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2 Analysis of program activities by strategic outcome

This section presents the results attained by the Agency on the basis of the Program Activity Architecture (PAA) which covered its operations in 2006-2007.

The PAA shows how the Agency allocates and manages the resources it controls in order to attain its targeted results. The PAA clearly associates the Agency's program activities and priorities with the strategic outcomes targeted by the Agency. By making the connection between the Report on Plans and Priorities and the Departmental Performance Report, the PAA makes it possible to monitor the progress made by the Agency.

Program Activity Architecture


Organization

Economic Development Agency of Canada for the Regions of Quebec

Strategic outcomes

Vitality of communities

Enterprises' competitiveness

Program activities

  • Improvement of the economic environment of regions
  • Improvement of community infrastructure
  • Provision of special adjustment measures
  • Enterprise development

The Agency chose to target two strategic outcomes during FY 2006-2007: Vitality of communities and Enterprises' competitiveness. The profile of the Agency's intervention first presents its achievements in 2006-2007.

2.1 Profile of intervention by strategic outcome in 2006-2007

The table below presents the number and value of contribution agreements approved by the Agency during FY 2005-2006 and 2006-2007.

During FY 2006-2007, the Agency signed 957 new contribution agreements. More than one third of them were signed within the framework of its new initiatives. The financial assistance allocated by the Agency to these 957 agreements totalled $403.9 million.

The table shows that the number of contribution agreements signed in 2006-2007 was down slightly from 2005-2006. This decrease is partly attributable to the termination of the Infrastructure Canada Program.8

On the other hand, the total value of financial assistance from the Agency rose markedly between 2005-2006 and 2006-2007, owing in particular to the renewal until March 31, 2010 of the 67 agreements with the CFDCs and BDCs for contributions totalling $112 million. The sums devoted to funding these agreements come from the CFP.

Contribution Agreements Approved in 2006-2007


Contribution agreements by strategic outcome and program activity (PA)

Number of new agreements

Financial assistance approved

2005-2006

2006-2007

2005-2006

2006-2007

(in thousands of dollars)

Strategic outcome #1 – Vitality of communities

502

506

145,222

256,719

PAImprovement of the economic environment of regions

403

458

114,059

248,551

PAImprovement of community infrastructure

39

25,342

PAProvision of special adjustment measures

60

48

5,819

8,167

Strategic outcome #2 – Enterprises' competitiveness

509

451

103,243

147,169

PAEnterprise development

509

451

103,243

147,169

Total1

1 011

957

248,465

403,888


Note:

1 Totals do not necessarily correspond to the sum of individual amounts, since these amounts have been rounded out.

The main recipients of Agency financial assistance during FY 2006-2007 were organizations.9

Contribution agreements by type of promoter


 

 

Number of new agreements

Financial assistance approved

2005-2006

2006-2007

2005-2006

2006-2007

(in thousands of dollars)

Enterprises

470

480

82,169

106,261

Organizations

541

477

166,093

297,627

Total1

1 011

957

248,465

403,888


Note:

1 Totals do not necessarily correspond to the sum of individual amounts, since these amounts have been rounded out.


Two reference bases are used in this report to evaluate Agency performance.

To present the main results observed as of March 31, 2007, the reference base used is that of projects in progress, or active projects, that is, projects for which the Agency made an expenditure during FY 2006-2007. This reference base is used to measure the results of projects continued or completed in 2006-2007, and not just of projects approved during that year.

When reporting on financial assistance approved by the Agency during FY 2006-2007, the reference base used is that of new financial contribution agreements approved between April 1, 2006 and March 31, 2007. This latter reference base is the one used in Section 2.1.


2.2 Strategic outcome #1: Vitality of communities

The vitality of a community affects its socio-economic outlook as well as the establishment, maintenance and expansion of its economic activity base.

The Agency seeks to increase communities' dynamism and revitalize them. To achieve these goals, it supports projects that target development of their socio-economic adjustment capability, appearance of new entrepreneurs, creation of small enterprises, attraction of tourists and retention of skilled individuals.

By intervening financially to renew and construct community infrastructure, and by implementing various special measures, the Agency also works to build and consolidate the base sustaining communities' economic activity.

2.2.1 Program activity: Improvement of the economic environment of regions

A community's vitality depends on its ability to use its assets in order to develop, grow and flourish.

The objectives of the Improvement of the economic environment of regions program activity are the following:

  • foster the development of communities and increase their mobilization, by helping them develop a vision and start up large-scale local and regional projects
  • support communities by backing entrepreneurship and the creation or maintenance of viable enterprises
  • increase communities' capability to attract tourists and skilled workers.

