ARCHIVED - RPP 2007-2008
Agriculture and Agri-Food Canada

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Strategic Outcome 3 :

INNOVATION FOR GROWTH

An innovative agriculture and agri-food sector that develops food and other agriculture-related products and services in order to capture opportunities in diversified domestic and global markets

INTRODUCTION

Increasingly rapid advances in science and technology mean producers and other agriculture and agri-food sector stakeholders face greater challenges to keep pace. For all players in the sector, operating in the marketplace today requires advanced technology and the latest knowledge to address rapidly changing consumer needs and expectations. Keeping on top of change is key to profitability.

As farming operations become larger and more complex, both new and established producers need to add to their skills and knowledge, ranging from managing financial and human resources to mastering innovative technologies, products and practices to stay competitive. By acquiring additional skills, adopting new technologies, maximizing efficiencies in operations, or changing product mixes, those who earn their livelihood from Canadian agriculture and agri-food will continue to be profitable and successful.

The vibrancy, sustainability and competitive position of Canada's agriculture and agri-food sector will depend on all stakeholders - including producers, processors, researchers, and others - working together to develop new opportunities across the country. At the same time, governments will work with the sector to foster a climate for innovation that encourages investment in the sector.

OPERATING ENVIRONMENT

As mentioned, the agriculture and agri-food sector operates in an uncertain business environment, facing pressure from a variety of risks. There are production risks, including adverse weather, and pests and diseases of crops and livestock. There are market risks, including changing consumer expectations, market access restrictions, and fluctuating exchange and interest rates that impact on farm income and farm debt. There are also competitive risks, including those related to rapid changes in science and technology and increasing competition from developed and developing countries.

As the sector expands, the scope and nature of the pressures it faces are becoming more varied and complex, requiring collaboration along the value chain from inputs through production, processing, distribution, and marketing. More and more, these pressures require multi-disciplinary solutions through co-ordinated and integrated action by a variety of stakeholders.

The discovery and application of new knowledge are key to addressing these pressures. Science will generate knowledge about how challenges may be addressed, and provide the base on which the sector can build innovations to enhance productivity and competitiveness. Innovation will transform that knowledge into benefits for Canadians. It is the process by which ideas for new or improved products, processes or services will be developed and commercialized in the marketplace.

New discoveries and their application are crucial to ensuring the agriculture and agri-food sector and all Canadians benefit from Canada's ability to produce food and an increasing range of non-food products from the land. Examples of these new applications include new biomaterials, biomedical and biohealth products, biofuels, bioenergy, biochemicals, and biopharmaceuticals.

Value chain roundtables, which include participation from the CFIA, will be instrumental in helping to identify pressures on the sector and develop solutions to build and implement sector-specific market strategies and action plans in line with the Canada Brand.

STRATEGIC RESPONSE

AAFC and its portfolio partners are committed to playing a significant role on behalf of the sector and all Canadians by reducing risks, improving productivity and innovation, easing the introduction of new products in food and industrial markets, and facilitating international marketing of Canadian products.

To this end, to achieve the Innovation for Growth strategic outcome, AAFC will work primarily through two departmental program activities: (1) Innovation and Renewal and (2) Markets and International. The Rural Secretariat, Co-operatives Secretariat and Canadian Pari-Mutuel Agency also contribute to this Strategic Outcome.

The department is committed to ensuring that priorities identified by participants in the value chain roundtables regarding policies and programs are factored into its planning and decision making.

INNOVATION AND RENEWAL

Equipping the industry with new business and management skills, bioproducts, knowledge-based production systems, and strategies to capture opportunities and manage change

Net Planned Spending and Full Time Equivalents - Innovation and Renewal

2007-2008		2008-2009		2009-2010
$ millions	FTE	$ millions	FTE	$ millions	FTE
664.3	2,113	325.2	2,113	302.6	2,113

Innovation

While there is a good foundation and capacity for innovation in Canada, the country's ability to capture the benefits of its science investments requires renewed thinking about how government, the sector and all stakeholders work together to optimize the use of available resources. Collaboration will be the key to managing Canada's investments in science and technology to ensure returns across the innovation value chain.

To continue on this path, AAFC will play a leadership role in helping the sector and stakeholders focus on new priorities, challenges and opportunities, to build new critical mass and develop new partnerships among Canada's university, government and industrial sectors to enhance returns on investments in science and innovation. Innovation efforts must also be supported by a co-ordinated and enabling public policy and regulatory framework that keeps pace with the advances in science and technology.

Accordingly, science is being recognized as a key component of the next generation of agriculture and agri-food policy. Science will support a Canadian agriculture and agri-food sector that is innovative and competitive, where all partners work together to be a world leader in the production of food and other agriculture-related products and services that meet global consumer needs in ways that respect the environment and contribute to the best quality of life for all Canadians. In 2007-2008, AAFC will work to enhance the innovative capacity of the agriculture and agri-food sector through support for strategy development and better opportunities to capture the benefits of science and innovation.

The department is expanding its linkages with the health community as perceptions regarding the role of food have changed with the mounting research demonstrating diet as a risk factor in chronic diseases. Exploring the intersection between agriculture and health will stimulate the development of innovative food products and agricultural ingredients that may be seen as a major contributor to health and a potential solution to rising healthcare costs associated with elevated rates of chronic disease.

In support of the future competitiveness and prosperity of the sector, the Government of Canada has increased its support for biomass science and biofuels strategy, and new programming to support the agriculture and agri-food sector in developing new market opportunities.

In July 2006, AAFC announced the Biofuels Opportunities for Producers Initiative (BOPI) , to help agricultural producers and rural communities participate in and benefit from increased biofuels production. The BOPI is being delivered through the regional industry councils that administer the Advancing Canadian Agriculture and Agri-Food (ACAAF) program to assist the Government of Canada in meeting its biofuels commitment of five per cent average renewable fuel content in transport fuel by 2010.

In addition, in December 2006, the Government of Canada announced the Capital Formation Assistance Program, a $200-million, four-year program designed to encourage agricultural producers' participation in the renewable fuels industry. The program will provide repayable capital funding to renewable fuels projects based on agricultural producers' contributions to biofuels facilities. It will also build on the existing technical feasability and business planning components of the BOPI by providing agricultural producers with incentives for participation in new renewable fuels production capacity.

