results
Fostering SME development and regional economic capacity building
-         Improved growth and competitiveness of Atlantic SMEs

Priority Performance Status: 
Exceeded expectations

Priority:  (ongoing)
Evaluate priorities on an ongoing basis to provide best possible support to clients

Program Activity – Expected Results
Fostering SME development and regional economic capacity building
-         Improved growth and competitiveness of Atlantic SMEs

Priority Performance Status: 
Successfully met

Strategic Outcome:  Community Development

81.2

146.4

Priority:  (ongoing)
Holistic approach to community development

Program Activity – Expected Results
Community Economic Development
-         Enhanced business and economic opportunities for Atlantic Canadian communities

Priority Performance Status: 
Successfully met

Priority:  (ongoing)
Facilitation of partner collaboration

Program Activity – Expected Results
Community Economic Development
-         Enhanced business and economic opportunities for Atlantic Canadian communities

Priority Performance Status: 
Successfully met

Priority:  (ongoing)
Capacity building

Program Activity – Expected Results
Community Economic Development
-         Enhanced business and economic opportunities for Atlantic Canadian communities

Priority Performance Status: 
Successfully met

Priority:  (ongoing)
Adjustment initiatives

Program Activity – Expected Results
Special Adjustment Measures
-          Partner with communities to manage and mitigate economic crises

Priority Performance Status: 
Successfully met

Strategic Outcome:  Policy, Advocacy and Co‑ordination

16.8

11.4

Priority:  (ongoing)
A strong policy and advocacy role

Program Activity – Expected Results
Policy
-         Increase internal and external capacity to identify and explore issues critical to the development of policies and design and improvement of programs

Priority Performance Status: 
Successfully met

Priority:  (ongoing)
A strong policy and advocacy role

Program Activity – Expected Results
Advocacy
-         Effective defence and promotion of Atlantic Canada’s interests

Priority Performance Status: 
Successfully met

Priority:  (ongoing)
Co-ordinated engagement strategy

Program Activity – Expected Results
Co-ordination
-          Co‑ordination of activities among ACOA, federal departments and provincial governments in Atlantic Canada

Priority Performance Status: 
Successfully met


1.4 Summary of Performance

1.4.1  Operating Environment

ACOA’s Mandate

In 2007, ACOA marks 20 years of service to Atlantic Canadians. Established in 1987, the Agency is the arm of the federal government whose mission is to work in partnership with Atlantic Canadians to improve the economy of the region through the successful development of business and job opportunities.

ACOA’s mandate is derived from Part I of the Government Organization Act, Atlantic Canada 1987, R.S., c G‑5‑7, otherwise known as the Atlantic Canada Opportunities Agency Act. Its purpose is to “increase opportunity for economic development in Atlantic Canada and, more particularly, to enhance the growth of earned incomes and employment opportunities in that region.”

Although the Agency’s program tools and policies have changed over the past 20 years, the overall goal of ACOA has always been to help the Atlantic region realize its full potential in terms of productivity, economic growth and standard of living.

The Government of Canada is committed to ensuring that Canadians in all parts of the country benefit from a strong economy and the services that such an economy can provide. ACOA tackles economic development challenges facing Atlantic Canada by identifying and addressing structural weaknesses in the economy, helping communities and businesses overcome barriers, and finding new opportunities for growth. It is also within this context that ACOA is committed to helping the region evolve into a more innovative, productive and competitive economy. By making effective investments and helping foster favourable conditions for economic growth, ACOA can encourage prosperity through the creation of new opportunities in Atlantic Canada.

ACOA’s Approach

The Agency takes a proactive approach to identifying opportunities and overcoming regional barriers to growth, recognizing that an economy must have a number of conditions in place in order to succeed.

Working with partners in all levels of government, the private sector, academia and non‑governmental organizations, ACOA seeks to advance economic opportunities and innovation in order to serve the needs of businesses, organizations, individuals and communities in Atlantic Canada.

At the national level, the Agency carries out this mandate by advocating for Atlantic Canada’s interests, priorities and concerns in federal government policy‑making decisions and investments that have a direct impact on the region’s economy.

The Agency also participates in a number of federal government horizontal initiatives, acting as the lead department for the Atlantic Canada Tourism Partnership, Team Canada Atlantic, and the International Business Development Program.

