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Minister’s Message

As Minister responsible for Western Economic Diversification Canada (WD), I am pleased to present the Departmental Performance Report for 2007-2008.

For more than 20 years, WD has worked diligently to support the long-term development and diversification of the western economy and represent the West in national policy and program implementation. As a champion for the West, the Department continues to play a vital role in helping build a stronger West and stronger Canada.

In 2007-2008, WD focused its work on achieving results that support the Department’s three, interconnected strategic outcomes:

  • A competitive and expanded business sector and a strengthened innovation system in Western Canada;
  • Economically viable communities in Western Canada with a high quality of life; and,
  • Policies and programs that support the development of Western Canada.

Entrepreneurs and innovators are key drivers of the western economy and crucial to its future prosperity. Investments in WD’s long-standing Western Canada Business Service Network have provided small- and medium-sized enterprises with improved access to risk capital and business services. Our work in innovation priorities continues to increase knowledge-driven and value-added activities that transfer to commercial applications.

Western communities are constantly adjusting to changing - and often challenging - economic circumstances. As such, our department played an important role in helping shape the long-term sustainability of these communities. Last year, WD partnered with provincial and municipal governments to deliver crucial infrastructure investments in communities across the West and made continued progress delivering projects that help western communities sustain their local economies.

WD worked collaboratively with provincial and municipal governments, universities, research institutes, industry and not-for-profit organizations throughout 2007-2008. These close working relationships helped to ensure that WD was as a strong and informed partner in the development and diversification of the western economy and in the development of federal policies and programs.

As we move forward, Western Economic Diversification Canada is investing in partnerships, projects and programs that support entrepreneurship, strengthen innovation and contribute toward a sound economic future for Canadians.


The Honourable Jim Prentice
Minister of the Environment



Minister’s of State Message

Minister of State

Western Canada's strong base of natural resources, emerging business clusters and innovation make it a key contributor to Canada's economy. As the federal department responsible for the West, Western Economic Diversification Canada (WD) works with partners and stakeholders to foster the development of these resources and contribute to the stability and diversification of the western economy.

WD priorities support the Department's strategic outcomes and we have actively worked to strengthen these priorities to ensure our efforts stay focused on stimulating a robust, resilient and diversified western economy.

Through targeted investments in major undertakings, such as our investment in the Asia-Pacific Gateway and Corridor Initiative and regional science and technology councils, we are ensuring the region's global competitiveness and opportunities for trade and investment continue to increase. We are also contributing strongly to the priorities outlined in the Advantage Canada Plan and the Science and Technology Strategy, and supporting the creation and growth of an entrepreneurial and knowledge-based economy in the West.

To ensure the continued relevance and effectiveness of our activities, over the past year WD initiated evaluations of two major programs - the Western Diversification Program and the Community Futures Program. WD also completed an impact study in 2007-2008 of our investments in Western Canada's life sciences cluster, and initiated impact assessments of the Women's Enterprise Initiative and Francophone Economic Development Organizations. This on-going evaluation activity is essential for WD to continue to deliver positive results for the West and provide value for money for our citizens.

In 2007-2008, WD invested a total of $195.9M in 197 projects that leveraged an additional $299.2M from other partners. Through partnerships with provincial and municipal governments, universities, research institutes, industry and not-for-profit organizations, initiatives such as our Western Economic Partnership Agreements and Loan and Investment Program continue to support and nurture entrepreneurial capability and skills development.

By building on regional strengths and investing in western communities, entrepreneurs, and innovators, WD is helping create a sound foundation for Western Canada over the long-term.


The Honourable Lynne Yelich
Minister of State (Western Economic Diversification)


Management Representation Statement

I submit for tabling in Parliament, the 2007-2008 Departmental Performance Report (DPR) for Western Economic Diversification Canada.

This document has been prepared based on the reporting principles contained in the Guide for the Preparation of Part III of the 2007-2008 Estimates: Reports on Plans and Priorities and Departmental Performance Reports:

  • it adheres to the specific reporting requirements outlined in the Treasury Board Secretariat (TBS) guidance;
  • it is based on the Department’s approved Program Activity Architecture (PAA) as reflected in its Management Resources and Results Structure (MRRS);
  • 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 it; and
  • it reports finances based on approved numbers from the Estimates and the Public Accounts of Canada.