In 2007-2008, the Capital Formation Assistance Program will begin to fund projects based on the level of producers' contributions to eligible project costs and capped at the lesser 25 per cent of total project costs or a maximum of $25 million per project.

Also, in December 2006 the federal government announced the new Agricultural Bioproducts Innovation Program , a $145-million, multi-year program designed to support new and existing research networks and encourage clusters for the advancement of a sustainable and profitable Canadian bio-economy . The program is designed to increase the exploitation of Canada's natural advantage in biomass to develop new economic opportunities for agriculture in the areas of bioproducts and bioprocesses such as biofuels, other forms of bioenergy, biochemicals, and biopharmaceuticals.

Following stakeholder consultations in 2005, AAFC developed a science and innovation strategy, which outlined key science management goals and identified seven key areas for research. In 2007-2008, the department will implement this strategy to maximize opportunities in the global marketplace, resulting in increased profitability through growth, diversification and value-added activities.

The implementation of the Science and Innovation Strategy will:

• provide a vision for the sector, identifying challenges and opportunities;
• identify the science capacity required to meet this vision;
• co-ordinate the role of the various players performing agricultural science and innovation research;
• clarify AAFC's research priorities in support of the vision for the sector and national priorities; and
• identify areas where partnership opportunities exist to establish critical masses of expertise and multidisciplinary research clusters.

There is a requirement to strengthen overall national science and innovation capacity by positioning and integrating AAFC science resources and research efforts within a national frame of multi-disciplinary, multi-player partnerships that cross jurisdictional, disciplinary and institutional boundaries. Bringing supply chain participants together to form value chains that use transformational research to redefine the business of agriculture will position producers and the sector to take advantage of new economic opportunities and capture new markets.

To this end, a key part of AAFC's Science and Innovation Strategy will be the development of innovative partnerships, designed to explore collaboration among the various players involved in research and development. This strategy will examine ways to make the best use of buildings, equipment and the skills and knowledge of Canada's science community. The department will be a leader in science and innovation in emerging sectors, and will be a reliable partner that complements the efforts of other organizations in more mature sectors.

AAFC will consult and co-ordinate to ensure ongoing relevance of its efforts with the strategic priorities of the sector and the government. The department will continue to work in co-operation with the value chain roundtables and other vehicles in support of accelerated adoption and commercialization of scientific and technical knowledge leading to improved economic opportunities for the sector and rural communities.

AAFC is working in partnership with other science and research providers to explore the more efficient use of farm-based feedstocks for ethanol and biodiesel production and the use of waste products to generate methane gas for energy production to support biofuels. This is a key element of the energy, environmental and economic agenda for the Government of Canada. In the longer-term, integrating biofuels production into biorefinery processes that produce fuels and a variety of high-value co-products from biomass, will create improved economic opportunities for farmers and the agriculture and agri-food sector while addressing energy and environmental goals at the same time. Such integrated production and processing solutions will provide a solid basis for sustainable sector growth and economic development opportunities for rural communities.

Initiatives in the areas of bioproducts and bioprocesses represent a snapshot of the efforts of AAFC as a science organization serving the sector by working to meet the demands of a highly segmented world market and by adapting as demands change. Implicit in achieving this goal is the need to be on the cutting edge of new scientific disciplines and tools as they develop.

AAFC will also help develop the Government of Canada's science policy framework during the next three years. The department will participate and provide leadership where necessary in working with other federal departments to develop and implement a national science and technology strategy.

The Advancing Canadian Agriculture and Agri-Food program

The Advancing Canadian Agriculture and Agri-Food (ACAAF) program is a five-year, $243-million program designed to help expand the capacity of the agriculture and agri-food sector to respond to current and emerging issues, and position it to capture market opportunities.

The program was launched in 2004 as a successor to the Canadian Adaptation and Rural Development (CARD) fund, and, like the CARD fund, funds projects at the national, multi-regional and regional level.

The program is delivered at the national level by AAFC and at the regional level by 14 industry councils. These councils provide a unique, grassroots approach allowing a council Board of Directors, consisting of the entire regional agriculture and agri-food value chain, to identify, evaluate and fund industry-led solutions to emerging regional issues.

The program is delivered under the following three pillars, which were confirmed through extensive consultation with industry:

• Pillar I: Industry-led Solutions to Emerging Issues, which supports projects that test or pilot approaches and solutions;
• Pillar II: Capturing Market Opportunities by Advancing Research Results, which supports projects that transfer research results into market opportunities; and
• Pillar III: Sharing Information to Advance the Sector, which supports projects aimed at gathering, analyzing and sharing information to contribute to future agriculture and agri-food policy directions.

In 2007-2008, recommendations of a mid-program assessment of Pillars II and III will be implemented to ensure the ACAAF program continues to effectively meet its objectives and, in particular, the needs of the agriculture and agri-food sector. Efforts will also be made to ensure the program is in the best possible position to complement and link with other initiatives, such as the new Agri-Opportunities Program, while continuing to respond to emerging issues and advance innovative ideas and approaches.

There will also be a continued focus on strengthening the uptake of the national component of the ACAAF program. As part of this work, new service standards will be implemented under the program, including a 40-working-day service standard for approving national applications and a 40-working-day service standard for developing contribution agreements with national proponents.

Industry councils will implement their 2007-2008 strategic plans in delivering the regional component of ACAAF, and will continue to focus on collective outcome projects. Collective outcome projects are multi-regional projects which have a broad application in situations where more than one council shares the same priority, demonstrating greater industry collaboration among stakeholders.

Given the pathfinding nature of the activities it funds, the results of the ACAAF program will contribute to the next generation of agriculture and agri-food policy in 2007-2008.

The Agri-Opportunities Program

The Agri-Opportunities Program is a new $134-million, five-year program designed to enhance the competitiveness and innovative capacity of the Canadian agriculture and agri-food sector. The Agri-Opportunities Program will provide funding to accelerate the commercialization of new agricultural products, processes or services. Funding will be provided for projects designed to increase market opportunities for the Canadian agriculture and agri-food sector across the value chain and generate demand for primary agricultural products produced in Canada. Program investments will enhance the sector's competitiveness and prosperity through transition into new and value-added areas of opportunity.