At the regional level, ACOA conducts policy research and analysis that helps provide the intellectual foundation for a comprehensive and strategic approach to regional development. Furthermore, the Agency plays a key role in co‑ordinating pan‑Atlantic development strategies, programs and initiatives, working closely with the provincial governments, Atlantic universities and research institutes, business organizations, other federal departments, and other stakeholders in the region to reduce duplication and maximize impact.

Locally, the Agency works with its partners to provide communities with the tools and resources they need to build more self‑reliant local economies. Partnerships are a major element, not only in the delivery of programs and activities, but also in the development of programs and policies. ACOA partners with the private sector, universities, non‑government organizations, as well as governments at all levels.

ACOA also works locally to improve the growth and competitiveness of enterprises. The Agency ensures that a wide variety of business development tools and resources are available to Atlantic Canadian entrepreneurs throughout all stages of the business life cycle – from the time they are thinking about setting up a new business, to the time they are planning for growth and expansion.2

ACOA’s programs are strategically important. Recognizing the correlation between innovation and productivity, Agency programs place emphasis on fostering research and development, technology adoption, skills development, and improved access to capital, which are all required to make these kinds of investments in innovation possible. The Agency’s Atlantic Innovation Fund (AIF) continues to be a driving force behind the latest acceleration of research and development in Atlantic Canada. In 2006-2007, ACOA provided over $77 million in AIF assistance to research and development projects, leveraging an additional $138 million in innovation investments in Atlantic Canada.

ACOA recognizes the correlation between stimulating the growth of entrepreneurship and economic development, as illustrated by the fact that in the 1990s, 70% of the jobs created by new firms in Atlantic Canada were attributed to small businesses.3 The Business Development Program and other ACOA programs are helping entrepreneurs to start up and expand businesses, optimize trade and export opportunities, develop new tourism products, and improve business management practices to grow and compete in the global economy.

Atlantic Canada’s Challenges, Risks and Opportunities, and ACOA’s Response4

ACOA operates within the changing economic landscape of Atlantic Canada. The Agency’s broad-based approach to economic development addresses the underlying structural challenges in the economy. Being proactive in identifying opportunities requires the Agency to assess external economic factors that can affect the delivery of its programs and services.

Since 2001, growth in Atlantic Canada’s economy has averaged 2.6% per year, slightly above the national rate of expansion of 2.5%. Economic growth in the region during this period was driven mainly by increased investment in infrastructure, mineral and offshore oil and gas projects, and the development of the information technology and call centre industries. While resource‑based industries now account for only 16% of economic output in the region, they remain important to the region’s development. Growing sectors such as aquaculture, bioscience, and aerospace and defence also present considerable opportunities for future development. The region’s economy and labour market are becoming increasingly knowledge‑based, with most of the growth in employment occurring among those who have a post‑secondary diploma or degree.

Despite the recent performance of the Atlantic economy, challenges remain. The considerable rise in the Canadian dollar and high energy prices are factors that affect the global competitiveness of the region’s firms. Research and development spending and technology adoption, key factors for improving innovation and addressing the region’s low levels of productivity, remain below the national average. Atlantic Canada remains one of Canada’s most rural regions, characterized by declining population levels and a lack of employment opportunities. A high level of out‑migration from the region, along with a low birth rate and immigration levels, remain concerns regarding the future supply of a skilled labour force.

Providing opportunities for the region’s businesses and individuals continues to be the main challenge facing ACOA. Initiatives such as Team Canada Atlantic have increased the exposure of the region’s firms to various export markets in the United States and Europe. The AIF will be providing $600 million to Atlantic Canadian businesses and higher educational institutions during this decade in order to improve research and development and innovation in the region. The Agency is also involved in making the business case for investments in the Atlantic Gateway, which will facilitate trade flows and lead to increased economic opportunities.

The following paragraphs provide an overview of Atlantic Canada’s 2006-2007 economic landscape. Provincial economic challenges for 2006-2007 are detailed in Section IV of this report.

Following growth of only 0.9% in both 2004 and 2005, the Atlantic Canadian economy strengthened in 2006, with real gross domestic product (GDP) increasing by 2.3%. After declining the previous two years, output in the region’s goods‑producing industries rose by 2.2% in 2006, mainly due to increases in mining (e.g. Voisey’s Bay) and construction. Despite these gains, activity in the manufacturing sector declined for a second consecutive year, affected by the strong Canadian dollar and weakness in the resource sectors, resulting in the closure or temporary shutdown of several wood and paper mills and fish processing plants in the region.

