Archived — Departmental Performance Report 2015–16 — Revised

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The Honourable Navdeep Bains, P.C., M.P.
Minister of Innovation, Science and Economic Development

© Her Majesty the Queen in Right of Canada, as represented by the Minister of Innovation, Science and Economic Development, 2017

Catalogue No. Iu93-5E-PDF

ISSN: 2560-9114

PDF version

Table of Contents


Ministers' Message

We are pleased to report progress made on making Canada a world-leading centre for innovation, helping create good, well-paying jobs, and strengthening and growing the middle class.

The work of the Innovation, Science and Economic Development Portfolio includes promoting innovation; supporting the commercialization of more research and ideas; providing more Canadians with the skills to participate in a global and digital economy; helping small businesses grow through innovation, access to capital and trade; promoting increased tourism in Canada; and supporting scientific research and the integration of scientific considerations in our investment and policy choices.

This year, the Portfolio organizations continued their work to deliver on the Government’s Budget 2017 commitment to develop an Innovation and Skills Plan. The plan’s focus on people and addressing the changing nature of the economy is a focus for the Portfolio’s programs.

The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) is investing in southern Ontario to support the  creation of high quality jobs and the development of key clusters in the region, including information and communications technology, digital and life sciences, clean tech/biochemical, advanced manufacturing, and automotive. Communities are benefitting from FedDev Ontario’s strategic investments that build on regional competitive advantages, and from infrastructure investments across Ontario provided by the Agency in collaboration with its partners, including Infrastructure Canada and the Ontario Ministry of Agriculture, Food and Rural Affairs.

It is our pleasure to present the 2016–17 Departmental Results Report for the Federal Economic Development Agency for Southern Ontario.

Photo of the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development
The Honourable
Navdeep Bains

Minister of Innovation, Science and Economic Development
Photo of the Honourable Kirsty Duncan, Minister of Science
The Honourable
Kirsty Duncan

Minister of Science
Photo of the Honourable Bardish Chagger, Minister of Small Business and Tourism
The Honourable
Bardish Chagger

Minister of Small Business and Tourism and Leader of the Government in the House of Commons

Results at a glance

2016–17 Actual Spending 2016–17 Actual Full‑time Equivalents
(FTEs)
$222,135,836 226

For more information on the department’s plans, priorities and results achieved, see the “Results: what we achieved” section of this report.

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Raison d’être, mandate and role: who we are and what we do

Raison d’être

The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) was established in 2009 to support economic growth in southern Ontario through the delivery of federal programs and services.

In 2013, FedDev Ontario's mandate was renewed for a second five-year term, from 2014–15 to 2018–19. Budget 2013 provided the Agency with $920 million in core funding for this five-year period, with a renewed commitment to strengthen the region's capacity for innovation, entrepreneurship and collaboration; and to promote the development of a strong and diversified southern Ontario economy.

Mandate and role

As one of the federal departments and agencies within the Innovation, Science and Economic Development (ISED) portfolio, FedDev Ontario supports a number of the Government of Canada's priorities, including supporting the delivery of Canada's Innovation and Skills Plan; making strategic investments that build on competitive regional advantages; helping Canadian businesses grow, innovate and export in order to create good-quality jobs and wealth for Canadians; and working with stakeholders to leverage southern Ontario ‘s growing economic ecosystems so that innovation and entrepreneurship can thrive.

To achieve its mandate, FedDev Ontario delivers three core transfer payment programs designed to address specific opportunities and challenges facing the region: the Southern Ontario Prosperity Initiatives (SOPI), the Advanced Manufacturing Fund (AMF), and the Eastern Ontario Development Program (EODP). FedDev Ontario, like other regional development agencies (RDAs), also plays an important role as a federal delivery agent for national programs in southern Ontario—specifically the Community Futures Program (CFP), the Economic Development Initiative (EDI) and the Canada 150 Community Infrastructure Program (CIP 150). 

FedDev Ontario also delivers services at the regional level to firms and other stakeholders. For example, the Agency works with southern Ontario firms to identify opportunities to participate in defence procurement projects in support of the Industrial and Technological Benefits (ITB) Policy. 
The Agency operates Canada Business Ontario (part of the Canada Business Network), which helps entrepreneurs gain access to government business information, such as available funding opportunities. 

In 2016–17, FedDev Ontario established its role as one of the key partners in the Accelerated Growth Service (AGS) initiative, providing hands-on support for businesses with high growth potential. By giving identified businesses a one-window entry point to access all necessary government services and initiatives, AGS is fueling the establishment and expansion of high-growth firms in the region and better positioning southern Ontario for sustainable economic development.

Headquartered in Waterloo, FedDev Ontario has a presence across the region with offices in Toronto, Peterborough and Ottawa. The Agency facilitates collaboration with a range of stakeholders, including private sector firms, post-secondary institutions, not-for-profit organizations, municipal and provincial governments and Indigenous communities. A particular emphasis is placed on working closely with the Government of Ontario and key federal departments and agencies to support the southern Ontario economy. In addition, the Agency ensures that the perspectives of southern Ontario are reflected in decision-making at the federal level.

For more general information about the department, see the “Supplementary information” section of this report. For more information on the department’s organizational mandate letter commitments, see the Minister’s mandate letter.Footnote 1

Operating context and key risks

Operating context

Southern Ontario is a unique region and key contributor to the Canadian economy. The region represents about a third of Canada’s population, gross domestic product, employment and exports, and is home to a critical mass of small, medium-sized and multinational businesses. Southern Ontario is also home to key economic clusters, including automotive, finance, information communications technology (ICT), and life sciences, as well as a hub for emerging clusters such as cyber-security, artificial intelligence, regenerative medicine, and bio-based chemicals, among others. The region’s innovation ecosystem includes an educated labour force, numerous incubators and accelerators, world-renowned post-secondary institutions, aspiring entrepreneurs and business-savvy venture capitalists. All of these elements are the necessary components for growing the economy. Nearly half of all Canadian private sector research and development (R&D) is performed in Ontario, which helps position this region to capitalize on global opportunities.