The program will form an important linkage between other programs, such as the ACAAF program and the Agricultural Bioproducts Innovation Program, moving new products, processes and services further along the commercialization stages.

In 2007-2008, the Agri-Opportunities Program will begin funding projects up to a maximum of $10-million per applicant over five years. Funding to for-profit organizations will be made as repayable contributions.

Renewal

In a rapidly changing environment, strategic business planning and continuous learning are increasing in importance. Strategic planning, lifelong learning and upgrading skills can strengthen the performance of individual agricultural operations, and the sector as a whole.

Through Renewal programming, AAFC and its portfolio partner FCC aim to provide producers with the tools and abilities they need to make business decisions based on good knowledge and skills. Renewal programming is built on the concept of continuous learning, and is designed to help producers assess their situations and plan for the future during critical transition times. Renewal programs enhance producers' access to information, advice and training and enable them to pursue on- and off-farm income opportunities.

During the next three years, informed by the consultations on the next generation of agriculture and agri-food policy, AAFC and FCC will continue to work strategically with partners in the sector to identify the new skills and learning opportunities that producers need to be successful in the increasingly knowledge-intensive economy. Priorities will include finding improved ways to provide farm families with the assistance needed to enhance their skills and knowledge and expand access to tools, advice and information.

In 2007-2008, AAFC will continue to implement the Canadian Farm Families Options Program , designed to help low-income farm families by providing the income support necessary for farmers to take advantage of opportunities to increase their business management capacity to address income challenges. The program links an income support payment with the opportunity to engage in a farm business assessment or development of an individual learning plan that could lead to improved on- or off-income prospects. Farm families that apply to the program and receive an options payment commit to completing business or training opportunities within two years of their application:

In addition, AAFC and its portfolio partner FCC, together with sector and government partners, offer a variety of other ongoing programs and services to help producers acquire the skills they need to adapt to rapid business changes.

• Producers will have access to the Canadian Farm Business Advisory Services (CFBAS) . The CFBAS has two components: Farm Business Assessment and Specialized Business Planning Services . These services provide farmers with access to financial consultants who help them assess their finances and develop action plans and in-depth business plans (that may cover finances, marketing, expansion and diversification) and succession plans. Farmers interested in developing value-added businesses can use the Planning Assessment for Value-Added Enterprise (PAVE) program services.
• The Canadian Agricultural Skills Service (CASS) provides beginning farmers and established producers access to training to help them make choices about their future and enable them to pursue income opportunities both on and off the farm. Through the program, producers will continue to be able to access assistance for skills development and training that could result in higher on- or off-farm income.
• Producers will continue to be able to access the services of qualified financial counselors to prepare financial reviews and recovery plans for farming operations, through the Farm Debt Mediation Service (FDMS) . Qualified mediators are also available to assist in negotiations between producers and creditors to help them arrive at a mutually satisfactory arrangement.
• In addition, Renewal will provide Farm Business Assessments and support for training under the CASS for clients of the Canadian Farm Families Options Program.

AAFC is undertaking an evaluation of Renewal programming. A response to this evaluation will be developed in 2007-2008. The department will also develop a public report on the 2007 National Renewal Survey and Client Impact Assessment survey.

Informed by the consultations on the next generation of agriculture and agri-food policy, the department will continue to work strategically with the sector to identify the new skills and learning opportunities needed to succeed in the increasingly knowledge-intensive economy. Renewal will make key contributions to the next generation of agriculture and agri-food policy through support for options to be considered by ministers, as well as support for negotiations with the provinces and territories. A strategy will also be developed for the transition of existing Renewal programming to the new policy.

Markets and International

Expanding international opportunities for the Canadian agriculture and agri-food sector

Net Planned Spending and Full Time Equivalents - Markets and International

2007-2008		2008-2009		2009-2010
$ millions	FTE	$ millions	FTE	$ millions	FTE
33.7	238	24.5	238	24.5	238

With almost half of all Canadian domestic agriculture and food production exported each year, either directly as primary products or indirectly as part of processed products, a strong international presence and a high profile are key to the success of the agriculture and agri-food sector.

The goal of AAFC's international strategy is to use improvements in food quality, safety and environmental sustainability to maximize global sales for Canadian producers and processors. This strategy is based on certain key principles: leveraging domestic program development to maximize international reputation and market access; linking all research and analytical work to create a comprehensive understanding of market opportunities and challenges; engaging industry continuously and through new relationships to ensure maximum effectiveness of programming; and working closely with portfolio partners, other government departments and provinces and territories to ensure international approaches are cohesive and effective.

The strategic objectives of the international component are two-fold: to achieve greater recognition, at home and abroad, of Canada's capacity to meet the demands for quality in a rapidly changing and highly segmented global market; and to expand the agriculture and agri-food sector's access to foreign markets. AAFC will continue to work closely with industry and provincial and territorial stakeholders.

Over the next three years, informed by the consultations on the next generation of agriculture and agri-food policy, AAFC's Markets and International efforts will:

• leverage domestic improvements, capabilities and scientific excellence into a strong Canada brand, to achieve a more cohesive and positive image of the Canada brand among key markets;
• continue to promote the value chain roundtables and other collaborative mechanisms to foster a climate of collaboration and joint action among sectors;
• refine and prioritize the Integrated Market Engagement Strategies to facilitate increased exports by Canadian companies into existing and new markets;
• develop an investment strategy for innovation;
• seek to leverage the implementation of the Specified Risk Material Feed Ban into market access for ruminants and ruminant products;
• continue to engage in activities directed at increasing Canadian exporters' readiness to take advantage of market opportunities;
• co-operate with other federal departments and agencies, and apply an integrated and strategic approach to international development and co-operation, to gain increased recognition in targeted markets of Canada's expertise in sustainable agriculture, food safety and business risk management;
• assess strategic infrastructure investments, identify transportation constraints, and develop strategies with Transport Canada and other government departments as appropriate; and
• continue to support Canada's agriculture, food and seafood industry associations in their efforts to gain and expand international recognition for Canadian agriculture and food products.

The Markets and International component of the APF contributes to the Innovation for Growth strategic outcome mainly through two of the key areas of the International Strategy: Building Markets and Increasing Investment; and Enhancing International Development and Fostering Science and Technology Linkages. The remainder of the key areas contribute primarily to the Security of the Food System strategic outcome.