The Help regions and communities in transition priority supports the Improvement of the economic environment of regions program activity.

First, to contribute to improvement of the economic environment in Quebec communities, the Agency supports local, regional and sectoral organizations which act in concert with all economic agents in their local milieu in order to mobilize it, prompt it to take charge of its own development and help it define promising business opportunities.

Organizations supported by the Agency:

  • disseminate information on their region's economic development issues
  • establish development and diversification plans
  • raise local awareness of new challenges and trends to be taken into account
  • help economic agents upgrade their competencies.

Second, the Agency supports non-profit organizations and enterprises so as to help them carry out growth-generating projects for their region. These projects involve, among other things, enhancing regions' tourist attractions to help raise their national or international profile and attract foreign investors, tourists and travellers.

By financially supporting organizations dedicated to regional development, the Agency aims ultimately for enterprises to take advantage of the completion of growth-generating projects and for the resulting business expansion to generate an increase in economic activity, employment and income in the regions.

Through its support for local and regional development organizations, such as CFDCs, BDCs or Community Economic Development Corporations, the Agency also contributes to having the local milieu take charge of its own development and fosters the creation and development of small enterprises.

Finally, through its intervention in the tourism field, particularly vis--vis regional tourism associations, the Agency contributes to the enhancement and tourism outreach of Quebec's regions.

Main results observed for the Improvement of the economic environment of regions program activity10


The Agency provides its financial assistance on an incentive basis, that is, without its assistance a project would not be carried out or would not be carried out on the same scale or within the same timeframe.

More than 80% of respondents stated that their project could not have been completed without Agency assistance, a sure sign of the incentive nature of this assistance.

This percentage climbs even higher (to 99%) when one adds respondents stating that their project could not have been carried out on the same scale or within the same timeframe without financial assistance from the Agency.

Finally, 56.9% of organizations receiving assistance from other fund providers pointed out that they would not have received this assistance if the Agency had not also supported them financially.

The Agency supports local and regional development organizations so as to help communities acquire a vision and start up large-scale local and regional projects conducive to their development and mobilization. As of March 31, 2007, the efforts invested by development organizations vis--vis communities had helped:

  • develop 193 local and regional development strategies, and support 582 local or regional development projects (these projects, which can be spread over more than one year, are currently in progress or will be carried out over the next few years).

Also as of March 31, 2007, projects backed by the Agency to support entrepreneurship and the creation or maintenance of viable enterprises in communities had contributed to:

  • pre-startup, startup and expansion of some 2,077 SMEs, which should lead in the medium term to the creation of employment and wealth in the regions of Quebec
  • development of new products or improvement of existing products in 327 enterprises
  • commercialization of new products by 166 enterprises and emergence of 33 new exporting enterprises
  • development of an innovation action plan by 306 enterprises.

Finally, with respect to communities' increased capability to attract tourists and skilled workers, the projects of the different tourism development and international promotion organizations supported by the Agency had contributed, as of March 31, 2007, to attracting to Quebec close to four million visitors from outside the province.11 Their presence generated economic spinoffs and contributed directly to the dynamism and vitality of Quebec communities. In fact, according to the data available, visitors averaged three nights in Quebec, spending an average of $255 per day.12

Overall, Agency intervention in Improvement of the economic environment of regions contributed to the creation, maintenance or transformation of more than 9,000 jobs. This figure does not allow for the fact that the CFDCs and BDCs reported the creation or maintenance of more than 15,400 jobs in the Quebec communities where they intervened.

Resources used to generate the results targeted in the Improvement of the economic environment of regions program activity

Through its actions, the Agency aims to energize and revitalize the different communities in Quebec and ensure that they enjoy a better socio-economic outlook. The Agency was planning to invest some $360 million over three years—$106 million in 2006-2007—in the Improvement of the economic environment of regions program activity. The grants and contributions expenditures devoted to this activity during FY 2006-2007 were slightly above the projections made in the Report on Plans and Priorities 2006-2007.

In Improvement of the economic environment of regions, the total value of the 1,026 projects in which the Agency is participating that were in progress in 2006-2007 in the different regions of Quebec stood at some $1.6 billion. The Agency invested $595 million of this sum, while other funding providers invested the remainder.

The Agency's actual expenditures stood at $113.6 million during FY 2006-2007. Total expenditures incurred for the 1,026 projects above were $302.1 million.

The two graphs below present the breakdown of total expenditures incurred by the Agency, in 2006-2007, for implementation of projects under the Improvement of the economic environment of regions program activity.

