ARCHIVED - Economic Development Agency of Canada for the Regions of Quebec

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Message from the Minister responsible for the Agency

I am pleased to submit the Report on Plans and Priorities 2010-2011 of the Economic Development Agency of Canada for the Regions of Quebec.

The global economy has been under severe strain over the past year. To support enterprises and workers and help the regions deal with this upheaval, the Government of Canada introduced unprecedented assistance measures. The challenges were considerable, but our rapid action to hoist the Canadian economy back on the rails has already borne fruit, particularly in terms of job maintenance and creation.

In implementing its Economic Action Plan, not only has the Government of Canada contributed to the economic recovery, it has also sent entrepreneurs a clear signal of its intention to support innovation and the development of sectors of activity conducive to the regions' outreach.

Already central to the Government of Canada's support for small and medium-sized enterprises, Canada Economic Development played a key role in the implementation of the exceptional recovery measures we introduced.

This Report describes how the Agency intends to pursue its mandate through its programs and initiatives over the coming year so as to foster the development of Quebec enterprises and communities. Once again, Canada Economic Development is working to meet the challenges posed by the economy and to provide its full support to the regions of Quebec.

The original version was signed by

Christian Paradis
Minister of Natural Resources and Minister responsible for the Economic Development Agency of Canada for the Regions of Quebec

Message from the Minister of State for the Agency

Since its creation, the Economic Development Agency of Canada for the Regions of Quebec has targeted its action on the basis of regional economic priorities and challenges, in line with Government of Canada priorities. In 2009-2010, the Agency was called upon to implement special measures to help Quebec enterprises and communities negotiate the troubled global economic waters.

More than ever, the Agency has played a leading role in supporting diversification, innovation and development of Quebec's regions. The Community Adjustment Fund and the Recreational Infrastructure Canada program are among the Economic Action Plan initiatives that have been added to our regular programming and have helped lessen the impact of the economic downturn on the regions.

Over the coming year, Canada Economic Development will build on its momentum to help communities consolidate their gains, diversify and continue to grow to their full potential. The priorities for action will be to: facilitate communities' adjustment to economic shocks; support the economy of tomorrow by strengthening SMEs' productivity and performance; support communities' development; and support regional economic development stakeholders' decision-making processes through implementation of the Regional Development Research program.

In targeting these priorities, the Agency, along with all its partners, will continue its support for the completion of projects whose impact will be beneficial for the stability and development of regional economies.

I invite you to read through this Report, which presents the Agency's priorities and expected results over the next fiscal year, in support of the economic vitality of Quebec's regions.

The original version was signed by

Denis Lebel
Minister of State for the Economic Development Agency of Canada for the Regions of Quebec

1 Agency overview

1.1 Summary information

1.1.1 Raison d'être

Object

Under its Act, which came into effect on October 5, 2005, the object of the Agency is to promote the long-term economic development of the regions of Quebec by giving special attention to those where slow economic growth is prevalent or opportunities for productive employment are inadequate. In carrying out its object, the Agency shall take such measures as will promote co-operation and complementarity with Quebec and communities in Quebec.

Vision

In the long term, Quebec's regions and communities will have increased their development capabilities, dynamism and prosperity in a significant, lasting manner for the benefit of their residents.

1.1.2 The Agency in action

The Agency aims to increase communities' vitality and reinforce the competitiveness of Quebec enterprises and regions. It covers all areas of Quebec through its 14 business offices and its advisors, and acts primarily in relation to small- and medium-sized enterprises (SMEs) and non-profit organizations (NPOs).

Through its regular programming, the Agency offers consulting and information services, and financial assistance. Whether a promoter is looking to fine-tune a business plan, action plan or project, or to put together a financing package and find funding sources, the Agency's advisors can guide him from the design stage of his project through to its execution. The Agency also acts in relation to communities by playing an active role in the mobilization, revitalization or development of a given sector or target area.

The Agency can also count on a network of federally funded development organizations across Quebec: 57 Community Futures Development Corporations located in designated rural regions; 10 Business Development Centres located in peri-urban areas; and 14 Community Economic Development Corporations located in disadvantaged urban areas.