Building Markets and Increasing Investment

Significant progress has been made on implementing a strategy for branding Canadian agriculture and food. The Brand Promise that serves as the strategy's backbone has been endorsed by key industry leaders and federal and provincial agriculture ministers. Branding tools have been launched and are now available to stakeholders to help them effectively use the Canada brand in their work, and contribute to building the brand.

In 2007-2008, AAFC will aim to promote greater adoption of the Canada brand and strategy among the sector, by working the branding strategy into stakeholder planning and activities. Industry-led value chain roundtables, which include participation by the CFIA, will continue to play an important role in helping implement the branding strategy. In some sectors, the roundtables are building sector-specific branding strategies to work in concert with the overall Canada branding effort.

The integration of international activities will also help to gain recognition and maximize market opportunities, particularly in emerging markets. AAFC will refine and prioritize the Integrated Market Engagement Strategies to facilitate the increase of exports of Canadian products into existing markets and their entry into new markets.

The value chain roundtables and other collaborative mechanisms will also be promoted by AAFC to foster a climate of collaboration and joint action among sectors as a means of enhancing industry competitiveness. Through the roundtables, the department will effectively establish and monitor government and industry collaborative approaches to growing markets, and propose public and private sector investments in these industries.

Enhancing the competitiveness of the sector also requires an increase in Canadian exporters' readiness to take advantage of market opportunities. To address this requirement, AAFC will review and reposition team services in 2007-2008 to better meet the needs of Canadian companies entering international markets. The department will consult with the sector on a food industry strategy with a focus on innovation, safeguarding agricultural inputs and diversifying markets, while securing and enhancing market access.

Another initiative to foster competitiveness will be a horticulture strategy to guide AAFC engagement with the sector. The strategy will be developed in consultation with the sector, and will serve as a guide for investments in market development, regulatory reform, science, and departmental contribution programming. This strategy will be integrated into the next generation of agriculture and agri-food policy, and progress will be monitored through the horticulture value chain roundtable and the Markets and International board within AAFC.

The assessment of AAFC's strategic infrastructure investments is another key component in enhancing the competitiveness of the sector. Transportation constraints affecting the sector's competitiveness and the Brand Promise execution will be identified, and strategies will be developed with Transport Canada and other government departments as appropriate. AAFC will identify and prioritize regulatory constraints to industry innovation and competitiveness, and develop effective strategies to address them.

Promoting Canada as a preferred location to do business is therefore a critical component of AAFC's international activities. Accordingly, AAFC will continue to maximize investment potential of the Canadian agriculture and agri-food sector by addressing policy issues that affect the investment climate and by capitalizing on our research and development capacity.

Enhancing International Development

Significant progress has been made in applying an integrated, strategic approach to AAFC international development activities. Through continued execution of the China-Canada Agriculture Development Program, AAFC will build the regulatory and policy capacity of key Chinese agricultural agencies and help shape the institutions of the future agriculture and food market in China. AAFC will continue to deliver capacity-building in key agriculture policy areas, either to countries where this may contribute to resolving ongoing market access issues or to countries where this will contribute to the development of a mutually beneficial long-term agricultural relationship.

Fostering Science and Technology Linkages

Canada must broaden international science and technology work to enhance its knowledge-base and help to bridge the gap between domestic innovation and international commercialization.

In 2007-2008, the department will continue its efforts to brand Canada for its scientific excellence, provide science expertise to support Canada's markets and trade, address needs of developing countries, and fulfill its international obligations through intergovernmental science related agricultural organizations.

Emphasis for scientific co-operation will be with existing and emerging large economic countries such as the United States, Europe, China, and India, and with smaller targeted countries. AAFC will benefit from the international science co-operation by accessing international knowledge and technologies, providing opportunities for the adaptation of Canadian technology to international markets, increasing international confidence in Canadian products, and by facilitating the removal of technical barriers.

The CAFI program

Launched in April of 2003 to replace the Agri-Food Trade Program, the CAFI program features a range of activities aligned with the objectives of the APF. The program supports industry associations to deliver on long-term international strategies to gain and expand international recognition for Canada and enhance market opportunities for Canadian agriculture and food products. An important premise of the CAFI program is ensuring Canada is well-positioned to succeed in international markets, and respond to consumer demands and global competition.

In 2007-2008, the CAFI program will continue to support the sector's international branding and market development initiatives by funding activities that establish generic, sector-wide brands within and across product and commodity groups in established and emerging international markets.

The demands of the rapidly changing global marketplace are pushing research into innovative food products. The marketing of innovative products will maximize domestic investments made in science and research. The CAFI program is supporting the sector in its search for new market niches in order for Canada to maintain a competitive edge.

RURAL AND CO-OPERATIVES SECRETARIATS

Net Planned Spending and Full Time Equivalents - Rural and Co-operatives Secretariats

2007-2008		2008-2009		2009-2010
$ millions	FTE	$ millions	FTE	$ millions	FTE
27.0	173	10.9	173	10.9	173

Rural Development

Introduction

By creating the Canadian Rural Partnership (CRP) in 1997 to co-ordinate federal government action in rural Canada, the federal government explicitly recognized the importance of focusing its efforts to support rural Canadians.

The CRP is administered by AAFC's Rural Secretariat. The Secretariat coordinates a government-wide approach to rural citizen engagement in support of rural policy and program development and implementation. This approach addresses the challenges and issues of rural Canada through partnership initiatives among federal departments and agencies, other levels of government and rural stakeholders.

Operating Environment

Rural Canadians face unique challenges that include distance from urban markets, geography, low population density, and reliance on primary sector industries vulnerable to sharp, cyclical downturns, often related to globalization.

While parts of the rural economy are strong, significant challenges remain. Rural employment is growing slower than employment in urban Canada, and unemployment remains higher. Diversification and value-added growth is occurring, but much of the rural economy remains reliant on slower-growth, traditional, primary-sector industries - industries crucial to the Canadian economy as they account for 51 per cent of total exports and 21 per cent of the country's GDP.

Local, national and global forces - such as markets and changing environmental standards - have changed the nature of these resource-based industries, reducing labour requirements even as productivity levels grow, leaving many rural communities vulnerable.