Despite these factors, southern Ontario has not been immune to the pressures of the changing global economy. Similar to other advanced economies, the region continues to shift towards a growing service-oriented and knowledge-based economy. Many of the region’s traditionally strong industries, such as the manufacturing and automotive sectors, are in transition. Slower economic growth, competitive global markets and an uncertain global environment could potentially impact the ability of southern Ontario businesses to grow, innovate and export. For example, enhanced global integration and disruptive technologies are driving a continued evolution in the global manufacturing sector, and Ontario’s manufacturing-intensive regions face pressures from these structural changes. Manufacturers must increasingly remain on the forefront of technological innovation to remain competitive in a globally-integrated manufacturing sector.

Although southern Ontario leads Canada in R&D, the region still falls behind global comparators in business R&D, contributing to a commercialization gap. Challenges of relatively low productivity, underinvestment in machinery and technology, and limited availability of risk capital are also present in the region. Southern Ontario must improve its productivity, commercialization and innovation performance to compete on a global scale with the world’s diverse and highly-productive economies.

Regional prosperity is reliant on a number of key factors. Southern Ontario must increase its capacity to innovate, attract investment and talent to the region and develop a highly-skilled labour force. Strategic investments to support company growth and higher value-added industry activities need to be the norm more than the exception to reduce the commercialization gap. The region must capitalize on its innovation ecosystems and clusters to build collaborative partnerships among its key stakeholders and reach international markets.

FedDev Ontario’s programs and services continue to leverage the region’s ecosystem and competitive advantages to address these challenges. In 2016–17, FedDev Ontario’s investments and support through Canada Business Ontario (CBO) and activities such as Industrial Technological Benefits have assisted partners in the region in driving clean-economic growth, while supporting companies’ ability to scale-up, increase productivity and access new markets. These investments have helped the people of southern Ontario gain the skills they need to succeed in increasingly complex and technical work environments; supported the development of world-leading innovations and technologies through consortia and clusters; and have invested in projects that create well-paying jobs. Budget 2017 introduced Canada’s Innovation and Skills Plan as the centerpiece of the government’s agenda for growth, jobs and strengthening the middle-class. FedDev Ontario’s programs and services are well positioned to support both the Innovation and Skills Plan and the ambitious targets set out in Budget 2017 around the key themes of: research, technology and commercialization; investment and scale-up; and clean technology.

Key risks

In 2016–17, FedDev Ontario identified three key risks to the effective delivery of its mandate: managing information; human resources management; and demonstrating Agency impacts.

FedDev Ontario recognizes the importance of having information technology and information management systems and infrastructure that are sufficiently integrated and/or adaptable to support client/user needs and program/business processes. Not having access to timely, complete, consistent and accurate information could affect the Agency's ability to meet legislative responsibilities and could diminish its organizational efficiency and effectiveness, as well as the quality of its decision-making. In 2016–17, FedDev Ontario continued to implement information management systems and practices in support of effective information management, openness and transparency. This included the completion of the Recordkeeping Implementation Action Plan on March 31, 2017 and the continuation of the Open Government Implementation Plan, scheduled to be completed in October 2019. The Agency also collaborated with other federal partners on the development of a Grants and Contributions Program Management (GCPM) system that is on-track for delivery by March 2019.

FedDev Ontario is a young and geographically dispersed organization, headquartered in the dynamic Region of Waterloo which offers many diverse employment opportunities. The Agency is experiencing higher staff turnover rates than the Public Service average. In 2016–17, FedDev Ontario increased its use of post-secondary recruitment programs as well as its social media presence to strengthen recruitment and retention, and to continue to promote the Agency as a workplace of choice. In 2016–17, FedDev Ontario provided co-op terms to 11 post-secondary students, leveraging their skills while providing valuable work experience, and developing a pool of potential future employees. The Agency also increased its use of social media—Twitter, LinkedIn and Instagram—to advertise external staffing posters. In an effort to proactively prepare for staffing needs, more than 40 pools were in place to allow for quick and effective staffing.

FedDev Ontario also continued to focus attention on assessing and demonstrating the impact it has had on southern Ontario. The Agency regularly engaged with stakeholders and economic development partners through meetings and roundtables to discuss emerging economic issues and trends, seek input on policy and program directions, and align investments with partners on strategic projects that have the potential for high economic impact. FedDev Ontario also partnered with Statistics Canada to assess the impact on firms to which it has provided support. Multiple initiatives to demonstrate impacts on key clusters, sectors and communities in southern Ontario, were finalized in 2016–17 and will be important inputs to supporting FedDev Ontario's renewal beyond 2019. For example, analysis conducted with Statistics Canada showed that the Agency’s funding recipients generally outperform similar non-recipient businesses in terms of employment growth (6%), revenue growth (10%), productivity (4% and 17% for productivity-focused programming) and spending on R&D (22%). 

Key Risks
Risks Mitigating strategy and effectiveness Link to the department’s Programs Link to mandate letter commitments or to government‑wide and departmental priorities
Managing Information
  • The Recordkeeping Action Plan was successfully completed on March 31, 2017. Progress continued to be made on the implementation of the Open Government Action Plan and the Agency is on target for a scheduled completion by October 2019.
  • Continued to work collaboratively across the Agency to ensure that business needs are adequately supported through existing IT infrastructure and systems. The Agency's Open Government Working Group provided a cross-Agency forum to ensure dissemination of information and consistency in approach to dataset inventory and data publication approach.
  • Further institutionalized related information management practices to ensure information for decision-making is disseminated in a timely manner and is quickly accessible for all employees. Focus in 2016–17 was on training and awareness, including consistent Performance Management Agreement objectives for all employees on information management and Agency-wide learning events.
  • Partnered with regional development agencies across Canada on the shared development of the Grants and Contributions Program Management (GCPM) system as a modern system for managing grants and contributions (G&Cs). Began internal work around data management and governance in preparation for the implementation of this new system in 2018–19.
  • Technological Innovation
  • Business Development
  • Community Economic Development
  • Internal Services
  • Strengthening the middle class
  • Fostering an innovative and clean economy
  • Making strategic investments that build on competitive advantages
  • Supporting the Development of the Open Data Initiative
Human Resource Management
  • Agency managers have been proactively preparing for their staffing needs by creating pools of qualified individuals at various classification levels to allow for quick and effective staffing. By the end of fiscal year 2016–17, more than 40 pools were in place including pools which support hiring for positions in specialty areas.
  • Outreach for student hiring was conducted at 4 post-secondary institutions and 11 students were hired.
  • Increased the Agency’s use of social media—Twitter, LinkedIn and Instagram to advertise external staffing posters.
  • In the past 12 months, 100% of FedDev Ontario’s employees accessed Canada School of Public Service (CSPS) products. As provided by CSPS Learning Indicator Report (June 2017 Release), employees have maximized their use of the online learning resources available through CSPS.
  • The Agency fully utilized its allocation for seats on the CSPS Manager’s Development Program and Aspiring Director Program. New Executives at all levels are encouraged to attend the leadership course commensurate with their level.
  • A Wellness Committee was established.
  • Technological Innovation
  • Business Development
  • Community Economic Development
  • Internal Services
  • Strengthening the middle class
  • Fostering an innovative and clean economy
  • Making strategic investments that build on competitive regional advantages
Demonstrating Agency Impacts
  • In 2016–17, the Agency organized and held 9 roundtables with stakeholders from 10 industry sectors to discuss needs for programming support.
  • Various initiatives in support of demonstrating the Agency’s impacts on the southern Ontario economy were completed in 2016–17, including: matching analysis work with Statistics Canada; input-output modelling with the Conference Board of Canada; and a review of the impact of FedDev Ontario’s investments in consortia.
  • Technological Innovation
  • Business Development
  • Community Economic Development
  • Internal Services
  • Strengthening the middle class
  • Fostering an innovative and clean economy
  • Making strategic investments that build on competitive regional advantages