A substantial proportion of expenditures were made under the Canada-wide Community Futures Program, which aims to support local and regional economic development and reinforce communities' capacity to realize their full potential on a lasting basis. It is delivered primarily by the CFDCs.

Improvement of the economic environment of regions
program activity

Total expenditures incurred by type of promoter

Total expenditures incurred by type of promoter

Total expenditures incurred by program

Total expenditures incurred by program

Program Activity:
Improvement of the Economic Environment of Regions

Main results observed as at March 31, 20071


1,026 projects were in progress during FY 2006-2007


 


Indicators of regions' and communities' dynamism(1)

  • 193 development strategies have been or are in the process of being drawn up
  • 582 local and regional development projects have been or are in the process of being carried out

Indicators of local and regional entrepreneurship(2)

  • 2,077 enterprises are in pre-startup, startup or expansion
  • 306 enterprises have an innovation action plan
  • 327 enterprises have developed a new product or improved an existing product
  • 166 enterprises have commercialized a new product
  • 33 new enterprises are exporting

Employment indicator(3)

  • More than 9,000 jobs were created, maintained or transformed

Indicator of Quebec regions' capability to attract foreign tourists(4)

  • Some four million foreign visitors and tourists came to Quebec

Incentive nature of Agency financial assistance(5)

  • Some 99% of the promoters could not have carried out their project without Agency financial assistance or could not have carried it out on the same scale or within the same timeframe.

Leverage effect in the regions of Quebec(6)

  • $1 from the Agency → $2.75 in investment

 


Resources invested2 to generate the results indicated above
Total expenditures of $302,175,000 were incurred in order to support projects in progress (including prior year spending). This figure includes actual expenditures of $113,608,000 for FY 2006-2007. The Report on Plans and Priorities 2006-2007 projected expenditures of $106,538,000.

Notes:

1 See technical notes for the table in Appendix 3.
2 Excludes operating expenditures.

2.2.2 Program activity: Improvement of community infrastructure

The quality of community infrastructure has an impact on Canadians' quality of life. Quality infrastructure enables communities to attract and retain enterprises and workers that will secure their economic and social future. It also makes the movement of people and goods more efficient and safer.

In this spirit, the Government of Canada announced back in 2000 the creation of several infrastructure support programs. Among other things, it signed an agreement with the Government of Quebec in October 2000 for implementation of the Infrastructure Canada Program, namely, the Canada-Quebec Infrastructure Program Agreement. In July 2005, this agreement was amended to postpone the expiration date for the ICP and reflect implementation of a new program, the Municipal Rural Infrastructure Fund.13

The Agency was given by the Government the special mandate of managing the ICP and MRIF programs in Quebec. It also manages some projects under the Canada Strategic Infrastructure Fund.14

The ICP targets the renovation, replacement or construction of infrastructure, and has three components:

  • Component 1: Drinking water and wastewater infrastructure
  • Component 2: Local transportation infrastructure
  • Component 3: Projects with urban or regional economic impact.

Activities carried out to date under the ICP bring benefits to communities, as summarized in the table below.15

Program Activity: Improvement of Community Infrastructure
Infrastructure Canada Program – Quebec Region

Summary of expenditures as of March 31, 2007 for the 901 projects approved


Number of projects approved from the start of the program to March 31, 2006

901

Component 1: Drinking water and wastewater infrastructure

402

Component 2: Local transportation infrastructure

364

Component 3: Projects with urban or regional economic impact

135

Number of projects in progress in 2006-2007

176

(in thousands of dollars)

 

Federal contribution approved from the start of the program to March 31, 2006

507,586

Total federal expenditures from the start of the program to March 31, 2007

173,663

Actual expenditures in 2006-2007

91,117

Total value of projects in progress in 2006-2007

872,948


Main Benefits


Number of additional households which have access to a municipal water supply

3,873

Number of households which have or will have access to a municipal water supply providing better quality drinking water

549,744

Number of additional households which have access to a municipal wastewater collection and treatment system

19,063

Number of households which have or will have access to an effective municipal wastewater collection and treatment system

847,788

Number of communities that will benefit from the establishment or upgrading of transportation infrastructure

262

Number of communities that will benefit from the establishment or upgrading of sports, recreational or cultural facilities

90

Number of permanent jobs that will be created directly as a result of the projects

880


2.2.3 Program activity: Provision of special adjustment measures

The Agency can help communities or regions facing significant economic shocks, such as the closing of plants in an industrial sector, or natural disasters (e.g. flooding in the Saguenay, ice storm in Montral and Montrgie).