Growth in the region’s services-producing industries accelerated in 2006, increasing by 2.4%. Activity was strongest in the retail trade, administrative (e.g. call centres) and professional services (e.g. information technology) sectors.

Atlantic Canada’s labour market improved slightly in 2006, yet continued to perform below the national average. After increasing by only 0.2% in 2005, employment in the region rose by 0.5% (or 5,600 individuals) in 2006, while employment in Canada increased by 1.9% during this period. The unemployment rate in the region fell from 10.4% to 9.9% in 2006, its lowest level in over 30 years. However, part of this decline was due to a drop in the labour force, which fell for a second consecutive year as numerous people left the region in search of better employment prospects. The participation rate fell slightly in 2006 to attain 62.7%, yet remains just below its record level.

Between July 2005 and July 2006, the population of Atlantic Canada fell by 0.3%, or 7,980 individuals, to stand at 2,331,769. This trend was mainly due to out-migration from the region. Population was stable in Prince Edward Island, but it declined in the three other Atlantic Provinces. Over the course of the past few years, Atlantic Canada's urban centres and their surrounding rural areas have experienced the most population growth in the region, while more remote rural areas have been experiencing population decline. In 2006-2007, the Agency continued its efforts in responding to the challenges related to Atlantic Canada’s population shift by collaborating with provincial and federal partners to develop joint initiatives.

The Canadian dollar has appreciated significantly against its U.S. counterpart over the past four years, affecting the competitiveness of Atlantic Canada’s exporters. Nearly 80% of goods shipped from the region are destined for the United States market. The stronger Canadian dollar, along with higher energy prices and the housing‑related slowdown in the United States, has had a significant impact on the region’s manufacturing sector, with the loss of more than 10,000 jobs over the past two years.

Emerging international economies and changing trade patterns are affecting the way Atlantic Canada is doing business. Increased productivity and accessing global value chains are issues that the region is currently addressing. After rising by 8% in 2005, exports of commodities from Atlantic Canada declined by 3% in 2006. Losses in the region were significant in seafood, pulp and paper, wood and natural gas, while changes in the region’s other major export commodities were relatively modest, with the exception of minerals. Atlantic Canada’s exports to the United States fell by 4% in 2006, mainly due to lower exports of natural gas and wood products. The decline in Atlantic Canada's exports to the United States was partially offset by increases in exports to other countries. For example, exports to China, the second largest destination for the region’s products, rose by 4%, as gains in iron ore and pulp offset losses in seafood products (e.g. crab, shrimp and mackerel products). Exports to the Netherlands increased by 60%, mainly due to increases in refined petroleum, wood products and fabricated metal products. The value of exports to India increased by 39%, largely due to increased shipments of pulp and paper products. Exports to Australia rose by 26% as a result of increased iron ore shipments.

While the value of crude oil exports increased because of higher prices, foreign shipments of natural gas declined due to lower prices and reduced volume. Gains in minerals resulted mainly from higher exports of zinc and copper. Although aquaculture exports registered gains, mainly from farmed salmon, lower landings and prices led to a decline in shipments of crab products, while the value of exports of unprocessed lobsters fell due to lower prices. Market conditions in the forestry sector remained poor, as lower lumber prices and reduced demand in the United States affected exports of wood products. The temporary shutdown of a paper mill in Nova Scotia and the closure of a newsprint mill in Newfoundland and Labrador late in 2005 led to a reduction in exports of pulp and paper products.

As noted previously, ACOA’s programs take into account these external economic factors, which remain structural challenges in Atlantic Canada’s economy. The Agency’s activities seek to assist the region in being more competitive, which fosters innovation, investment and efficiency for productivity growth, and promotes a more resilient, adaptable economy. The Agency’s innovation strategy, for example, involves research, consultation, and collaboration with stakeholders to identify gaps, challenges and opportunities to be addressed, and allows flexibility in terms of priority setting and focusing on strategic sectors in Atlantic Canada (i.e. information communications technology (ICT), biotechnology, energy). In 2006-2007, part of ACOA’s activities focused on investment, innovation and business skills development in order to contribute to enhancing productivity in the region. For instance, the Productivity and Business Skills Initiative has encouraged small and medium-sized businesses to invest in the development of technical, commercialization and management skills.