Results: what we achieved

Programs

Program 1.1 $Technological Innovation

Description

The Technological Innovation program supports the southern Ontario economy by encouraging the creation of innovative products, services, processes and markets so as to contribute to the region’s competitiveness. This is achieved by focusing on key sectors and clusters and by strengthening linkages between the region’s businesses, post-secondary institutions and not-for-profit organizations to leverage key regional assets and spur the advancement of transformative technologies and innovation. By facilitating these strategic partnerships, FedDev Ontario aims to improve the region’s productivity, competitiveness and attractiveness as a location of choice for investment.

Investments through this program support large-scale, incremental and transformative activities that increase productivity and market diversification. While available to for-profit and not-for-profit organizations, project funding is business-facing, meaning that activities are linked to the needs of businesses.

Transfer payments in support of this program are delivered through the administration of contribution agreements with businesses, not-for-profit organizations and post-secondary institutions.

Results

This program consists of activities and investments made through the Investing in Commercialization Partnerships (ICP) initiative and the Advanced Manufacturing Fund (AMF). In 2016–17, FedDev Ontario approved five new projects valued at up to $63.2 million across ICP and AMF. These investments, along with 15 previously approved projects, contribute to innovation and the commercialization of technologies and market-driven solutions in priority sectors, including several key growth industries: advanced manufacturing, agri-food, clean technology, digital industries and health and bio-sciences. New projects approved in 2016–17 are expected to enable more than 140 products, services, technologies and processes to be commercialized; create more than 165 partnerships; and leverage more than $91.8 million in additional investment over the next two years.

Efforts have been focused on engagement with recipients to monitor progress toward program outcomes and regular discussions with regional stakeholders to identify new project opportunities that will strengthen technological innovation and adoption.

With up to $7.3 million in multi-year funding from FedDev Ontario’s ICP initiative, Niagara College has established the Southern Ontario Network for Advanced Manufacturing and Innovation (SONAMI) in collaboration with McMaster University, Sheridan College and Mohawk College. This Network is helping small manufacturers create and/or improve innovative products, processes, materials, and services in advanced manufacturing to enhance their competitiveness. To date, SONAMI has enabled the development and commercialization of over 40 products and services.

Results achieved table 1
Expected results Performance indicators Target Date to achieve target 2016–17
Actual results
2015–16
Actual results
2014–15
Actual results
Strengthened innovation, partnerships and commercialization in southern Ontario Share of Ontario’s employment in Knowledge‑Intensive Business Services (KIBS)Footnote 1 The share of Ontario’s employment in KIBS increased in 2016 compared to 2015 March 31, 2017 6.48% 6.47% 6.37%Footnote 2
Business enterprise expenditure on R&D Strengthen private sector investment in R&DFootnote 3 March 31, 2017 Not available Not available Not available
Budgetary financial resources (dollars)
2016–17
Main Estimates
2016–17
Planned spending
2016–17
Total authorities available for use
2016–17
Actual spending
(authorities used)
2016–17
Difference
(actual minus planned)
92,081,080 92,081,080 87,487,194 79,228,401 (12,852,679)
Human resources (full-time equivalents)
2016–17
Planned
2016–17
Actual
2016–17
Difference (actual minus planned)
19 19 0

Program 1.2 Business Development

Description

The Business Development program supports southern Ontario businesses, especially small- and medium-sized enterprises (SMEs) in their efforts to drive competitiveness. The program provides support to: encourage the growth of early-stage companies through business services and counselling; provide access to capital; help existing businesses expand domestically and globally; help companies and sectors improve productivity; facilitate linkages and collaborations between businesses; and assist southern Ontario aerospace and defence-related firms in responding to respond economic opportunities from Canada’s defence procurements.

Canada Business Ontario (CBO), included as part of this program, provides targeted services to businesses across Ontario along a lifecycle continuum—from entrepreneurship to expansion.

Transfer payments in support of this program are delivered through the administration of contribution agreements with businesses and not-for-profit organizations.

Results

The Business Development program includes FedDev Ontario’s Investing in Business Innovation (IBI) and Investing in Business Growth and Productivity (IBGP) initiatives. During 2016–17, these initiatives continued to strengthen angel networks in southern Ontario, support southern Ontario businesses to access capital and develop employee skills, and improve business productivity and performance.

Through the IBI initiative, a total of 13 contribution agreements were executed in 2016–17 for projects with a funding total value of more than $14.8 million. These contributions will enable early-stage companies to leverage angel and venture capital to support the launch of innovative technologies, products and services. The investments also support not-for-profit organizations that provide seed financing and skills development to early-stage companies, allowing them to commercialize and become investment ready.  

The IBI initiative continued to receive strong interest from key stakeholders within regional innovation ecosystems, start-ups and established companies, as demonstrated by the large volume of applications from the ICT, life sciences and clean-tech sectors.