Furthermore, Canada's Economic Action Plan (CEAP), tabled on January 27, 2009, provided the Agency with additional funding for fiscal years 2009-2010 and 2010-2011. Used as a short-term economic stimulus, this funding is intended to create employment opportunities and implement adjustment measures in communities affected by the economic downturn. In particular, CEAP includes the Recreational Infrastructure Canada (RInC) program and the Community Adjustment Fund (CAF) initiative.

The Agency funds Info entrepreneurs¹ in Montreal and Ressources Entreprises² in Quebec City—the two Canada Business Service Centres located in Quebec—which provide entrepreneurs with business information services and referrals to specialized resources.

1.2 Strategic outcome and Program Activity Architecture (PAA)

To reflect the approach to intervention more closely, the Agency's PAA has since April 1, 2010, combined its three strategic outcomes in a single one.³ This new wording accurately reflects the Agency's objective and has no impact on the nature of its activities. Thus, the framework of activities and related subactivities remains unchanged from the framework presented in the RPP 2009-2010. This year's Report sets out the plans and priorities in line with these components. Further information on the Agency's strategic outcome is given in Section 2.

1.3 Planning summary

This section provides an overview of planned human resources (expressed as full-time equivalents) and financial resources (grants and contributions, and operations), along with a summary chart portraying Agency planning for the next three fiscal years. Further information is presented in Section 2. Note that the financial tables reflect the measures announced in Canada's Economic Action Plan (CEAP), whose funds are aimed at reducing, in the short term, the impact of the economic downturn and supporting community recreational infrastructure projects.

For its strategic outcome and each of its program activities, the Agency has established results targets. But regional economic development largely depends, on the one hand, on local and regional enterprises and economic stakeholders who design and execute the projects it supports and, on the other hand, on the strength of the anticipated economic recovery. The business opportunities arising from the recovery will influence the quantity, scale, timetable and success rate of the projects the Agency supports.

Human resources planning is integrated with overall Departmental planning. To that effect, tools have been developed to help managers evaluate their current and future human resources needs, highlighting in particular the gaps that may exist between their current capabilities and their operational challenges as anticipated over the next three years. On completion of this yearly exercise, the Agency is therefore in a position to determine its priorities for action and corporate strategies with respect to hiring, promotion, succession management or further training. These strategies then guide managers in their decisions in such a way as to facilitate the attainment of objectives while motivating employees to harness their skills more effectively and facilitate their professional development.

Financial and human resources

Planning summary chart¹

Strategic outcome: A competitive and diversified economy for the regions of Quebec

1.4 Contribution of priorities to strategic outcome

The Agency has selected seven priorities for fiscal year 2010-2011: four program priorities, and three management priorities. These are in line with those presented in the Agency's Report on Plans and Priorities in 2009-2010.

Program priorities:

• Facilitate communities' adjustment to economic shocks
• Support the economy of tomorrow by strengthening SMEs' productivity and performance
• Support communities' development
• Support regional economic development stakeholders' decision-making processes.

Management priorities:

• Increase analysis and sharing of performance information
• Continue integrating risk management into decision-making
• Renew the Agency's policy directions.

Priorities represent the areas on which the Agency has decided to focus. It allocates part of its resources to them on the basis of the regions' new socio-economic challenges and Departmental results, and in response to new government priorities. The Agency's overall intervention is covered in Section 2, which presents total planned spending by program activity.

Overview of contribution of priorities to strategic outcome: A competitive and diversified economy for the regions of Quebec

Overview of contribution of priorities to strategic outcome: A competitive and diversified economy for the regions of Quebec (cont'd)

1.4.1 Program priorities

While a modest economic recovery is anticipated, the Agency must continue more than ever to support SMEs and communities. It intends to help them face the challenges of the economy of tomorrow by supporting the diversification of regional economies and the productivity and innovation capability of Quebec SMEs, and encouraging communities to take charge of their own development strategies.

Priority #1: Facilitate communities' adjustment to economic shocks

The economic situation remains particularly troubled in several Quebec regions, although a recovery has already begun in Canada and the results of Canada's Economic Action Plan (CEAP) are being felt. The Agency will thus pursue implementation of short-term CEAP initiatives, which aim to help Quebec communities through the crisis while mitigating its impact. These efforts to support the process of diversification of regional economies also translates into investment in necessary infrastructure.

