ARCHIVED - Federal Economic Development Agency for Southern Ontario - Report

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Minister's Message

The Government of Canada is committed to creating the conditions for jobs and economic growth. The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) is an important partner in this vision for returning to prosperity in southern Ontario.

That is why our government will continue to make targeted investments through this Agency. By investing in innovation, business and community development and economic competitiveness and diversification, FedDev Ontario puts into action our government's support for the specific needs of the people of southern Ontario.

In 2012-2013 year, FedDev Ontario will build on its successes to date and represent regional and community interests by continuing to invest in targeted projects across southern Ontario. FedDev Ontario will also work to strengthen existing partnerships while continuing to explore opportunities for new collaborations.

The Agency will remain committed to strengthening its capacity to create jobs and facilitate economic growth—building opportunities for people and businesses is central to guaranteeing Canada's future as a global competitor and ensuring a more prosperous future for all Canadians.

FedDev Ontario will continue to deliver on the next phase of Canada's Economic Action Plan by laying the groundwork for successful economic growth and diversification in southern Ontario.

It is my pleasure to present this year's Report on Plans and Priorities for the Federal Economic Development Agency for Southern Ontario.

The Honourable Christian Paradis
Minister of Industry
Minister of State (Agriculture)

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Minister of State's Message

As Minister of State for the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), I am pleased to submit the 2012¬2013 Report on Plans and Priorities. The report outlines how FedDev Ontario will work towards making the region's economy more competitive by delivering targeted investments through quality programs.

Since the Agency was formed, it has been helping individuals, communities and businesses position themselves to take advantage of opportunities as the economy prepares to recover in Canada and around the world.

The economy remains the top priority for the Canadian government and FedDev Ontario. The Agency will contribute to this goal in 2012-2013 by enhancing collaboration through programs like the Applied Research and Commercialization initiative. It will promote excellence in innovative programming as demonstrated by the Investing in Business Innovation initiative. It will also optimize its internal processes in order to deliver the best value for Canadians.

Our government remains focused on the individuals who live and work in our vibrant communities and maintaining the quality of living that we are so lucky to have. The next phase of the Economic Action Plan is creating jobs and growth in southern Ontario, so FedDev Ontario is committed to supporting a Southern Ontario Advantage by enabling people, innovators and businesses to work together and move ideas forward.

We will continue to deliver programs that aim to strengthen and diversify the southern Ontario economy, to ensure communities and businesses can innovate and the economy can continue to grow long-term.

The Honourable Gary Goodyear
Minister of State (Science and Technology)
(Federal Economic Development Agency for Southern Ontario)

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Section I: Organizational Overview

Raison d'être

The global economic recession had a significant impact in every region of Canada, including southern Ontario. As Canada's most populous region—home to more than 12 million residents living in 288 communities—southern Ontario's economy is a key contributor to the health of the Canadian economy as a whole. As a result, the Government of Canada created the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) with a five-year mandate, in 2009. To fulfill its mandate, FedDev Ontario supports the competitiveness, innovation, and diversification of southern Ontario's economy by: delivering strategic investments to businesses, non-profit organizations and communities; establishing and strengthening collaborative partnerships with key economic stakeholders; and representing the region's interests at the federal and national level.

Responsibilities

FedDev Ontario is responsible for responding to southern Ontario's economic challenges to help restore the region to a position of prosperity and place southern Ontario as an important driver in building a stronger Canadian economy.

Scope of Operations:

FedDev Ontario is headquartered in Kitchener and has offices throughout southern Ontario to support program delivery. Its mandate covers southern Ontario, as defined by the following 37 Statistics Canada census divisions:

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According to the 2011 Census, this area has a population of over 12 million, representing 93.5% of Ontario's total population and 35.9% of the total population of Canada.

Strategic Outcome and Program Activity Architecture (PAA)

To support its ongoing mandate and to continue delivering results for Canadians, FedDev Ontario has developed the PAA structure below for 2012–13. The Agency's strategic outcome of a competitive southern Ontario economy will be supported by four program activities: technological innovation; business development; community economic development and internal services to create the conditions for prosperity and provide new opportunities for jobs and economic growth in southern Ontario.

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Organizational Priorities

In its first years of operation, FedDev Ontario balanced the priorities of delivering national programs within southern Ontario and developing new initiatives to support the creation of a Southern Ontario Advantage. The Agency also focused on developing and strengthening its internal capacity, as well as strengthening relationships with stakeholders across the region.

To continue in this role and take advantage of successes to date, the following priorities have been identified to help guide programming and Agency decision-making.