Through IBI, funding was provided to Communitech, an industry-led innovation centre that supports technology companies, located in Kitchener. Communitech is receiving up to $880,000 over two years to directly support women’s entrepreneurship through the Fierce Founders Accelerator Program, a specialized program for women in technology industries. The program will provide approximately 20 high-potential women-led early-stage businesses with seed funding, free workspace at Communitech for a six-month period, and business training/mentoring services to help accelerate the growth of these businesses. The project is expected to create up to 30 full time jobs.

The IBGP initiative focuses its resources primarily on supporting established businesses, as well as not-for-profit organizations that assist southern Ontario SMEs, to improve business productivity and global competitiveness. During 2016–17, the Agency executed funding agreements for 10 new IBGP projects. The majority of IBGP’s projects have supported companies expanding their manufacturing facilities and capabilities, and all have helped position firms to be more globally competitive.

Demand for IBGP programming has remained strong. Investments have been made across traditional and emerging industry sectors, with all geographic regions across southern Ontario represented. Growth in advanced manufacturing, with a particular focus on clean economic growth and greater efficiencies in processes and product development, is facilitating innovation-driven growth for SMEs within southern Ontario’s economy. These growth opportunities are allowing southern Ontario SMEs to be further integrated into global supply chains and seek new investments in technologies and equipment.

Through IBGP, funding was provided to Stanpac Inc. of Smithville, Ontario. FedDev Ontario’s investment of up to $4.5 million, has allowed the company to move forward with expansion plans that include acquisition and adoption of new equipment and machinery that will enable greater efficiencies and the addition of four new product lines to its existing food and beverage packing operations. The investment will also further production efficiencies and contribute to more environmentally friendly operations, allowing for a smaller carbon footprint. With the support of FedDev Ontario, Stanpac Inc. has created 50 new full-time production jobs and expanded markets for its products.

Stanpac Inc. testimony: FedDev Ontario success story map

To extend IBGP’s reach across southern Ontario and provide smaller scale investments, FedDev Ontario has provided contributions to the Yves Landry Foundation and Canadian Manufacturers and Exporters to deliver support to SMEs. Both organizations have a history of successfully delivering productivity improvement and global competitiveness initiatives to SMEs. Since 2014–15, these two organizations have supported 382 projects with a total FedDev Ontario investment of more than $19 million, which leveraged an additional $90.7 million in private sector investments.

In Budget 2016, the Government of Canada announced the Accelerated Growth Service (AGS), a new initiative through which established high-growth firms are offered information and potential access to relevant federal and/or external programs and services intended to help with specific growth objectives. Working with one point of contact across a network of federal government departments and agencies, firms can navigate and access programs and services in a coordinated and comprehensive manner that is tailored to their needs. Over the 2016–17 fiscal year, FedDev Ontario worked with its AGS government counterparts to connect more than 45 high-growth firms with government programs and services available in the region.

The Agency also provides targeted services to businesses and helps southern Ontario aerospace and defence-related firms respond to economic opportunities from Canada’s defence procurements.

As a member of the Canada Business Network, Canada Business Ontario (CBO) supports entrepreneurs in starting, managing or growing small- to medium-sized businesses by providing information on federal and provincial programs, services and regulations, free of charge. CBO has three main service channels: contact centre services, information/web presence, and outreach. In 2016–17, CBO’s contact centre fielded 24,300 telephone and/or email enquiries from the public, and visits to CBO-related web content exceeded 1.7 million. CBO also engaged in 3,535 direct interactions with entrepreneurs through outreach activities. 

FedDev Ontario leveraged economic benefits for southern Ontario from Canadian defence procurements consistent with the Government of Canada’s Industrial and Technological Benefits Policy. In 2016–17, FedDev Ontario held 147 meetings with firms in the region, as well as 50 meetings with major defence contractors. The Agency responded to seven separate requests from defence contractors for the identification of possible southern Ontario suppliers and 34 introductions were brokered for southern Ontario firms with major defence contractors. The Agency promoted southern Ontario at 12 trade shows/events, developed and led 5 supplier identification tours for major defence contractors, and organized 3 industry events highlighting defence procurement-driven business opportunities. The latter included a highly successful cyber forum in Ottawa, which brought together over 200 representatives from Canadian and global industry, as well as representatives from 3 orders of government to discuss and share insights on the latest trends and business opportunities in cyber security and defence.

Results achieved table 2
Expected results Performance indicators Target Date to achieve target 2016–17
Actual results
2015–16
Actual results
2014–15
Actual results
Improved business growth, productivity and global competitiveness in southern Ontario Private sector investment in machinery and equipment in Ontario To support businesses in meeting or exceeding their previous year investment levelsFootnote 1 March 31, 2017 Results ($21.8 billion) indicate that business investments in machinery and equipment in Ontario decreased in 2016 by $500 million, but were still higher than 2014–15 levels Results ($22.3 billionFootnote 2) indicate that business investments in machinery and equipment in Ontario increased in 2015 by $3.8 billion Results ($18.5 billionFootnote 2) indicate that investments in machinery and equipment in Ontario increased in 2014 by $900 million
Ontario’s labour productivity $46.44 per hour March 31, 2017 $47.20 per hour $46.60Footnote 3  per hour $47.20Footnote 3 per hour
Venture capital investment in Ontario Increased venture capital investment in Ontario March 31, 2017 Results ($1.5 billionFootnote 4) indicate that venture capital investments in Ontario increased in 2016 compared to 2015 ($933 million) Results ($933 million) indicate that venture capital investment in Ontario increased in 2015 compared to 2014 ($932 million) Not availableFootnote 5
Budgetary financial resources (dollars)
2016–17
Main Estimates
2016–17
Planned spending
2016–17
Total authorities available for use
2016–17
Actual spending
(authorities used)
2016–17
Difference
(actual minus planned)
58,571,582 58,571,582 63,196,539 63,173,971 4,602,389
Human resources (full-time equivalents)
2016–17
Planned
2016–17
Actual
2016–17
Difference (actual minus planned)
51 55 4

Program 1.3 Community Economic Development

Description

The Community Economic Development program supports the 288 communities (small and large, rural and urban, Francophone and Indigenous) in southern Ontario that are home to more than 12 million residents. These communities are key to enhancing the economic growth and sustainability of the region. Southern Ontario depends on communities that can attract the best talent and compete for investment as dynamic centres of commerce and learning.