Oryssia J. Lennie

Deputy Minister

Western Economic Diversification Canada


Summary Table

Reason for Existence

Western Economic Diversification Canada’s mandate is to promote the development and diversification of the economy of Western Canada (Manitoba, Saskatchewan, Alberta and British Columbia) and to advance the interests of Western Canada in national economic policy, program and project development and implementation.

Financial Resources ($ thousands)

Planned Spending Authorities1 Actual Spending2
$269,082 $326,723 $247,160

Human Resources (FTEs)

Planned Actual Difference
384 395 -11


Departmental Priorities

Name Type3 and Status4

1. Support for business competitiveness and growth

Ongoing - Successfully Met

2. Improve linkages between strategic infrastructure investments and economic development initiatives

Updated Commitment - Successfully Met

3. Greater emphasis on supporting commercialization and value-added production

Updated Commitment - Successfully Met

4. Improve international competitiveness and strengthen trade and economic corridors of importance to the West

Ongoing - Successfully Met

5. Strengthen accountability, transparency, and performance reporting with members of the Western Canada Business Service Network (WCBSN) and improve coordination among WCBSN members and other business and economic organizations

New - Successfully Met

6. Implement a modern management agenda that focuses on improving management practices within the Department including: strengthening accountability to Canadians, integration of human resource planning and risk assessment with business planning, and improving information management

Ongoing - Successfully Met

Status on Performance

Program Activity Expected Results Performance Status5 Planned Spending (000’s) Actual Spending
Contributes to the following priority
Strategic Outcome: A competitive and expanded business sector in Western Canada and a strengthened western Canadian innovation system (Entrepreneurship & Innovation)
Business Development & Entrepreneurship The growth of small businesses in Western Canada and their improved capacity to remain competitive in the face of rising global competition. Successfully Met 57,786 55,987 1 - Business competitiveness & growth

4 - International competitiveness and strengthen trade and economic corridors

5 - Strengthen accountability, transparency, and performance reporting

Innovation An increase in knowledge-driven and value-added economic activities, built on both traditional and emerging industries, that creates a more diversified and resilient economy in Western Canada. Successfully Met 64,696 70,065 3- Commercialization and value-added production
Strategic Outcome: Economically viable communities in Western Canada with a high quality of life (Community Economic Development)
Community Economic Planning, Development and Adjustment To ensure strong and viable communities in urban and rural areas of Western Canada capable of responding to challenges that hinder competitiveness, opportunities, and quality of life. Successfully Met 103,952 74,153  
Infrastructure To improve and expand sustainable public infrastructure that enhances the quality of the environment and allows for long-term economic growth. Successfully Met 29,946 36,505 2 - Linkages between strategic infrastructure investments and economic development
Strategic Outcome: Policies and programs that support the development of Western Canada (Policy, Advocacy and Coordination)
Collaboration & Coordination Better coordinated economic development activities and programs in the West. Successfully Met 5,885 4,475 All program priorities
Advocacy An improved understanding and awareness of western issues and increased access to and participation in federal programs by the region. Successfully Met 2,660 3,223 All program priorities
Research & Analysis An enhanced dialogue around and understanding of western issues, challenges, opportunities and priorities. Successfully Met 4,157 2,752 All program priorities

WD’s Strategic Planning Framework

The diagram below summarizes WD’s PAA, demonstrates how WD’s 2007-2008 priorities contributed to achieving the Department’s Strategic Outcomes, and how WD contributes to the Government of Canada outcomes. (For a complete listing of WD’s sub-activities, please refer to Table 15.)

WD's Strategic Planning Framework


Summary of Departmental Performance

Operating Environment

The Department’s main activities consist of providing grants and contributions (G&C) funding for projects that contribute to WD’s strategic outcomes. A range of program authorities are used to deliver WD’s mandate and these are described in more detail in Table 5, as well as on WD’s web site under Programs. WD posts listings of approved G&C projects in excess of $25,000 on the departmental web site under Proactive Disclosure of WD Expenditures.