The Agency will support regions and communities so they can diversify and develop new economic activities, by targeting the following areas:

• reduction of socio-economic difficulties for devitalized communities
  
  A number of communities, particularly those that depend heavily on natural resources, such as forestry and fishing, were hard hit by enterprises closing down. Already vulnerable, economic activity and the business climate in those communities deteriorated. In that context, the Agency intends to support local stakeholders in their structured approach toward economic recovery.

• support for communities affected by the economic downturn
  
  The Agency will continue to implement the Community Adjustment Fund (CAF) and the Recreational Infrastructure Canada (RInC) program in the regions of Quebec. These two CEAP measures constitute a response to the economic downturn and are aimed at creating short-term jobs.

Priority #2: Support the economy of tomorrow by strengthening SMEs' productivity and performance

To fulfil its regional economic development mandate, the Agency wishes to support projects likely to respond to the issues specific to the regions and SMEs, so as to create conditions conducive to sustainable growth and the competitive positioning of sectors and regions. Thus, to support the economy of tomorrow and strengthen SME's productivity and performance, the Agency intends to focus its action particularly on the following areas:

• commercialization of innovation
  
  The Agency will support projects likely to enhance enterprises' performance with respect to commercial promotion of technology and innovation, thus contributing to the creation of wealth and the enhancement of enterprises' productivity and competitiveness.

• value chain management
  
  The Agency will support projects likely to foster improved management of production, supply and distribution logistics in enterprises, thus contributing to the enhancement of enterprises' productivity and performance.

• creation of innovative enterprises
  
  The Agency will support projects likely to foster the pre-startup and startup of innovative enterprises, thus contributing to the development and consolidation of priority niches in the regions.

Priority #3: Support communities' development

To fulfill its regional development mandate, the Agency wishes to support the completion of projects likely to mitigate socio-economic adjustment difficulties and facilitate the economic diversification of Quebec regions and communities. The Agency intends to focus its action on the following areas in particular:

• creation and development of local and regional SMEs
  
  The Agency will assist communities through support for the creation and development of viable SMEs of local or regional scope, thus contributing to enriching the entrepreneurial fabric and increasing the number and quality of enterprises and entrepreneurs.

• enhancement of regional assets
  
  The Agency intends to increase communities' attraction capability through development of a distinctive tourism offering reaching beyond Quebec and the presence of community economic facilities, such as ferry wharves or intermodal stations, which enhance economic activity. Such action will help attract tourists and retain a skilled labour force.

Priority #4: Support regional economic development stakeholders' decision-making processes

Through this priority, the Agency is continuing its efforts to achieve the results of the Policies, programs and initiatives program activity.

In a knowledge economy, knowledge is a key factor in competitiveness for regions, communities and enterprises. Development issues are complex, and development agents require a shared understanding of the issues facing them in order to be able to work in a concerted manner and generate tangible, sustainable results.

The goal of the Regional Development Research program is to generate and disseminate knowledge on issues, problems and best practices in regional development. In the current economic context, this program reinforces capabilities for preparing the future. Its continued implementation will stimulate the sharing of knowledge and collaboration among decision-makers, experts and economic development organizations.

1.4.2 Management priorities

In early 2008, the Agency established a management plan that contributes to fine-tuning certain business practices to ensure sound management of public funds and report its results more effectively. The management priorities for 2010-2011 stem from this management agenda, in line with those previously mentioned in the Agency's Report on Plans and Priorities 2009-2010, since their implementation plans were spread over more than one year.

Priority #5: Increase analysis and sharing of performance information

Since the implementation of its new programs in 2007-2008, the Agency has considerably increased its ability to measure and monitor the performance of its grants and contributions projects.

The substantial progress achieved on this front means the Agency will have, from 2010-2011 onward, more accurate data that will enable it not only to continue measuring the overall performance of its program activities for reporting purposes, but also to support internal decision-making.

New information products on program performance will be developed and shared this year, so as for instance to:

• contribute to the reflection that will be taking place concerning the renewal of the Agency's policy directions
• support the establishment of strategic and operational results targets.

Beyond integration with decision-making, internal circulation of program performance data will foster greater control of results-based management throughout the Agency.