Strong, safe and modern communities that are economically diverse are essential building blocks for the region’s competitiveness and long-term prosperity. FedDev Ontario makes strategic investments that build on competitive regional advantages within these communities. These investments help address the unique challenges facing eastern Ontario communities, maintain the economic vitality of Official Language Minority Communities, and advance regional diversification efforts to promote economic development. FedDev Ontario also works with its partners, including Infrastructure Canada and the Ontario Ministry of Agriculture, Food and Rural Affairs, to deliver infrastructure investment across Ontario.

Through programming aimed at addressing the distinct needs and circumstances across southern Ontario communities, FedDev Ontario works to identify local solutions to local challenges and opportunities.

FedDev Ontario supports this program through the administration of contribution agreements with funding recipients such as businesses, not-for-profit organizations, First Nation governments, post-secondary institutions and municipalities.

Results

Through the Community Economic Development program, FedDev Ontario provided funding in 2016–17 to help communities in southern Ontario build on competitive regional advantages, create opportunities for economic diversification, support high-quality employment and address critical infrastructure requirements. Programming has supported rural, eastern, Francophone and Indigenous communities in southern Ontario to address distinct economic challenges through direct funding and third-party delivery partners.

Under the Community Futures Program (CFP), FedDev Ontario continued to support rural and Indigenous communities in southern Ontario in 2016–17. Working through contribution agreements with Community Futures Development Corporations (CFDCs) to support their operations, local businesses took advantage of continued access to business counselling and loan services in the region, which resulted in 723 new loans by CFDCs to SMEs in 2016–17 valued at $45.1 million. Through these loans and associated business counselling services, the CFP was able to assist 4,743 businesses and aid in creating 3,973 jobs while maintaining another 6,809 jobs in rural southern Ontario communities. The CFDCs and their networks were also able to leverage approximately $4.00 for every dollar contributed by FedDev Ontario. In addition, FedDev Ontario continued to collaborate with CFDCs in southern Ontario to further strengthen their capacity and impacts within their communities.

In 2016–17, FedDev Ontario also provided community support through an investment of $9.6 million under the Eastern Ontario Development Program (EODP). Through agreements with the 15 eastern Ontario CFDCs, $7.5 million was invested in local projects to promote the growth of new and existing businesses and advance community-led economic development to enhance and diversify local economies. An additional $2.1 million was delivered by the Northumberland CFDC in Collaborative Economic Development Projects (CEDP) which leveraged $834,030 in funding from external partners. The CEDP focused on strategic projects that provided long-term economic benefits for multiple communities and strengthened linkages between rural and urban areas.

In 2016–17, through the Economic Development Initiative (EDI), FedDev Ontario continued to address the challenges faced by Francophone communities in southern Ontario, such as barriers to accessing training and business information in French, and youth out-migration in rural Official Language Minority Communities. There were four active EDI projects in 2016–17, with a total investment of $979,612 and a focus on promoting increased collaboration among community stakeholders. These projects are improving access to business and entrepreneurship services and training, increasing access to capital, providing internship experiences for Francophone youth, and supporting applied research partnerships for new and existing Francophone entrepreneurs.

Through the Investing in Regional Diversification (IRD) initiative, FedDev Ontario continued to make strategic investments to help southern Ontario communities leverage their economic strengths and local assets to promote economic diversification and sustainability. To this end, FedDev Ontario approved four new projects through IRD in 2016–17 with a total multi-year investment of $27.8 million, to help communities leverage their economic strengths and unique assets to take advantage of emerging opportunities.

With up to $12 million in multi-year funding, Bioindustrial Innovation Canada is supporting the transition of the Sarnia-Lambton region from a reliance on traditional petro-chemicals to the development of a sustainable chemistry and bio-based industrial sector. Through the establishment of its Centre for Commercialization of Sustainable Chemistry Innovations, Bioindustrial Innovation Canada is providing critical strategic investment, advice and services to business for the development of clean, green and sustainable technologies. The investment is expected to create 478 full-time equivalent jobs and result in 250 new industrial collaborations, especially among small- and medium-sized businesses.

FedDev Ontario continued its commitment to strengthening regional competitiveness through investments in public infrastructure in Ontario communities. FedDev Ontario administered the Canada 150 Community Infrastructure Program in southern Ontario, which is investing an additional $44.4 million through a second intake of the program, for a total investment of up to $88.8 million by March 31, 2018. In 2016–17, FedDev Ontario worked closely with its partners, including Infrastructure Canada and the Ontario Ministry of Agriculture, Food and Rural Affairs, to complete close-out activities for the Building Canada Fund – Communities Component Regular Intake, and to ensure that final reporting requirements were met for all completed projects. In addition, FedDev Ontario continued its support to the Massey Hall Revitalization Project, with a multi-year federal investment of up to $8 million, of which $2.46 million was invested in 2016–17. This support will help to transform the historic landmark theatre into a modern performance venue.

Results achieved
Results achieved table 3
Expected results Performance indicators Target Date to achieve target 2016–17
Actual results
2015–16
Actual results
2014–15
Actual results
Southern Ontario communities are able to sustain long-term economic development and growth Percentage of southern Ontario census subdivisions (CSDs) with a decrease in employment insurance beneficiaries (year-over-year) 50% or more southern Ontario census subdivisions have a decrease in employment insurance beneficiaries (year-over-year) March 31, 2017 68.1% of southern Ontario CSDs had a decrease in employment insurance beneficiaries 65.3%Footnote 1 of southern Ontario CSDs had a decrease in employment insurance beneficiaries 61.5%Footnote 1 of southern Ontario CSDs had a decrease in employment insurance beneficiaries
Recent Economic Well‑Being Indicator (REWBI) (composite indicator of socioeconomic performance) The average REWBI for the bottom quartile of communities improves in 2016 compared to the average REWBI for the bottom quartile in 2015 March 31, 2017 The average REWBI for the bottom quartile of communities improved in 2016 compared to the average REWBI for the bottom quartile in 2015 The average REWBI for the bottom quartile of communities improved in 2015 compared to the average REWBI for the bottom quartile in 2014Footnote 2 The average REWBI for the bottom quartile of communities decreased in 2014 compared to the average REWBI for the bottom quartile in 2013Footnote 2
Budgetary financial resources (dollars)
2016–17
Main Estimates
2016–17
Planned spending
2016–17
Total authorities available for use
2016–17
Actual spending
(authorities used)
2016–17
Difference
(actual minus planned)
66,896,145 66,896,145 89,373,369 63,417,133 (3,479,012)
Human resources (full-time equivalents)
2016–17
Planned
2016–17
Actual
2016–17
Difference (actual minus planned)
50 40 (10)

Information on the Federal Economic Development Agency for Southern Ontario’s lower-level programs is available on the departmental website and in the TBS InfoBase.Footnote 2

Internal Services

Description

Internal Services are groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct service categories that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; and Acquisition Services.