On the social front, access to education and health care, an aging population, and youth out-migration are major challenges facing rural and remote areas.

Further, there are significant regional and local differences across rural Canada. Remote and northern communities face very different realities from those communities in Canada's heartland or near larger metropolitan areas. These differences cannot be ignored when responding to the challenges facing rural and remote communities.

Strategic Response

Since its inception nine years ago, the CRP has been researching and gathering information, developing policy directions and building support through its partnership initiatives with federal, provincial and territorial governments and rural stakeholders.

During the next fiscal year, the Rural Secretariat will build on the knowledge base and partnerships to develop policy options to enhance collaboration within the federal government, with other levels of government and with rural stakeholders, and to further develop evidence-based knowledge for informed decision-making, focusing efforts on the viability and sustainability of rural communities.

Strong rural voice

The engagement of citizens, stakeholders and networks has been undertaken to ensure a citizen-centred approach to rural development and to respond to rural concerns.

Since the CRP's launch in 1998, a variety of mechanisms have been used by the Rural Secretariat to strengthen citizen engagement and influence public policy development at all levels of government. Rural outreach activities (workshops, surveys, conferences) involving over 17,000 citizens from rural, remote and northern regions have been held across the country. This forum for reaching out to citizens has been beneficial to both citizens and government.

The Secretariat will continue to engage rural citizens and stakeholders, giving them an opportunity to provide input on their needs with respect to federal programs to build rural economic prosperity.

The Rural Secretariat will continue to develop partnership plans with key federal, provincial, territorial governments, regional partners, and aboriginals related to regional and national rural strategic objectives.

Working in partnership with other departments and agencies, the Secretariat will also take more deliberate action to ensure that government initiatives are communicated to rural citizens in a way that highlights their potential benefits to rural citizens and communities.

More informed decisions by governments and rural communities through evidence-based research and analysis and improved accessibility of information

The Rural Secretariat's research and analysis work will complement the knowledge gained from citizen engagement activities and provide evidence-based data to inform the policy development process. A key part of this work will be identifying and undertaking targeted research and analysis in areas of priority to the government and importance to rural Canadians.

The CRP will continue building and maintaining research networks. The National Rural Research Network will be used to raise the profile and awareness of rural research and the application of research results in rural areas. It will continue to work with other departments and research partners on studies and reports such as the Rural and Small Town Canada Analysis Bulletin.

The Models Program will finalize testing of approaches to rural development and community capacity building. Evaluations will be conducted to identify gaps and to determine whether or not it is beneficial to extend some of the models beyond 2007-2008. The Secretariat will continue to strengthen collaboration with resource-based departments and enhance local leaders' access to information concerning their communities in enhance the quality of decision-making.

The Secretariat will further develop a collective base of knowledge and information to support informed decision-making by governments and communities. The Secretariat has launched the Community Information Database (CID), a web-based tool that will provide communities and governments with consistent, reliable and accessible information on economic and demographic factors and indicators at the community level.

The Secretariat will provide collaborative research at the regional level, and disseminate research information (e.g. statistical and analytical products such as profiles, hosting seminars and learning events). This information sharing will provide useful analytical tools and approaches for informed decision-making for rural communities.

Research information will continue to be available through the rural Web site, the Canadian Rural Information Services (CRIS) , and Rural and Remote Canada Online. These tools provide access to information products of interest to rural Canadians including newsletters, toolkits, reports on dialogue activities, programs and information pathfinders.

Better coordination of government policy responses to community priorities

Recognizing that the challenges faced by rural communities are multi-dimensional and multi-jurisdictional, and that no one department and no government alone can fully address the issues faced by rural communities, the Rural Secretariat will continue to build partnerships across the federal government, and with the provinces and territories to better coordinate efforts for long-term rural community viability.

Currently, coordination among federal policy makers benefits from the Rural Development Network - a recently announced initiative that brings together policy and research practitioners from across federal departments to create a better understanding of the unique challenges of rural and remote Canada and to strengthen the capacity of the federal government to respond to the needs of rural Canadians.

The Rural Lens is a tool used to bring the rural and remote perspective to bear on federal government decisions. At the national level, rural and remote implications are highlighted for consideration when the government assesses the impacts of new federal initiatives. Over the next year, analysts will target major issues, such as Canada's aging population, and work with sponsoring departments and agencies to ensure that rural perspectives are integrated in national policy development work.

At the regional level, the Rural Secretariat provides leadership to thirteen Rural Teams comprised of representatives of the federal government, and in most cases, provincial or territorial government and/or sectoral stakeholders. Through their local presence and community interaction, Rural Teams are a valuable vehicle to satisfy rural citizens' demand for “one government” responsiveness at the local level.

The Secretariat will work with the Rural Team Canada network, to facilitate inter-jurisdictional collaboration at the regional level and greater integration of Rural Teams into rural policy activities.

This collaboration will contribute to raising awareness of rural issues, coordinating and facilitating the development of partnerships, dialogue activities and reports on key rural issues. Over the next year, the role of the Rural Teams will be reinforced through the development of action plans that focus on a number of community priorities.

Performance Measurement

Key performance indicators for the success of rural development on a national scale include:

• number of interdepartmental activities in one fiscal year;
• number of partnership arrangements with other federal departments, provinces and territories, and other stakeholders;
• creation of research and evidence-based knowledge regarding rural Canada, community capacity building and rural development; and
• usage of or reference to research and tools.

Benefits for Canadians

By ensuring a comprehensive and coherent understanding of the issues facing rural Canadians, the Rural Secretariat helps ensure that rural, remote and northern communities continue to benefit from government decisions that reflect their priorities and support them in addressing their challenges. Likewise, governments continue to benefit from gaining a better understanding of the issues and priorities of rural communities.

Better collaboration within governments and greater emphasis on decision-making through evidence-based research and analysis will lay a firm foundation for rural development, enhancing Canadians' access to opportunities to contribute to, and benefit from, Canada's prosperity.

Co-operatives Secretariat

Introduction

Co-operatives have historically been an important model for community development and one of the cornerstones of local economies across Canada. Today, with combined assets of over $225 billion and 155,000 employees, co-operatives help Canadians meet their social and economic needs in areas such as retail, banking, housing and service industries, as well as the agriculture and agri-food industry. Altogether there are over 9,200 co-operatives, credit unions, and caisses populaires across the country, engaging 70,000 volunteers providing services and products to over 11 million Canadians.