When an economic shock or disaster occurs, the Agency can temporarily put special adjustment measures in place enabling communities or enterprises to support their economic activity and initiate action to help them regain their balance or economic stability.

Currently, the Agency is responsible for managing the Canadian Textiles Program CANtex which helps support projects to raise the productivity and competitiveness of textile firms.

Main results observed for the Provision of special adjustment measures program activity

The projects supported by the Agency have contributed to improving enterprises' performance. Thus, the survey on enterprises revealed that:

  • eight enterprises out of ten consider that the project they carried out has contributed to development of higher-performance processes and improvement of their competitive position
  • close to nine enterprises out of ten consider that their profitability improved following completion of their project.

Moreover, despite difficult economic conditions, notably associated with competition from emerging markets in the textile sector, just over half of enterprises whose project was completed stated that their sales had increased as a result of the financial assistance received from the Agency. The revenues of this majority of enterprises rose by an average of more than $900,000.

Finally, projects in progress had an impact on jobs, primarily on their maintenance. In fact, Agency intervention contributed to the creation, maintenance and transformation of some 1,400 jobs.

Resources used to generate the results targeted by the Provision of special adjustment measures program activity

The Report on Plans and Priorities 2006-2007 projected expenditures of $20.1 million in this regard. Actual expenditures stood at $4.5 million. This discrepancy is partially attributable to the Government's practice of Effective spending, which led to a reduction in the funds allocated to the Agency to support Canada's clothing and textiles industries.16

In 2006-2007, the total value of the 85 projects in progress under the Provision of special adjustment measures program activity was $29.4 million, including investment from other funding providers. The Agency essentially intervened in this regard through the Canadian Textiles Program CANtex.

Program Activity:
Provision of Special Adjustment Measures

Main results observed as at March 31, 20071


85 projects were in progress during FY 2006-2007

 


Innovation and productivity indicators(1)

  • 28 enterprises developed higher-performance processes
  • 16 enterprises developed new products or services ready to be commercialized

Business maintenance and growth indicators(2)

  • 21 enterprises stated that they increased their sales (average increase: $900,000)
  • 31 enterprises increased their profitability
  • 31 enterprises improved their competitive position

Employment indicator(7)

  • Some 1,400 jobs were created, maintained or transformed

 


Resources invested2 to generate the results indicated above
Total expenditures of $5,581,000 were incurred in order to support projects in progress (including prior year spending). This figure includes actual expenditures of $4,085,000 for FY 2006-2007. The Report on Plans and Priorities 2006-2007 projected expenditures of $20,110,000.

Notes:

1 See technical notes for the table in Appendix 3.
2 Excludes operating expenditures.

2.3 Strategic outcome #2: Enterprises' competitiveness

Agency intervention targets a second strategic outcome: enterprises' increased competitiveness. More specifically, the Agency contributes to putting in place conditions conducive to sustainable growth of regions and SMEs and their competitive positioning by supporting enterprises' increased strategic capability, innovation, creation and dissemination of new knowledge, establishment of networks and inflow of investment.

2.3.1 Program activity: Enterprise development

The economic environment, characterized among other things by globalization, the higher Canadian dollar and high energy prices, compels Canadian enterprises to be constantly concerned with their competitiveness.

This is the context in which the Agency intends to contribute to increasing SMEs' productivity and innovation to stimulate their growth and competitiveness and improve the employment outlook in the regions. To do so, the Agency intends to:

  • support the lasting growth of enterprises, by helping them to be higher-performance, competitive and innovative
  • support the transfer of technology and research outputs toward enterprises
  • create conditions conducive to attracting foreign investment and international organizations to Quebec.

Main results observed for the Enterprise development program activity


Reinforcing the capability of innovative SMEs is the priority that supports enterprise development.

More than two thirds of respondents (68%) surveyed by the Agency—a figure similar to last year—stated that their project could not have been carried out without financial support from the Agency. This proportion climbs to more than 96% including respondents who stated that their project could not have been carried out on the same scale or within the same timeframe without financial assistance from the Agency. Finally, more than half the respondents who received financial assistance from other funding providers indicated that they could not have obtained this assistance without the Agency's financial contribution.

Projects supported by the Agency and business service organizations helped enterprises become higher-performance and more competitive, innovate further and grow in a lasting manner. Thus:

  • Some 600 enterprises had made sales on new markets. Of this number, 71 stated that the average value of their sales exceeded $335,000.
  • Out of 10 enterprises which received Agency support for a project to increase their productivity and innovation capability, nine stated that the project contributed to improving their competitive position. More than three quarters also considered that the project helped them increase their profitability.
  • More than 70% of enterprises supported by the Agency stated that they had increased their sales as a result of its financial assistance. Their sales increased by an average of approximately $670,000, a figure comparable to that seen in 2004-2005.