1.4.2 Linking ACOA’s Outcomes/Activities to the Government of Canada’s Outcomes

The Government of Canada’s annual report on performance, entitled Canada’s Performance 20065, provides an overview of how individual departments and agencies contribute to broader, government‑wide outcomes in the following key policy areas: economic affairs, social affairs, international affairs, and government affairs (federal organizations that support all departments and agencies).

ACOA’s program activities and strategic outcomes are complementary, and support the Government of Canada’s contribution to strong economic growth. ACOA’s sub‑activities, which are more specific in nature, also support and contribute to a number of other federal government outcome areas such as: an innovative and knowledge‑based economy, income security and employment for Canadians, a clean and healthy environment, a vibrant Canadian culture and heritage, as well as a diverse society that promotes linguistic duality and social inclusion.

Chart: The relationship between the GOCs outcomes and ACOAs contribution toward them and its program activities.The Government of Canada’s “strong economic growth” outcome area includes initiatives aimed at strengthening economic development in all regions and sectoral competitiveness. The government recognizes that regional development policies are important components of a comprehensive strategy to help the regions of Canada exploit the opportunities in a global economy. Furthermore, the Government of Canada is dedicated to pursuing a strategy that invests in skilled knowledge workers, and cutting‑edge research and innovation. ACOA, through its program activities and sub‑activities, supports these government outcomes, which in turn foster an environment where citizens can prosper. The following table depicts the relationship between the Government of Canada’s outcomes and ACOA’s contribution toward them, through its program activities.

1.4.3  Program Performance

The following provides an overall description of ACOA’s performance in 2006-2007. Detailed information on each of ACOA’s program activities, as well as additional information on ACOA’s key programs and services, and its leadership role in Atlantic Canada’s economic development, are outlined in Section II.

1.4.3.1  Enterprise Development

One of the keys to a stronger economy in Atlantic Canada is to foster the establishment and development of small and medium‑sized enterprises (SMEs). The Agency, through its program sub‑activities, does essentially three things: first, helps entrepreneurs to start new businesses; second, assists existing SMEs to grow and become even more competitive; and third, seeks to improve the business climate in order to promote the establishment of new businesses in Atlantic Canada. By providing entrepreneurship training and access to financing and business information, ACOA attracts people interested in starting businesses. By providing assistance toward costs related to innovation, skills development and trade, the Agency works with SMEs to enable them to grow and be competitive. By promoting the region as a great place to do business, ACOA is able to attract new companies to Atlantic Canada.

In 2006‑2007, the Agency achieved the following results from its program sub-activities aimed at fostering competitive and sustainable Atlantic Canadian enterprises.

Innovation: This sub‑activity is significant in terms of strategic importance to the long‑term economic development of the region. Consequently, this is where the Agency has focused much attention and significant investment through its Business Development Program and Atlantic Innovation Fund. Under the latter, 30 projects were approved, representing a contribution of $77 million toward project costs of $215 million, in sectors such as IT, life sciences, and oil and gas/oceans technology clusters. Development of strategic sectors was further pursued, along with encouraging more private sector investment in innovation activities, and fostering partnerships and collaboration for technology development.

Entrepreneurship and Business Skills Development: During the year, ACOA continued to promote entrepreneurship as a career option, and invested in the development of business skills of aspiring and existing entrepreneurs, to strengthen their ability to recognize and seize economic opportunities and to succeed at all stages of the business cycle. As a result of its ongoing investments, ACOA’s performance (over a three-year target) remained on track, with 85.7% of participants in business skills development activities indicating the skills acquired are relevant to enhancing the start-up, survival or growth of their businesses. Various investments also focused on the development of young entrepreneurs, women business owners, and aboriginal entrepreneurs.

Trade and Investment: In 2006-2007 the Agency funded over 210 partnered trade and investment projects. With programming such as the Atlantic Trade and Investment Program (which has resulted in over 4,000 firms increasing their export readiness since 2002), International Business Development Agreement, and Business Development Program, ACOA has been instrumental in the export growth and competitiveness of the Atlantic region and its SMEs, as well as promoting the region as a profitable place in which to do business.