Priorities to help guide programming and Agency decision-making

Priority	Type1	Strategic Outcome(s) and/or Program Activity(ies)
Enhancing collaboration and strengthening partnerships	Previously committed to	Program Activity 1.1 – Technological Innovation Program Activity 1.2 – Business Development Program Activity 1.3 – Community Economic Development
Description
Why is this a priority? Economic development in southern Ontario is multi-faceted with numerous and diverse parties of interest, so strengthening partnerships with stakeholders across southern Ontario is essential in identifying investment opportunities, leveraging funds, and supporting the Agency's mandate. During a period of fiscal restraint, collaboration and pooling of resources are especially important to help develop common economic sectors areas or “clusters” and achieve the most value for Canadians. Through these relationships FedDev Ontario will be recognized as a partner in strengthening the innovative sectors of the economy throughout the region and its communities. Plans for meeting the priority Continue outreach with specific stakeholder groups and other potential partners, including other levels of government, the private sector, universities and colleges, the non-profit sector, and residents of southern Ontario. Enhance FedDev Ontario's methods for tracking and sharing engagement activities, best practices, success stories and feedback to optimize interaction with future partners. Support the development of collaborative ventures and economic clusters across southern Ontario.

¹ Type is defined as follows: previously committed to—committed to in the first or second fiscal year prior to the subject year of the report; ongoing—committed to at least three fiscal years prior to the subject year of the report; and new—newly committed to in the reporting year of the RPP or DPR. Return to table footnote

Priorities to help guide programming and Agency decision-making

Priority	Type	Strategic Outcome(s) and/or Program Activity(ies)
Excellence in Innovative Programming	New	Program Activity 1.1 – Technological Innovation Program Activity 1.2 – Business Development Program Activity 1.3 – Community Economic Development
Description
Why is this a priority? FedDev Ontario must ensure that its programs and services are relevant and effective and continue to respond to the economic needs of the region and its communities. Quality programming will help attract new businesses and investors while supporting existing businesses to ensure they remain prosperous within southern Ontario. The move towards a more innovative economy requires ground-breaking programming that leverages new technologies, modernized business processes and advanced skill sets. Plans for meeting the priority Implement policy frameworks and research plans to help direct Agency programs and priorities. Assess the current drivers of economic development and work with stakeholders to determine opportunities to enhance Agency programming. Develop and implement performance measurement tools to demonstrate the effectiveness of FedDev Ontario's efforts to support a competitive southern Ontario. Maximize program operations and results through the implementation of performance-based funding agreements.

Priorities to help guide programming and Agency decision-making

Priority	Type	Strategic Outcome(s) and/or Program Activity(ies)
Optimizing Processes and Systems	Previously committed to	Program Activity 1.4 – Internal Services
Description
Why is this a priority? Building on existing processes will allow the Agency to evolve and better align itself to more effectively serve individuals, communities and businesses within the region. In the current period of fiscal restraint, maximizing the efficiency of existing processes and systems is necessary to continue ensuring the best value for Canadians. As technological advancements emerge, the Agency has an opportunity to refine and streamline its activities and achieve efficiencies. Plans for meeting the priority Continue to develop and refine internal monitoring and controls to enable a more risk-based approach to service delivery. Build on efforts to deploy advanced technologies including a client service management system to support outreach activities with partners. Improve coordination across all Agency areas, including those which support strategic decision-making, critical business decisions, and resource allocations.

Risk Analysis

External Risk Analysis

As the economy recovers and the Government of Canada shifts its focus to restoring fiscal balance, FedDev Ontario's operating environment continues to evolve. Canada weathered the global recession better than most other industrialized countries, but continuing uncertainty in the global economy could impact southern Ontario's ability to recover in the short-term.

A volatile dollar, elevated security concerns and the potential for increased protectionism, as well as mounting competition from emerging economies are some of the threats to the region's external operating environment going forward. A further challenge to southern Ontario and its industries is the access to capital required to enhance productivity and bring new products and services to market, which is essential to compete effectively in global markets.

As a result, southern Ontario businesses and entrepreneurs may need to look to collaboration and partnerships as a solution while also adopting new technologies and modernizing processes to take advantage of their capacity to innovate. Strategic decision-making and partnerships with private investors, post-secondary institutions, and government can provide the blueprint for moving away from traditional industries and towards a more innovative economy.

Over the longer-term, a key challenge will also involve building and retaining a workforce that will help to mitigate the risk of a potential skills shortage in southern Ontario. Without a productive, skilled, and available workforce to spur innovation and support competitiveness, the region's ability to drive innovation and bring products to market is at risk and its long-term economic sustainability will be affected.

Internal Risk Analysis

FedDev Ontario has made significant improvements over the last year to further develop its strategic direction and support its priorities through: a comprehensive strategy for stakeholder outreach; a formal approach to risk management; the development of a strategic policy framework; more targeted programming to maximize impacts and the renewing of two programs; and increased grants and contributions commitments.

The key internal risk factors and management challenges affecting FedDev Ontario include: ongoing demand and delivery pressures associated with program operations; the scope, complexity and diversity of programs; the burdens associated with accessing outside expertise through efficient procurement; and the need for an efficient system for stakeholder relationship management.