These projects have also led to:

  • pre-startup, startup and expansion of 700 enterprises in key sectors in the regions of Quebec
  • adoption of new business practices (e.g. e-business practices and calibration practices) by more than 854 enterprises, and implementation of innovation action plans by more than 789 SMEs
  • emergence of 274 new exporting enterprises
  • commercialization of new or improved products by 216 enterprises
  • influx of more than $620 million in foreign investment; some 75% of this investment was made in the three main high-technology clusters in the Montral area.

Overall, direct intervention by the Agency vis--vis enterprises, or carried out through development organizations, contributed to the creation, maintenance and transformation of more than 7,700 jobs in the different regions of Quebec.

The findings of surveys conducted in 2005, 2006 and 2007 show that year after year, nine respondents out of ten consider that the Agency is an essential partner in the fulfilment of their mission, and therefore contributes to enhancing their service offering and increasing their number of clients.

Perception of organizations providing services to enterprises1


 

2004-2005

2005-2006

2006-2007

Agree
(%)

Agree
(% )

Agree
(% )

Agency assistance enabled the organization to enhance its service offering

95.7

94.3

94.1

Agency assistance enabled the organization to reach a larger number of clients

86.6

90.7

90.1

The Agency is an essential partner in the fulfilment of the organization's mission

92.5

90.9

93.1


Note:

1 Annual survey 2005: 424 organizations questioned; annual survey 2006: 476 organizations questioned; annual survey 2007: 425 organizations questioned.

Resources used to generate the results targeted by the Enterprise development program activity


More than nine out of ten projects could not have been carried out or could not have been carried out on the same scale or within the same deadline.

The total value of the 974 projects in progress under the Enterprise development program activity in 2006-2007 was more than $1.6 billion. Close to one quarter of this amount ($441.1 million) came from the Agency, with the remainder coming from other funding providers.

The Agency's actual expenditures during FY 2006-2007 were $107.3 million, slightly lower than projected in the Report on Plans and Priorities 2006-2007. Total expenditures incurred as of March 31, 2007 for projects in progress in 2006-2007 stood at more than $263.1 million.

The two diagrams below illustrate the breakdown of total expenditures incurred in 2006-2007 by type of promoter and by program. Most of the total expenditures incurred by the Agency (67,3%) were made to support organizations. Intervention under the RSI program accounted for two-thirds of expenditures in FY 2006-2007. The other third was incurred under the IDEA-SME program.

Enterprise development
program activity

Total expenditures incurred by type of promoter

Total expenditures incurred by type of promoter

Total expenditures incurred by program

Total expenditures incurred by program

 

Program Activity:
Enterprise Development

Main results observed as at March 31, 20071


974 projects were in progress during FY 2006-2007

 


Commercialization and export indicators(1)

  • 274 new enterprises exported
  • 590 enterprises made sales on new markets (71 enterprises stated an average increase in sales on new markets of $335,000)

Innovation and productivity indicators(2)

  • 854 enterprises adopted or integrated new business practices
  • 789 enterprises developed an innovation action plan
  • 574 enterprises developed a new product or improved an existing product
  • 119 enterprises developed higher-performance processes
  • 216 enterprises developed new products or services ready to be commercialized
  • 12 enterprises obtained a patent

Business growth indicators(3)

  • 700 enterprises are in pre-startup, startup or expansion in key sectors in the regions of Quebec
  • 46 enterprises modernized or expanded their facilities or equipment
  • 164 enterprises stated that they increased their sales by more than $670,000
  • 148 enterprises increased their profitability
  • 169 enterprises improved their competitive position

Employment indicator(4)

  • More than 7,700 jobs were created, maintained or transformed

Incentive nature of Agency financial assistance(8)

  • More than 96% of promoters could not have carried out their project without Agency financial assistance or could not have carried it out on the same scale or within the same timeframe.

Leverage effect in the regions of Quebec(9)

  • $1 from the Agency → $3.70 in investment

 


Resources invested2 to generate the results indicated above
Total expenditures of $263,102,000 were incurred in order to support projects in progress (including prior year spending). This figure includes actual expenditures of $107,314,000 for FY 2006-2007. The Report on Plans and Priorities 2006-2007 projected expenditures of $117,855,000.

Notes:

1 See technical notes for the table in Appendix 3.
2 Excludes operating expenditures.