Tourism: In 2006‑2007 the Agency continued to deliver on a wide variety of initiatives related to tourism. Whether by promoting Atlantic Canada as a tourism destination, by helping to build the tourism capacity, by fostering tourism partnerships, or by co‑ordinating the presence and actions of the federal government, the Agency served as a catalyst to the tourism industry, ensuring its growth and importance as an economic engine in the region.

Other Support to SMEs: ACOA approved a total of 140 projects from companies establishing, modernizing and/or growing their business. In the realm of financing, during the year the region saw expanded activity in the areas of venture capital and angel financing.

Access to Business Information: The Agency continued to manage and support the four Canada Business service centres in the region. The centres provided a variety of information to aspiring and existing business people on government programs, regulations and resources. A survey completed in 2006-2007 concluded that 85% of users were satisfied with the quality of the information received.

1.4.3.2  Community Development

The Government of Canada is committed to working with Canadians, organizations and other levels of government to ensure the sustainability of communities. In Atlantic Canada, a larger portion of the population is based in rural areas than is the case for Canada as a whole. It is an Agency priority to adopt a holistic approach to community development by working to develop the strength of these communities. ACOA is having a positive effect in these rural areas by supporting existing firms and encouraging new start‑ups.

In 2006‑2007, the Agency achieved the following results from its activities aimed at developing dynamic and sustainable communities for Atlantic Canada.

To be sustainable and grow, communities must invest in those initiatives that show the potential to stimulate economic development. The main tool in support of community investment is the Innovative Communities Fund (ICF). In fiscal 2006‑2007 ICF committed over $58 million to 167 projects across the region. This program builds on the strengths of communities and provides the tools needed to identify opportunities available for their sustainable economic growth.

Investments are targeted principally in areas such as strategic community infrastructure, tourism infrastructure, industry/business development, strategic marketing, research and development, skills development, strategic planning, broadband/technology infrastructure as well as other initiatives that support the development of self-sustaining, economically viable communities.

During the year ACOA continued to support the Community Business Development Corporations (CBDCs). The CBDCs continue to play a crucial role in addressing the lack of capital in rural communities, as well as providing business counselling and skills development. These investments are critical for the vitality and sustainability of rural communities. The Community Futures Program has provided an essential source of capital for SMEs, and, according to the 2006‑2007 CBDC activity reports, assisted in creating a total of 1,864 jobs and provided a total of 1,799 loans to SMEs in urban communities.

ACOA also provides funding to partners to deliver business counselling and capital to rural communities throughout Atlantic Canada. During 2006‑2007, ACOA continued to work with Regional Economic Development Organizations (REDOs) to facilitate and co-ordinate regional strategic planning, and to support the REDOs in playing a proactive role in economic development within their communities. In 2006‑2007, ACOA contributed a total of $10.1 million toward operational funding of REDOs. With REDO leadership, rural communities developed 133 community‑based strategic projects, with a total value of $22.2 million.

ACOA also works closely with French language minority communities to ensure service in French to its Acadian and Francophone clientele. ACOA uses the Business Development Program, the Innovative Communities Fund, and funds accessed through its partnerships to support the official language minority communities to engage in economic development projects of an incremental nature. In 2006-2007, ACOA invested in 77 projects across the region which had an incidental impact on the Francophone communities.

Atlantic Canada’s Aboriginal demographic is composed of diverse communities. The responsibility for Aboriginal economic development is shared with other federal government departments. For this reason, ACOA contributes to the shared responsibility of Aboriginal economic development by working through a number of co-ordinating, tripartite mechanisms involving Aboriginals and other federal and provincial authorities, in developing a more co-ordinated response to address Aboriginal economic development issues and needs.

Community‑based infrastructure programs are implemented by ACOA in the Atlantic region. ACOA has developed unique knowledge and experience with community economic development in the region, and has had success over the last 13 years developing a solid working arrangement with the four Atlantic provinces on infrastructure delivery. The Agency remained committed in 2006‑2007 to deliver on these important federal initiatives.

Infrastructure funding in Atlantic Canada is vital to the region’s economy. In most cases, the Government of Canada is matching the provincial contributions and generally providing up to one‑third of the cost of infrastructure projects. Under these funds, Infrastructure Canada provides national co‑ordination among delivery partners in the implementation of the projects.