Results

FedDev Ontario’s internal service functions continued to deliver high-quality and timely advice and services across the organization in 2016–17. These functions played a pivotal role in support of the Agency’s program delivery activities, its ability to meet administrative and corporate requirements and accountabilities, and in ensuring its alignment with Government of Canada priorities.   

As a partner in the Innovation, Science and Economic Development (ISED) portfolio, FedDev Ontario worked with portfolio partners and Ministers’ offices to further the achievement of the Minister of ISED’s mandate and priorities. The Agency collaborated closely with all of Canada’s regional development agencies (RDAs) to coordinate processes, integrate policy development and research where possible, and support the roll-out of the Government’s Innovation and Skills Plan. 

In 2016–17, FedDev Ontario used its integrated policy analysis and research capacity to provide strategic, evidence-based advice to support: internal direction-setting; program design; and government and ISED portfolio policy discussions. This support equipped decision makers with relevant information on key sectors, emerging and disruptive technologies, clusters of economic activity, and opportunities for collaboration and engagement.

Strengthening the Agency’s performance measurement efforts and demonstrating the results of its activities were also ongoing objectives in 2016–17, as FedDev Ontario continues to establish itself as a key performer in the economic prosperity of southern Ontario. Various initiatives in support of demonstrating the Agency’s impacts on the southern Ontario economy were completed, including: matching analysis work with Statistics Canada, input-output modelling with the Conference Board of Canada, and a review of the impact of FedDev Ontario’s investments in consortia. The review looked at consortia projects that involved multiple stakeholders; created new opportunities for innovation eco-systems to support commercialization, economic diversification, market development and expansion; and emphasized the development of clusters and/or expansion of geographic concentrations of interconnected companies and institutions. 

Stakeholder engagement remains a key priority for FedDev Ontario. In 2016–17, the Agency actively engaged stakeholders to seek opportunities for collaboration to advance regional economic priorities, champion the economic potential of southern Ontario and to advance external awareness of FedDev Ontario programs and other federal economic development initiatives. Specifically, in October 2016, the Agency conducted nine roundtables to engage stakeholders and solicit feedback on the needs of key clusters/areas of specialization. Sectors engaged include: regenerative medicine, agriculture bio-technology, cyber security, digital media, next generation networks, renewable energy, bio-pharmaceuticals, bio-processing and big data/internet of things.  

Throughout 2016–17, FedDev Ontario communicated effectively with Canadians about Agency successes, funding announcements, and other milestones, as well as strengthened its digital presence on social media through content generation and reciprocal engagement. The Agency undertook targeted digital activities, which involved enhancing and expanding content on channels including: Instagram, Google+, YouTube, and Periscope. Enriched Twitter content directly resulted in a 43 percent increase in followers over the previous year. For the launch of the second intake of the Canada 150 Community Infrastructure Program, FedDev Ontario reached out to its stakeholders with three live-streamed Periscope videos. These videos gave important details about the program and the application process and allowed potential applicants to have questions answered in real time, respectively targeting English, French and Indigenous audiences. The Communications team at FedDev Ontario organized and supported 118 events, including 95 funding announcements with over $170 million going to direct recipients. FedDev Ontario also actively ensures the mobile-friendly nature of its external website, since all social media posts direct the client back to this site and most social media is accessed via mobile devices. By taking advantage of opportunities presented through social media platforms, including live-streaming funding announcements, the creation of more engaging and interactive content such as videos, and ensuring excellence in its traditional communications activities, FedDev Ontario is reaching an ever-growing audience in southern Ontario.

Budgetary financial resources (dollars)
2016–17
Main Estimates
2016–17
Planned spending
2016–17
Total authorities available for use
2016–17
Actual spending
(authorities used)
2016–17
Difference
(actual minus planned)
16,899,045 16,899,045 17,330,723 16,316,107 (582,938)
Human resources (full-time equivalents)
2016–17
Planned
2016–17
Actual
2016–17
Difference (actual minus planned)
112 112 0

Analysis of trends in spending and human resources

Actual expenditures

Departmental Spending Trend Graph

Bar chart of Departmental Spending Trend (the long description is located below the image)
Description of Figure: Departmental Spending Trend
 Departmental Spending Trend
2014–15 2015–16 2016–17 2017–18 2018–19 2019–20*
Sunset Programs – Anticipated 0 0 0 0 0 0
Statutory 3,056,870 3,214,283 2,838,104 2,755,440 2,755,126 0
Voted 101,046,273 186,583,011 219,297,508 266,593,209 183,570,869 0
Total 104,103,143 189,797,294 222,135,612 269,348,649 186,325,995 0

*No planned spending has been identified for 2019 –20, as this period is beyond the Agency’s current five-year funding mandate.

 

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Budgetary Performance Summary

Budgetary Performance Summary for Program and Internal Services (dollars)
Program(s) and Internal Services 2015–16
Main Estimates
2015–16
Planned Spending
2016–17
Planned Spending
2017–18
Planned Spending
2015–16
Total Authorities Available for Use
2015–16
Actual Spending (authorities used)
2014–15
Actual Spending (authorities used)
2013–14
Actual Spending (authorities used)
Strategic Outcome: A competitive southern Ontario economy
1.1 Technological Innovation 91,786,705 91,786,705 92,081,080 91,951,369 74,992,007 55,550,921 9,298,340 56,430,801
1.2 Business Development 66,123,559 66,123,559 58,571,582 56,898,029 72,728,056 69,728,062 49,467,300 87,659,299
1.3 Community Economic Development 41,264,851 41,264,851 66,896,145 55,389,017 47,140,022 47,037,706 27,689,452 71,120,480
Internal Services Subtotal 16,076,604 16,076,604 16,899,045 16,137,492 17,754,648 17,480,605 17,648,051 19,069,825
Total 215,251,719 215,251,719 234,447,852 220,375,907 212,614,733 189,797,294 104,103,143 234,280,405

FedDev Ontario's current suite of programming took effect in 2014–15 with a goal of investing in projects that would have a strategic and long-term impact on the southern Ontario economy. In 2015–16, from total authorities of $212.6 million, actual spending was $189.8 million, resulting in a surplus of $22.8 million.