Priority #6: Continue integrating risk management into decision-making

In line with the sound management practices set out in the Agency's Management Accountability Framework (MAF), implementation of integrated risk management will be continued, at every level of the organization. This approach means the greatest risks are taken into account.

In line with the findings of the MAF evaluations, efforts will be made in 2010-2011 to address risks in decision-making processes more effectively and ensure viable practice of risk management. To that end, action will be taken on two levels:

• At the corporate level, where Departmental risk management will be integrated in particular with activity planning, decision-making and reports to Parliament;
  
  
• At the operational level, business processes incorporate the new requirements of the Policy on Transfer Payments in connection with risk management, and this will have the effect, in some cases, of lightening promoters' administrative burden.

Priority #7: Renew the Agency's policy directions

To be better able to help Quebec regions meet the challenges of the years to come, the Agency is to start reviewing its policy directions. This process involves rigorous analysis of the trends and development context of the next few years. These new policy directions will serve as the basis for the programming renewal scheduled for 2012.

1.5 Analysis of risks

External risks

In its desire to attain its results, the Agency has to have an overview of the changing factors that have a marked impact on its environment. In that way, it is able to integrate these changes into its decision-making processes so as to respond more effectively to the new needs of Quebec enterprises, regions and communities.

Since late 2008, the most significant external factor has been the deteriorating economic situation in Quebec, a direct result of the global financial crisis. The problems of the financial market led to a marked slowdown in Quebec exports, tighter credit and a decline in Quebec households' purchasing power. The manufacturing sector, accounting for 90% of the province's exports of goods, was especially hard hit. Slower growth was seen even in sectors enjoying sound competitive capability in the medium term.

More serious difficulties affected those sectors which had been experiencing competitiveness issues for the past 10 years or so (i.e., textiles, apparel, leather, wood products, printing and paper). The pulp and paper sector, struggling with a marked decline in U.S. newsprint consumption, was hard hit in the past year, with the closing of several mills in Quebec. The steep decline in residential construction in the U.S. especially affected Quebec's forestry industry. Finally, the consumer goods sectors, already under pressure from competition from emerging countries, also posted job losses.

The modest economic recovery anticipated for 2010-2011 will force economic agents to revise their strategies. In particular, households could continue to readjust their consumption of durable goods downward, while enterprises could continue postponing certain investments.

Internal risks

As to internal corporate risks, these are determined through a rigorous approach involving all Agency sectors along with senior management. It was in a perspective of evolving external and internal factors that the Agency drew up its corporate risk profile representing the sectors most likely to hamper the attainment of results. The mitigation strategies identified will be implemented in 2010-2011 to ensure that the impact of risks is reduced.

1.6 Expenditure profile

1.6.1 Spending trend

Canada's Economic Action Plan (CEAP) has a significant impact on spending trends. In fact, CEAP planned spending is $118.4 million and $194.5 million respectively for 2009-2010 and 2010-2011, on top of expenditures already budgeted for those two fiscal years.

As the spending trend curve shows, the Agency anticipates a gradual drop in its expenditures, aside from CEAP spending, from 2009-2010 to 2012-2013. In fact, planned spending falls from $307.6 million in 2009-2010 to $232 million in 2012-2013. This decline is primarily attributable to the termination of programs under mandates for which the Agency received dedicated funding (Infrastructure Canada Program and Canadian Apparel and Textile Industries Program) and the termination as of March 31, 2010 of $73 million in temporary funding received for five years.

1.6.2 Canada's Economic Action Plan

The 2009 federal budget gave the Agency $312.8 million in additional funding for fiscal years 2009-2010 and 2010-2011 under CEAP. Under the names Community Adjustment Fund (CAF), Recreational Infrastructure Canada (RInC) and Contribution program to supply the Municipality of Shannon with drinking water (Shannon), along with the funding awarded to the Physical Education and Sport Centre (PEPS) at Laval University and the Canada Business network, these short-term economic stimulus measures are intended to create job opportunities and support adjustment measures in communities hit by the economic downturn so as to help them find a new balance or economic stability.

1.7 Voted and statutory items

Note:

The Main Estimates 2010-2011 of $429.2 million are $141.7 million higher than in 2009-2010, primarily as a result of CEAP.

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