1.4.3.3  Policy, Advocacy and Co‑ordination

ACOA’s Policy, Advocacy and Co-ordination (PAC) roles ensure that the Agency can effectively identify, analyze and respond to the critical issues facing the Atlantic economy. The Agency’s policy activities offer a grounded base of understanding for the development of strategic priorities and initiatives, program design, and input to national policy development and federal‑provincial relations. Advocacy activities aim to advance the region’s interests in national policy and program development, and to pursue regional industrial benefits from public sector procurement, particularly major Crown projects, to improve the position of Atlantic industries. Co-ordination activities include engagement of a range of economic partners to address the economic priorities of the Atlantic region through a coherent and collaborative approach to development. ACOA plays an important role in the co-ordination of the policies and programs of other federal and provincial departments affecting the region’s economy.

During 2006-2007, the Agency continued its efforts in developing and supporting policies and programs that strengthen the Atlantic economy. The Government of Canada recognizes that changing trade patterns and increases in productivity and higher value activities among emerging international economies are driving the need for a more competitive Canada. The Atlantic region is currently seeking to address these realities, and ACOA is assisting the region in this endeavour.

Some examples of activities undertaken in 2006-2007 with a broad reach include federal-provincial activities such as the joint development of initiatives to increase immigration and address the population issue in Atlantic Canada, and the setting up of an Atlantic Gateway working group. In collaboration with federal and provincial counterparts, ACOA also developed a framework to enhance the competitiveness of the region’s resource industries. ACOA’s advocacy function was effective in guiding and supporting federal investment and policy considerations in the Atlantic region, such as industrial regional benefits in the area of military contracts, science and technology investments as part of a national strategy, and trade and investment advocacy activities with the United States in collaboration with Foreign Affairs and International Trade Canada.

1.4.4  Management Performance

Improved management practices and controls continued to be priorities for the Agency in 2006-2007. The following highlights ACOA’s management performance in implementing initiatives to strengthen its accountability and planning regime.

Integrated Planning

The Agency has a well-established corporate planning process in place. An executive planning session was held in September 2006 to assemble the executive cadre for strategic discussions dealing with opportunities and challenges facing ACOA; to raise awareness of issues that may influence the Agency’s management, policy and program agendas; and to share the minister’s and president’s thoughts on the Agency’s future direction.

Following this event, all regions and branches successfully completed and submitted operational plans and human resource plans as per the Agency’s Program Activity Architecture (PAA), clearly demonstrating how the operations of the Agency will advance the realization of its three strategic outcomes.

In addition, ACOA made progress toward enabling more strategic and comprehensive use of financial and non‑financial information in its performance management process, to help set strategic directions and to assess performance against expectations. The Agency gathered high-level performance information (e.g. macro-economic analysis) to determine key policy direction. The evaluation and audit processes provided timely and relevant information to senior management on program viability and outcomes. This performance information served to make more informed decisions about program operations, policy directions, and priority setting for the following years.

Human Resources Management

ACOA integrated its human resource planning into its business planning cycle by including human resources as a formal, integral and mandatory part of the Agency planning process for fiscal year 2006‑2007 and beyond.

The integration has been fully implemented, and is now part of the annual executive planning forum. The human resource planning requirements are specifically included in the president's call letter for the preparation of operational plans.

As a result of this year’s planning exercise, an Agency‑wide human resources strategic plan was developed, in which key challenges were identified and recommendations were brought to ACOA’s executive cadre to address these challenges. In the coming years, the Agency will focus on the development and implementation of an action plan to move these recommendations forward.

Management Control Framework

In 2006-2007, the Agency continued to strengthen its management control framework through recommendations made in regular assurance audits of ACOA’s risk management, internal control and governance systems. Additionally, ACOA’s audit committee will review the Agency’s internal control arrangements, including the adequacy of any management-led audits. Beginning in the third quarter of fiscal year 2007‑2008, ACOA’s internal audit directorate will work with Office of the Comptroller General officials to recruit and appoint independent, external members to the Agency’s audit committee. By March 31, 2009, the audit committee will consist of three external members, with the president of ACOA as chair.

Flowchart: ACOA 2006-2007 Program Activity Architecture