To deliver its mandate effectively, WD relies upon its strong relationships with provincial governments, municipalities, universities and other post-secondary institutions, business associations, community economic development organizations, financial institutions, and the not-for-profit sector. Many of these relationships have resulted in formal agreements between two or more orders of government to deliver on joint priorities, such as the Western Economic Partnership Agreements, the Urban Development Agreements, and the Canada-Saskatchewan Northern Development Agreement. These agreements are sub-programs of WD’s "flagship" program authority, the Western Diversification Program, and are described in more detail on WD’s web site under Programs.

Small business growth and competitiveness is critical to the development and diversification of the western Canadian economy, and the Department contributes to the success of Small- and Medium-sized Enterprises (SMEs) in the West by making resources available for them to grow their businesses. Rather than providing funding directly to individual businesses, the Department works with industry or business organizations and other entities such as members of the Western Canada Business Service Network (WCBSN). WD provides operating funding to WCBSN members [Community Futures Development Corporations (CFDC), Canada Business Service Centres, Women’s Enterprise Centres, and Francophone Economic Development Organization (FEDO)]. These organizations work with each other, their respective communities, and with other organizations to ensure that SMEs have access to information and capital.

Performance Measurement

All proposed projects are subject to rigorous due diligence, and must contribute to one of WD’s Strategic Outcomes. WD’s performance management framework includes relevant performance indicators at all levels of the PAA. A continuing challenge for the Department is to aggregate the results of diverse projects, which in many cases may not realize results for up to five years after approval. Project Gateway, WD’s web-based G&C project information system, continues to assist in these efforts. For example, a results reporting module was added to Project Gateway in 2007-2008, which allows for the reporting of aggregate program activity results. WD’s Collaboration and Coordination, and Advocacy program activities present additional challenges in reporting results, as they do not generally entail project funding, often involving interventions by WD staff on interdepartmental and Cabinet issues.

One strong component of WD’s performance management framework is the on-line reporting provided quarterly by members of the WCBSN. WD also undertakes program evaluations and impact studies to assess the degree to which key programs succeed in contributing to the Department’s outcomes.

Context: Western Canada Economic Overview

In 2007, Western Canada’s economic performance was robust and well-balanced throughout the region; gross domestic product (GDP) growth averaged 3.2 per cent, compared to the national average growth rate of 2.7 per cent. Despite this recent performance, a number of structural issues needs to be addressed over the long-term to ensure a more resilient western economy :

  • Ongoing reliance on the resource sector and exposure to volatile commodity markets;
  • Low Aboriginal labour force participation rate in spite of overall high employment;
  • Low business expenditures on research and development (R&D) resulting in fewer technologies being commercialized;
  • Small proportion of western SMEs export, although research indicates exporters outperform non-exporters, and; and
  • Lack of access to early stage capital to facilitate company start-up and growth.


The year’s favourable economic conditions were driven by numerous factors including: higher oil and commodity prices, steady construction, and thriving consumer demand. The increase in output however, was focused in the services sectors, which expanded by 4.4 per cent compared to a goods-producing activity increase of 0.5 per cent.

Overall, the West accounted for 35.9 per cent of the total national output with only 30.5 per cent of Canada’s population in 2007. Across the western provinces, populations grew from both inter-provincial and international migration. More than 31.2 per cent of all newcomers to Canada chose the West as their final destination. However, this increased population did little to ease the tightening labour market as provincial unemployment rates averaged four per cent, significantly lower than the national average of six per cent.

Following the strongest multi-year economic expansion in three decades, British Columbia’s (BC) economic growth has slowed to 3.1 per cent in 2007 from an average of 3.5 per cent between 2003 and 2006. Fortunes in the province’s forest-dependent communities have declined due to the high value of the Canadian dollar and decreased new home construction in the United States (US), which consequently, have led to over 11,000 jobs lost and 47 sawmill closures. These same forest-dependent communities will soon face diminished timber supplies due to the impact of the mountain pine beetle infestation. In contrast, BC’s urban economy has performed well, driven by infrastructure development in the lead-up to the 2010 Winter Olympic and Paralympic Games, residential construction, the service sector, and emerging high technology sectors.