Since 1987, AAFC's Co-operatives Secretariat has been working across government to ensure that co-operatives are considered in the development and implementation of policies and programs. The Secretariat also works closely with co-operative sector partners, and is a centre of knowledge and expertise on co-operatives within Canada.

Operating Environment

Communities are facing important challenges while trying to provide essential services to residents. This is especially true in rural communities which are experiencing significant demographic pressures as a result of out-migration.

Pressures coming from the global business environment will still have an impact on Canadian co-operatives, which will require adequate financing (equity and debt) to remain competitive, foster innovation and improve productivity.

The issue of capitalization remains a challenge for many co-operatives, particularly agricultural co-operatives. Agricultural co-operatives are facing major challenges from two related factors: the need to attract new investment (particularly for new co-operatives) and the need to replace the capital of retiring farmer members.

Improving promotion and increasing awareness of the potential of the co-operatives model will be key to the creation and development of new co-operatives in the future.

Strategic Response

The Secretariat's work in 2007-2008 will help co-operatives meet their current challenges by concentrating on the following priorities:

Establish and co-ordinate a policy and research agenda to support co-operative development

The Secretariat will collaborate with the co-operative sector, federal departments and provincial/territorial counterparts to identify and prioritize research needs relating to co-ops, and develop and implement a research plan to address specific areas. It will collect and provide statistical information on co-ops in Canada in order to present an accurate perspective.

Developing and presenting policy recommendations for the renewal of the Co-operative Development Initiative will also be front and center for the Secretariat.

The Co-operatives Secretariat will continue to provide policy advice to the Minister of Agriculture and Agri-Food while seeking opportunities to promote and include the co-op model within the department's initiatives.

Develop programs and partnerships to promote, implement and support the co-operative model of enterprise

The Co-operatives Secretariat will continue to work collaboratively with the co-operative sector, federal departments and provincial/territorial counterparts, developing and maintaining relationships ensuring that program development and implementation address the identified needs for co-op development in Canada. Additionally, it will also work with the co-op sector to identify and address the sector's organizational and resource development needs.

The Co-operatives Secretariat will manage the final year of the CDI, including delivery of the Innovation and Research component and of the Advisory Services. It will also play an active part in the development of the proposal for renewal of the program.

The Secretariat will also take advantage of its 20^th anniversary to plan activities promoting the success of the co-op model

Performance Measurement

Key performance indicators regarding co-operatives include:

• number of partnerships established and maintained with sectoral organizations, other government departments, and provinces and territories;
• change in available research pertinent to co-operatives and co-operative development;
• use of or reference to research and tools; and
• number of co-operative initiatives supported by the CDI program.

Benefits for Canadians

The Government of Canada will enhance the capacity of co-operatives to contribute to the Canadian economic and social fabric with strategic investments made in partnership with the co-operative sector. New co-operatives will help respond to the current and emerging needs of citizens in areas such as access to health care and home care, rural economic development, value-added opportunities in agriculture, development of Aboriginal communities, integration of immigrants into Canadian communities and identification of community-based solutions to environmental challenges.

CANADIAN PARI-MUTUEL AGENCY (CPMA)

The CPMA is a special operating agency within AAFC that regulates and supervises pari-mutuel betting on horse racing at racetracks across Canada.

Regulatory Environment

Section 204 of the Criminal Code of Canada designates the Minister of Agriculture and Agri-Food as the individual responsible for the policy and regulatory functions pertaining to pari-mutuel wagering on horse races.

The CPMA regulates and supervises pari-mutuel betting on horse racing at racetracks across Canada, thereby ensuring that pari-mutuel betting is conducted in a way that is fair to the betting public.

Costs associated with the activities of the CPMA are recovered through a levy on every dollar bet on horse races in Canada. The levy is currently set at eight-tenths of a cent of every dollar bet. This levy constitutes the financial resource base that is the CPMA's Revolving Fund.

Strategic Response and Key Program Areas

CPMA's strategic plans are focused on maintaining the highest standards for pari-mutuel wagering and surveillance. The agency's key program areas include:

• pari-mutuel supervision;
• drug control;
• race surveillance; and
• research.

Net Planned Spending and Full Time Equivalents - CPMA

2007-2008		2008-2009		2009-2010
$ millions	FTE	$ millions	FTE	$ millions	FTE
0.0	65	0.0	66	0.0	67

Note:

Revenues and Expenditures are dictated by collecting a levy of eight-tenths of a cent on every $1.00 bet in Canada.

BENEFITS FOR CANADIANS

The rapid advances in science and technology present opportunities for increased prosperity and security in the Canadian agriculture and agri-food sector. Science and technology efforts will contribute to farm incomes being more stable and support an expanded agriculture and agri-food sector presence in the country's economy and in the lives of all Canadians. While science enables the economic gains, Renewal programs help producers keep pace with the rapid changes and benefit from the opportunities available within and outside the sector. Markets and international activities contribute to the vitality of the sector through branding Canada as a leader not only in innovative products, but also in meeting or exceeding consumer expectations regarding food safety and quality, and stewardship of the environment. They will also provide a secure and profitable climate for foreign investment and partnerships with Canadians.