The graph above represents FedDev Ontario's historical spending trend from 2013–14 through 2015–16, along with planned spending for 2016–17 to 2018–19. As previously noted, FedDev Ontario commenced the first year of its second mandate in 2014–15.

To better align its funding with project lifecycles and maximize its investment in southern Ontario, $40.2 million under AMF and the Massey Hall project were reallocated to 2015–16, 2016–17 and 2017–18. The notable increase over 2014–15 spending and budgetary authorities reflects these adjustments in activity.

Other significant budgetary impacts of note include the launch of the Canada 150 Community Infrastructure Program. The initial intake of this program commenced in 2015–16 with funding of $44.4 million allocated for southern Ontario over 2016–17 and 2017–18 fiscal years. An additional amount of $44.4 million in funding for southern Ontario was also announced in Budget 2016, doubling the initial investment. Planned spending is reflective of these changes.

Expenditures by Vote

For information on FedDev Ontario's organizational voted and statutory expenditures, consult the Public Accounts of Canada 2016.

Alignment of Spending With the Whole-of-Government Framework

Alignment of 2015–16 Actual Spending With the Whole-of-Government Framework (dollars)
Program Spending Area Government of Canada Outcome 2015–16
Actual Spending
1.1 Technological Innovation Economic affairs An innovative and knowledge-based economy 55,550,921
1.2 Business Development Economic affairs Strong economic growth 69,728,062
1.3 Community Economic Development Economic affairs Strong economic growth 47,037,706
Total Spending by Spending Area (dollars)
Spending Area Total Planned Spending Total Actual Spending
Economic affairs 199,175,115 172,316,689
Social affairs 0 0
International affairs 0 0
Government affairs 0 0

Financial Statements and Financial Statements Highlights

Financial Statements

FedDev Ontario's complete Financial Statements (unaudited) for 2015–16 can be found on FedDev Ontario's website.

Financial Statements Highlights

Condensed Statement of Operations (unaudited)
For the Year Ended March 31, 2016 (dollars)
Financial Information 2015–16
Planned Results
2015–16
Actual
2014–15
Actual
Difference (2015–16 actual minus 2015–16 planned) Difference (2015–16 actual minus 2014–15 actual)
Total expenses 154,283,870 116,311,752 79,035,316 (37,972,118) 37,276,436
Total revenues - - - - -
Net cost of operations before government funding and transfers 154,283,870 116,311,752 79,035,316 (37,972,118) 37,276,436

In 2015–16, FedDev Ontario's actual net cost of operations was $116.3 million, compared to the 2015–16 planned result of $154.3 million and the 2014–15 actual net cost of operations of $79.0 million. As expected, the 2015–16 results were significantly higher than those of the prior fiscal year as a result of the natural evolution of project lifecycles. In 2014–15, following the launch of its new suite of programming, FedDev Ontario reallocated $40.2 million of its budget to 2015–16. Anticipating the time required to identify and carry out due diligence on potential investments under the new programs, increasing available budget in 2015–16 was essential to maximizing investment in southern Ontario as projects reached the approval and implementation stage.

In addition to the increase in transfer payments from the 2014–15 cycle, FedDev Ontario was also identified to lead the administration of the Canada 150 Community Infrastructure Program for southern Ontario. The increased activity in the Agency's base programs, paired with this new program, drove increases in operational expenditures as new applications were assessed and approved, along with payments processed for mature stage, multi-year projects.

Condensed Statement of Financial Position (unaudited)
As at March 31, 2016 (dollars)
Financial Information 2015–16 2014–15 Difference (2015–16 minus 2014–15)
Total net liabilities 35,571,522 30,083,407 1,488,115
Total net financial assets 34,283,076 28,591,351 5,691,725
Departmental net debt 1,288,446 1,492,057 (203,611)
Total non-financial assets 101,488 357,994 (256,506)
Departmental net financial position (1,186,958) (1,134,063) 52,895

FedDev Ontario reported net financial assets totaling $34.3 million at the end of 2015–16, an increase of $5.7 million (20 percent) over 2014–15. This increase is related to amounts set aside for payments against outstanding 2015–16 liabilities. The increase is attributed to increased activity in the Agency's contributions portfolio, reflecting the rise in outgoing payments to approved applicants.

Net liabilities for FedDev Ontario were $35.6 million at the end of 2015–16, an increase of $5.5 million (18 percent) over 2014–15. As identified in the Agency's financial assets, increased activity in the contributions portfolio has driven this change. As projects matured beyond the assessment and initial implementation stages, payments for eligible activities rose. Reflected in this closing amount are those payments pending for recipient activities during 2015–16.

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Section III: Analysis of Programs and Internal Services

Performance Summary

With 2015–16 marking year two of its second five-year mandate, FedDev Ontario continued building upon successes from its first six years of supporting southern Ontario's economic growth and prosperity.

An important focus in 2015–16 was on the region's future economic prospects that are being shaped by global economic shifts, including the fast pace of technological change, where innovation and new technologies are disrupting existing business models and giving rise to new industries. To proactively address these changes, FedDev Ontario leveraged the capacity and assets within southern Ontario and supported its young entrepreneurs and start-ups. With nearly half of all Canadian private sector research and development performed in Ontario, the highest rate of university education in the country and being home to key technology clusters and high-tech firms, the region remains a vital part of the core of Canada's science, technology and innovation ecosystem.

Moving forward, the region's economic success will benefit from its ability to innovate, embrace the latest technologies, and access fast-growing international markets and global value chains. A key element in achieving this success, which is supported by FedDev Ontario, is a coordinated, focused, whole-of-region approach where the unique assets and capabilities of governments, businesses, academia and communities are mobilized.