FedDev Ontario will work to mitigate these risks by focusing on optimizing its internal systems and processes to enable stronger linkages between the Agency and its stakeholders and support the continuous push for innovative and quality programming. FedDev Ontario is focused on reinforcing its financial management capacity through improvements to financial forecasting and reporting and strengthened internal financial controls. Communicating these changes to all areas of the Agency will be essential to ensuring their effectiveness and will allow for improved performance monitoring and a more strategic reallocation of resources as additional priorities emerge throughout the fiscal year. These efforts will support future decisions regarding Agency priorities and programming that will require reliable and quantifiable data to ensure that resources are being spent appropriately in this current period of fiscal restraint to ensure the best value for Canadians. In addition, the Agency's strategic policy framework will serve to guide FedDev Ontario in evaluating opportunities and in addressing delivery pressures.

Planning Summary

Financial Resources (millions of dollars)²

2012–13	2013–14	2014–15
218.8	218.3	15.4

²The reduced financial resource amount for 2014–15 reflects the sunsetting of numerous Agency programs as of March 31, 2014 (further detailed in the supplementary tables in Section III of this report). The status of program renewals is not yet known at the time of this publication. (return to table reference)

FedDev Ontario's financial resources for 2012–13 and 2013–14 reflect the Agency's anticipated spending for ongoing activities and service delivery until the conclusion of its current mandate. The reduction in financial resources for 2014–15 is due to the sunsetting of major programs and is made up of ongoing contributions and the costs for continued delivery of infrastructure projects, community-based programming and the associated internal support services.

Human Resources (Full-time equivalents – FTEs)³

2012–13	2013–14	2014–15
216	216	—

³No planned FTEs have been identified for 2014–15 as that period is beyond the Agency's current mandate. (return to table reference)

FedDev Ontario's human resource totals for 2012–13 and 2013–14 above represent the anticipated FTE positions that will be necessary for the Agency to support the achievement of its strategic outcome. At the time of publication the status of program renewals and FTE requirements for 2014–15 and beyond are not yet known.

Strategic Outcome: A competitive southern Ontario economy

Performance Indicator	Targets
Increase in Ontario Gross Domestic Product in comparison to similar economies*	Above average growth rate
Increase in the Ontario employment rate in comparison to similar economies*	Above average employment rate

* Similar economies include: Quebec, New York, Michigan, Pennsylvania, and Massachusetts (return to table reference)

Planning Summary Table
($ millions)

Program Activity	Forecast Spending 2011-12	Planned Spending			Alignment to Government of Canada Outcomes
		2012-13	2013-14	2014-15
Technological Innovation	28.2	51.0	52.1	0.2	An Innovative and Knowledge-Based Economy
Business Development	103.5	118.5	120.9	0.4	Strong Economic Growth
Community Economic Development	69.1	34.5	30.5	13.3	Strong Economic Growth
Total Planned Spending		204.0	203.5	13.9

Planning Summary Table
($ millions)

Program Activity	Forecast Spending 2011-12	Planned Spending
		2012-13	2013-14	2014-15
Internal Services	18.8	14.8	14.8	1.5
Total Planned Spending		14.8	14.8	1.5

Expenditure Profile

FedDev Ontario's planned spending for 2012–13 reflects the programs and internal services that will be necessary to support the achievement of its strategic outcome. For 2012–13 the Agency anticipates spending $188.9 million in contributions while requiring $29.9 million for operating costs to support program delivery and internal service areas.

The Southern Ontario Advantage (SOA) initiatives, which were launched in 2010–11, are administered through the Southern Ontario Development Program (SODP), which is the vehicle for delivering FedDev Ontario's core contribution budget in 2012–13.

Southern Ontario Advantage Initiatives:

• Applied Research and Commercialization Initiative
• Technology Development Program
• Investing in Business Innovation
• Prosperity Initiative
• Graduate Enterprise Internship
• Scientists and Engineers in Business
• Youth STEM (Science, Technology, Engineering and Mathematics) Initiative

FedDev Ontario will also deliver the Community Future Program (CFP), the Eastern Ontario Development Program (EODP) and the Economic Development Initiative (EDI) in 2012–13. In addition, the Agency will continue to focus on delivering infrastructure programs on behalf of Infrastructure Canada.

The following graph presents the progression of FedDev Ontario's total spending from its creation in August 2009 to the conclusion of its initial five-year mandate in March 2014. The total spending amounts in 2009–10 and 2010–11 represent funding for FedDev Ontario's ongoing programs as well as initiatives under Canada's Economic Action Plan (EAP). With the close-out of EAP initiatives in 2011-12, FedDev Ontario's forecast and planned spending reflect the core budget in support of its ongoing programs until 2013–14.

Spending Trends

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Estimates by Vote

For information on our organizational appropriations, please see the 2012–13 Main Estimates publication.

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