Strategic Outcome 3: Innovation for Growth

Program Activity: Innovation and Renewal
Equipping the industry with new business and management skills, bioproducts, knowledge based production systems and strategies to capture opportunities and manage change

Commitments 2007-2008

• enhance the innovative capacity of the agri-food sector through support for strategy development and better opportunities to capture the benefits of science and innovation
• implement AAFC's Science and Innovation Strategy
• implement the newly established external peer-review process for the selection of departmental research projects and allocation of resources
• implement the new Agricultural Bioproducts Innovation Program
• develop and implement a national innovation co-ordination mechanism
• develop and implement a new investment model for innovation
• participate in the development of the Government of Canada's Science and Technology Strategy
• build national integrated science and innovation capacity through the establishment of clusters and networks involving government, academia, private sector, and not-for-profit organizations
• implementation of the Biofuels Opportunities for Producers Initiative
• implementation of the Canadian Farm Families Options Program
• work strategically with the sector to identify and enhance skills and learning opportunities needed to succeed in the increasingly knowledge-intensive economy
• continued implementation of the ACAAF program at the national and regional levels to respond to emerging issues and advance innovative ideas and approaches
• implement the recommendations of a mid-program assessment of Pillars II and III of ACAAF
• implementation of the Capital Formation Assistance Program
• implementation of the Agri-Opportunities Program

Expected Results

• funding support to organizations to develop sector-based, innovative, market focused strategies that utilize science to transform commodities into new value-added or bio-product opportunities for processors, producers and rural communities, and new life sciences products for consumers
• increased opportunities for the agriculture and agri-food sector in existing and new markets
• increased value for research investments through better alignment of research activities and resources with departmental, government and sector priorities
• increased research capacity to exploit Canada's natural advantage in biomass to develop new economic opportunities for agriculture in the areas of bioproducts and bioprocesses
• utilization of advances in value-added research that enable farmers, processors, rural communities, and service providers to differentiate their products and services
• improved co-ordination of national research efforts and resources along the innovation chain in priority areas of focus for the agriculture and agri-food sector
• increased co-operation among federal and provincial departments and agencies, academic, institutions, industrial organizations, and not-for-profit science and research entities
• market-responsive research collaboration among national players to accelerate the transformation of knowledge from the bench to the marketplace
• sound, well-documented business plans and feasibility studies, with significant producer ownership, developed which support the creation and expansion of the biofuel production capacity
• increased awareness and benefits of Renewal programs by providing the income support necessary for farmers to take advantage of the opportunity to increase their business management capacity and skills learning
• Canadian farmers increase their knowledge of business management practices
• Canadian farmers increase the use of tools available through renewal programming and services in order to increase profitability
• enhanced and integrated approach to Innovation and Renewal Policy
• Canada's agriculture and agri-food sector positioned at the leading edge to seize new opportunities
• ACAAF most effectively positioned to respond to new emerging issues while fostering innovative technologies
• increased farm equity investment in biofuels facilities
• agricultural producers more aware of consumer requirements for renewable fuel
• successful launch of the program
• increased market opportunities for the Canadian agriculture and agri-food sector which benefit primary producers
• enhanced industry competitiveness and prosperity though new and value-added areas of opportunity

Performance Indicators

• funded sector-led projects to implement alternative value-added strategies for existing commodities and new products and markets
• improved collaboration along value chains to identify risks, opportunities and new markets
• funded support for the development and start-up costs for centres of innovation and/or incubators or business mentoring
• Science and Innovation Strategy research implemented
• number of domestic and world agri-food research opportunities created
• increased contribution of bioproducts and value-added agricultural products by agriculture
• number of science and innovation clusters and networks established to bring together stakeholders to form complete innovation chains
• number of research agreements between AAFC and industry
• number of biofuels pilot projects funded with successful results and targets met
• number of Options payment recipients compared to total eligible per year.
• total value of payments issued per year
• percentage of Options payment recipients enrolled in Renewal programming
• percentage of Options payment recipients who have met their business and personal financial goals
• level of use of Renewal programs
• increased number of national, multi-regional (collective outcome), and regional Pillar I, II and III projects
• number of projects addressing current and emerging issues
• number of pre-commercialization activities
• number of policy dialogue events and market and trend studies
• number of biofuels facilities
• value of producers' investment in biofuels facilities
• number of new products, processes or services commercialized or being commercialized

Program Activity: Markets and International
Expanding international opportunities for the Canadian agriculture and agri-food sector

Commitments 2007-2008

• continue to support Canada's agriculture, food and seafood industry associations in their efforts to gain and expand international recognition for Canadian agriculture and food products
• leverage domestic improvements and capabilities and scientific excellence into a strong Canada brand, to achieve a more cohesive and positive image of the Canada brand among key market segments abroad
• continue to promote Value Chain Round Table (VCRT) and other collaborative mechanisms to foster a climate of collaboration and joint action among sectors
• refine and prioritize the Integrated Market Engagement Strategies to facilitate the increase of exports by Canadian companies of products into existing markets and their entry into new markets.
• develop an Investment Strategy for Innovation
• seek to leverage the implementation of the Specified Risk Material (SRM) Feed Ban into market access for ruminants and ruminant products
• continue to engage in activities directed at increasing Canadian exporters' readiness to take advantage of market opportunities
• co-operate with other federal departments and agencies, and apply an integrated and strategic approach to international development and cooperation, to gain increased recognition in targeted markets of Canada's leading expertise in sustainable agriculture, food safety, and business risk management
• in consultation with industry, guide AAFC engagement with the sector
• assess strategic infrastructure investments, identify transportation constraints, and develop strategies with Transport Canada and other government departments as appropriate
• continue to support Canada's agriculture, food and seafood industry associations in their efforts to gain and expand international recognition for Canadian agriculture and food products

Expected Results

• increased exports of Canadian agriculture and food products
• increased recognition of Canadian products and capabilities
• increased recognition of Canadian products and capabilities over the long term
• increased awareness of global market demands and opportunities, development and implementation of value chain strategies for each sector with established roundtables and industry engagement in the development of a Brand Canada strategy
• foreign markets engaged by focusing on highest potential Canadian agriculture and food products and investment prospects, in conjunction with government and industry partners, to build markets; and increase investment.
• perception of Canada as a leader in the development of certain advanced food technologies and agri-related biotechnologies is enhanced
• international market access to ruminants and ruminant products enhanced
• increased exports of Canadian agriculture and food products
• Canada's relations with developing countries strengthened to enhance and support bilateral trade and policy relations with an emphasis on agriculture and food products
• market development strategy for AAFC engagement with commodities sectors