Alberta's economy has moderated, falling from a historic 6.6 per cent level of GDP growth in 2006 to 3.3 per cent in 2007. Alberta had Canada’s lowest unemployment rate of 3.5 per cent and the highest participation rate. Alberta’s population growth was the highest in Canada, but was lower than the all-time high in 2005 due to decreased inter-provincial migration.

The province’s strong economic performance was aided largely by record-high oil prices, as the sector accounts for approximately one-in-six jobs in the province. Weaker activity in the natural gas and conventional oil sectors, however, was a significant factor in the province’s growth moderation. Likewise, manufacturing activity stagnated as machinery production declined, and construction activity, while still strong, slowed considerably after a three-year boom. Alberta continues to be heavily reliant on the energy sector, resulting in an economy that is vulnerable to fluctuations in energy prices and demand.

Rebounding from negative growth of -0.4 per cent in 2006, Saskatchewan’s economy posted a 2.8 per cent expansion in 2007. Soaring commodity prices benefited potash, uranium and grain producers with spillover effects spreading throughout the economy, especially in retail and wholesale trade, financial services and tourism sectors. Employment advanced two percentage points and the unemployment rate dropped to a three-decade low of 4.2 per cent even though the province’s population growth exceeded the national average. Residential construction rose sharply with housing starts up 61.7 per cent while prices skyrocketed. Strong growth in labour income spurred consumer spending on a wide variety of other goods and services with retail sales growth highest in the country at 10.2 per cent.

In 2007, Manitoba’s broad-based expansion of 3.3 per cent tied it with Alberta for the second highest economic growth in Canada. Booming residential and commercial construction, diversified manufacturing growth, and healthy personal spending propelled the province to another year of growth above the national average.

In spite of this, Manitoba was the only western province to register a net loss of population through inter-provincial migration. The unemployment rate held steady at 4.4 per cent and labour income growth expanded 7.4 per cent. Due to its diversity, the province’s manufacturing sector has weathered the US slowdown better than most provinces; it registered its highest gain in shipments since 2000. The industry’s remarkable 4.6 per cent gain compares to a one per cent weakening at the national level.

Key indicators at the provincial and national level are presented below in Figure 1:

GDP at current price, $ million 190,214 259,941 51,166 48,586 582,019 298,157 26,410 33,296 4,538 29,034 1,531,427
Real GDP ** 163,200 189,470 39,500 41,644 532,842 266,104 23,213 29,042 4,129 19,336 1,316,219
Real GDP growth, % 3.1 3.3 2.8 3.3 2.1 2.4 1.6 1.6 2.0 9.1 2.7
Per capita personal disposable income, current prices $ 26,404 34,258 24,738 24,716 27,250 24,292 23,643 24,148 22,331 24,306 26,826
Unemployment rate, % 4.2 3.5 4.2 4.4 6.4 7.2 7.5 8.0 10.3 13.6 6.0
Labour participation rate, % 66.4 74.3 69.3 69.2 68.1 65.8 64.7 64.0 67.9 58.9 67.7
Consumer price index, annual change, % 1.2 4.1 3.7 2 2.1 2.2 2.6 3.1 2.8 2.3 2.4
GDP from manufacturing ** 15,872 16,967 2,689 4,939 90,479 46,879 2,643 2,598 442 820 184,756
Annual change, % -3.0 0.3 -3.2 4.6 -2.2 0.8 -4.7 -0.7 5.2 4.3 -1.0
Domestic exports, customs-based, $ millions 31,554.9 82,113.5 19,432.7 11,561.0 177,228.0 67,254.1 11,160.7 5,299.9 767.1 11,578.9 419,843.5
Annual change, % -5.7 5.6 2.0 1.4 0.0 -2.6 7.7 4.5 -2.5 21.6 2.1
GDP from retail sales ** 9,824 9,291 2,105 2,592 28,065 16,350 1,454 1,807 564 903 72,915
Annual change, % 7.0 9.2 10.2 7.6 4.3 4.8 4.1 2.9 5.6 6.1 5.7
Population, in thousands 4,414.0 3,497.9 1,006.6 1,193.6 12,861.9 7,730.6 751.3 935.6 139.1 508.1 33,143.6
Annual change, % 2.4 3.5 2.1 1.3 1.4 1.0 0.3 0.1 0.4 0.0 1.5
Immigration, number 38,927 20,823 3,515 10,947 111,436 45,224 1,644 2,523 986 541 236,758
Net inter-provincial migration, number 13,385 10,625 10,174 -1,390 -17,762 -14,444 1,100 -546 -237 -694 N/A
Housing starts, number 39,195 48,336 6,007 5,738 68,123 48,553 4,242 4,750 750 2,649 228,243
Annual change, % 7.6 -1.3 61.7 14.1 -7.2 1.4 3.8 -3.0 1.6 18.6 0.4

* Data sources: Statistics Canada

** Preliminary figures

For more information on the economic performance of Western Canada, please visit the WD web site under About Western Canada.

Overall Departmental Performance Against Priorities

WD achieved the following results related to the six departmental priorities for 2007-2008, which in turn contributed to achieving the Department’s overall strategic outcomes:

1. Business competitiveness and growth

The WCBSN improved access to risk capital and business services to SMEs by providing over 540,000 business services,6 and approving 1,407 loans totalling $65.3M. This support created or maintained 8,742 jobs, and created, maintained or expanded 3,447 businesses.7 In addition, 154 loans totalling $15.76M were approved through the Loan and Investment Program (LI Program), leveraged by $1.9M in WD contributions, which will create an estimated 444 jobs and generate nearly $57M in increased sales.

To enhance business productivity and competitiveness, WD supported systemic initiatives such as: $126,000 for FPInnovations to work with the Wood Products Quality Council to implement the Woodmark Quality System in the forestry sector in BC, which will result in 20 certified companies; $341,500 for Manitoba Hydro to provide state-of-the-art fuel-testing services for five local bio-diesel producers; and $2.0M for Canadian Light Source to assist with marketing, with the expected result of attracting 50 new industrial users.

2. Strategic infrastructure investments

Through the delivery of municipal infrastructure programming on behalf of Infrastructure Canada, WD continued to make strategic investments in the economic and business infrastructure of the West, in partnership with public and private sector partners, that support the Department’s objectives of economic diversification and small business growth and competitiveness. Project examples include: the upgrades to the Tsulquate wastewater treatment plant, redevelopment of the Shaw Conference Centre in Edmonton, and upgrades to the Town of Maidstone’s water supply.

3. Commercialization and value-added production

WD continues to play a key role in supporting the creation and growth of knowledge-based business clusters within Western Canada, such as BC’s life sciences sector, which utilizes state of the art technology related to genomic (DNA) sequencing to conduct applied research. For example, WD provided funding support to nine BC regional science and technology councils to offer support services to technology entrepreneurs and emerging companies and to promote rural diversification. The combined efforts of these councils will lead to skills enhancement for over 1100 technology-based entrepreneurs in communities outside of the Vancouver metropolitan area.

4. International competitiveness and trade

WD continued to support the Asia-Pacific Gateway and Corridor Initiative through a trade commissioner study tour of Western Canada’s science and technology capabilities. It is expected that the tour will result in increased business for western Canadian companies in the North Asia, market. WD also supported 35 international business development projects totaling $468,938 through the US Enhanced Representation Initiative (ERI). Through its participation in the ERI, WD supported eight trade missions to the US in 2007-2008, including two Manitoba trade missions to Denver and Chicago that resulted in over $1.5M in new business deals.

5. WCBSN accountability, performance reporting, and coordination

Specific measures included: formalizing minimum community accountability standards, establishing minimum performance standards, providing performance measurement training, providing funding to upgrade information technology infrastructure, and expanding video-conferencing capabilities across the West.

6. Modern management agenda

WD continued to improve management practices within the Department. Examples include: the revitalization of the Department’s audit and evaluation functions will serve to strengthen accountability; the continued implementation of succession planning, which contributed to the integration of HR and business planning; the identification of eight key risks in the Corporate Risk Profile and the development of an action plan to mitigate those risks, which contributed to the integration of risk assessment with business planning; and the enhancements to Project Gateway, WD’s web-based G&C project information system, which has improved information management.

Section IV provides an elaboration of the above improvements to WD management practices; an explanation of lessons learned related to evaluation, audit, performance measurement and stakeholder input; as well as a summary of WD’s results with respect to fulfilling obligations under the Official Languages Act.