Performance Indicators

• change in international market share of Canadian agriculture and food exports
• number of communications and marketing tools developed to facilitate integration of branding strategy into stakeholder planning and activities
• number of projects completed to facilitate integration of branding strategy into stakeholder planning and activities
• number of outreach meetings held and usage agreements signed to facilitate integration of branding strategy into stakeholder planning and activities
• industry satisfaction with VCRT meetings
• number of research projects completed in conjunction with industry to support strategic development
• partner satisfaction with investment promotion activities
• number of market development initiatives completed in priority markets
• market development activities aligned with strategic direction
• number of joint activities carried out to promote Canada as a leader in the development of advanced food technologies and agri-related biotechnologies
• key markets identify Canada as a preferential North American supplier
• key markets (Korea/Taiwan) previously closed to Canada but open to the US become open
• expansion of range of products eligible for export (SRM-free tallow to China, SRM-free MBM to Indonesia, over thirty month beef, under thirty month and over thirty month bone-in beef, live cattle)
• number of new documents posted on the Agri-Food Trade Service Web site
• number of regional exporter preparedness activities delivered
• number of capacity building training modules on food safety, business risk management and Agri-Environmental Policy delivered in target countries
• strategies in place for each commodity sector group in AAFC

Program Activity: Rural and Co-operatives Secretariats

Commitments 2007-2008

• build on existing knowledge base and partnerships to develop policy options to enhance collaboration within the federal government, with other levels of government and with rural stakeholders
• further develop evidence-based knowledge for informed decision-making, focusing efforts on the viability and sustainability of rural communities
• establish and co-ordinate a policy and research agenda to support co-operative development
• develop programs and partnerships to promote, implement and support the co-operative model

Expected Results

• better co-ordination of government policy responses to community priorities
• more informed decisions by governments and rural communities through evidence-based research and analysis and improved accessibility of information
• government policies, programs and services increase opportunities, mitigate barriers and enhance capacity for co-operative development
• increased capacity of co-operatives to meet the needs of Canadians

Performance Indicators

• Performance Indicators
• economic stability
• economic competitiveness
• social progress
• local institutional capacity
• number of partnerships established and maintained with sectoral organizations, other federal departments and provinces
• change in available research pertinent to co-operatives and co-operative development
• use of or reference to research and tools
• number of co-operative initiatives supported by the CDI program

Program Activity: Canadian Pari-Mutuel Agency

Enhancing CPMA's capacity to manage risk in pari-mutuel betting, thereby helping to protect the betting public against fraudulent activities

Note: Because the CPMA reports through the Minister of Agriculture and Agri-Food, and contributes to AAFC's Innovation for Growth strategic outcome, it is being included in this table with all other contributing program activities.

Commitments 2007-2008

• provide effective pari-mutuel supervision
• provide effective Drug Control Program and advance key research initiatives
• strengthen engagement with horse racing industry stakeholders, the betting public and provincial and international regulatory bodies
• advance Comprehensive Review of the Regulatory Framework

Expected Results

• confidence of the betting public in pari-mutuel wagering
• detection of performance-affecting drugs in horses
• policy development informed through domestic and international engagement
• direction established for the development of a modern, effective and efficient approach to regulating and supervising pari-mutuel wagering on horse racing in Canada

Performance Indicators

• tote tests conducted for all Tote Systems
• percentage of pari-mutuel pools audited
• number of samples analyzed
• research projects completed
• meetings conducted with domestic and international stakeholders to inform policy development
• key review milestones achieved

HORIZONTAL INITIATIVES

AAFC'S HORIZONTAL INITIATIVES

A “horizontal initiative” is an initiative in which partners, from two or more organizations, have agreed under a formal funding agreement (e.g. Memorandum to Cabinet, Treasury Board submission, federal-provincial agreement) to work toward the achievement of shared outcomes.

The objective of reporting on horizontal initiatives is to provide Parliament and the Canadian public and government with an overall picture of public spending and results achieved by departments working together.

Horizontal initiatives reported here are led by AAFC and have been either allocated federal funds that exceed $100 million (counting all federal partners) for the duration of the program, or allocated less than $100 million in federal funds but are still considered to be key to the achievement of government priorities, or have a high public profile.

Following is a summary list of horizontal initiatives for 2007-2008. More complete information on each initiative, including planned spending by our federal partners, is available on the Treasury Board Secretariat's Horizontal Results Database.

Horizontal Initiative Information for 2007-2008

1. Canadian Agricultural Income Stabilization program (CAIS)
2. Canadian Agricultural Skills Services (CASS)
3. Co-operatives Secretariat
4. Farm Business Services
5. MOU with Canadian Food Inspection Agency (CFIA) on Food Safety and Quality
6. AAFC-Department of Foreign Affairs and International Trade (DFAIT) MOU on Agri-Food Specialists Positions Abroad
7. MOU with Environment Canada (EC) on the National Agri-Environmental Standards Initiative (NAESI)
8. MOU with Health Canada (HC) on Food Safety and Quality and Environment
9. Production Insurance
10. Rural Development

SUSTAINABLE DEVELOPMENT STRATEGY

Introduction

AAFC's fourth Sustainable Development Strategy (SDS), titled Making Progress Together , was tabled in Parliament in December 2006. The focus of AAFC's fourth SDS is to enhance the integration of the three pillars of sustainable development - environmental, economic and social - through various initiatives. SDS IV builds on progress made in the department's third SDS, titled Sustainable Agriculture: Our Path Forward, which presented the APF as the departmental approach to sustainable development.

Our Approach

The department's SDS highlights the ongoing implementation of the APF and provides an examination of the progress towards sustainable agriculture in Canada. The strategy promotes the integration of the three pillars of sustainable development - economic, environmental, and social.

Through various initiatives, AAFC will strive to strengthen linkages between the three pillars to ensure a seamless approach to sustainable development. AAFC's fourth SDS illustrates how the department integrates sustainable development into decision-making and is intended to help lay the groundwork for the next generation of agriculture and agri-food policy.

SDS IV also contributes to federal sustainable development goals for clean water, clean air, reduced greenhouse gas emissions, sustainable communities, sustainable development and use of natural resources, and governance for sustainable development. The strategy also includes a chapter on how AAFC plans to further green its own internal operations by addressing federal priorities for greening operations and high priority areas specific to the department's own operations. It also contributes work to meet many of Canada's international commitments. As with previous strategies, much of the work under this strategy will involve collaboration with other federal departments, provincial and territorial governments and other partners.

Next Steps

In the 2007-2008 fiscal year, the department will continue to move towards the next generation of agriculture and agri-food policy. Through various initiatives to enhance the integration of the three pillars of sustainable development, the department will continue to further its efforts towards sustainable development.

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