As a maturing organization, FedDev Ontario continued to play an increasingly relevant role as a centre of excellence for research, analysis and policy development for southern Ontario. To this end, in 2015–16, FedDev Ontario applied this expertise in its roles as champion and convenor with partners and stakeholders to demonstrate its broader impact as an "agent of change" in southern Ontario. FedDev Ontario also applied its "on the ground" knowledge of regional dynamics and needs and leveraged its policy expertise to expand the Agency's capacity to influence the broader Government of Canada policy direction.

To ultimately support a competitive southern Ontario economy, FedDev Ontario directed its efforts through four key program areas in 2015–16: Technological Innovation, Business Development, Community Economic Development and Internal Services. These programs represent the impact of FedDev Ontario's suite of programming, targeting not only community and business development, but also demonstrating a strong focus on multi-partner, transformative projects that aim to place southern Ontario at the forefront of new technologies and innovations with global economic implications.

Programs

Program 1.1 Technological Innovation

Description

The Technological Innovation program supports the southern Ontario economy by encouraging the creation of innovative products, services, processes and markets so as to contribute to the region's competitiveness. This is achieved by focusing on key sectors and clusters and by strengthening linkages between the region's businesses, post-secondary institutions and not-for-profit organizations to leverage key regional assets and spur the advancement of transformative technologies and innovation. By facilitating these strategic partnerships, FedDev Ontario aims to improve the region's productivity, competitiveness and attractiveness as a location of choice for investment.

Investments through this program support large-scale, incremental and transformative activities that increase productivity and market diversification. While available to for-profit and not-for-profit organizations, project funding is business-facing, meaning that activities are linked to the needs of businesses.

Transfer payments in support of this program are delivered through the administration of contribution agreements with businesses, not-for-profit organizations and post-secondary institutions.

Program Performance Analysis and Lessons Learned

This program includes the Investing in Commercialization Partnerships (ICP) initiative and the Advanced Manufacturing Fund (AMF), through which FedDev Ontario is working to advance the development of cutting-edge technologies. During 2015–16, these initiatives focused on supporting the commercialization of new products and services, encouraging innovation and accelerating market-driven solutions through increased collaboration between businesses, post-secondary institutions and research institutes.

Collectively, ICP and AMF received 24 applications in 2015–16 from a broad range of sectors, including digital media, biomaterials, medical devices, robotics/automation, clean technology, life sciences, and automotive and additive manufacturing.

Under ICP, more than $44.5 million in multi-year contribution agreements was executed in 2015–16 to support six projects. These projects are anticipated to develop and commercialize new products in a number of Ontario's economic sectors and deepen industry–academic collaborations to solve global challenges and create a wide array of new products and high-value jobs in Canada. For example, the University of Waterloo, on behalf of the Southern Ontario Water Consortium (SOWC), received up to $12 million in multi-year funding to support water technology companies in southern Ontario in testing and commercializing their advanced technologies. SOWC has planned over 80 collaborative industry-led applied research sub-projects to develop and bring to market new and/or improved water technologies.

ICP performance during 2015–16 made notable progress toward the program's ultimate five-year targets. Current leveraged funds are $3.76 for every dollar invested. While this result significantly exceeds the expected target of 1:1, it has been largely influenced by a single investment in one project. When that investment is removed, leveraged investments to date total $1.29 for every dollar invested, an amount closer to the anticipated target.

ICP projects funded in 2015–16 are anticipated to support an average of 54 collaborations per project by March 31, 2019. To date, projects have reported an average of 18 collaborations.

In 2015–16, AMF contributed to projects that supported process innovation, increased productivity and commercialization of new products, and strengthened a life science cluster. Through AMF, more than $82 million in multi-year contribution agreements was executed in 2015–16 for projects with three for-profit organizations and one not-for-profit organization. These projects are anticipated to strengthen key economic sectors within Ontario and to generate significant sales of $132.4 million within two years of project completion, mostly to export markets. For example, the Centre for Commercialization of Regenerative Medicine received up to $20 million in a non-repayable contribution to establish and operate a centre for advanced therapeutic cell technologies. The centre will be a first-in-world cell therapy manufacturing facility that combines process development and manufacturing and is dedicated to the development of technologies that will enable industrial manufacturing of human cells for therapeutic outcomes. The centre will create and maintain 389 high-quality jobs and lead to the commercialization of over 30 products.

Projects funded in 2015–16 under AMF are expected to create 575 jobs and leverage funding of more than $286 million. These projects will contribute toward the targeted outcomes to be achieved through AMF by 2019. As both application intake periods for AMF are now closed, FedDev Ontario is focusing its efforts on the assessment of the remaining applications received in the second intake, as well as the monitoring of approved projects to support positive program outcomes.

Budgetary Financial Resources (dollars)
2015–16
Main Estimates
2015–16
Planned Spending
2015–16
Total Authorities Available for Use
2015–16
Actual Spending (authorities used)
2015–16
Difference
(actual minus planned)
91,786,705 91,786,705 74,992,007 55,550,921 (36,235,784)
Human Resources (Full-Time Equivalents [FTEs])
2015–16 Planned 2015–16 Actual 2015–16 Difference
(actual minus planned)
21 21 0
Performance Results
Expected Results Performance Indicators Targets Actual Results
Strengthened innovation, partnerships and commercialization in southern Ontario Share of Ontario's employment in knowledge-intensive business services (KIBS)Footnote * 6.4% (2015) 6.4% (2015)
Business enterprise expenditure on research and development Strengthen private sector investment in research and development Private sector investment in research and development decreased

Program 1.2 Business Development

Description

The Business Development program supports southern Ontario businesses, especially small and medium-sized enterprises (SMEs) in their efforts to drive competitiveness. The program provides support to encourage the growth of early-stage companies through business services and counselling; provides access to capital; helps existing businesses expand domestically and globally; helps companies and sectors improve productivity; facilitates linkages and collaborations between businesses; and helps southern Ontario aerospace and defence-related firms respond to economic opportunities from Canada's defence procurements.

Canada Business Ontario, included as part of this program, provides targeted services to businesses across Ontario along a lifecycle continuum: from entrepreneurship to expansion.

Transfer payments in support of this program are delivered through the administration of contribution agreements with businesses and not-for-profit organizations.

Program Performance Analysis and Lessons Learned

The Business Development program includes FedDev Ontario's Investing in Business Innovation (IBI) and Investing in Business Growth and Productivity (IBGP) initiatives. During 2015–16 these initiatives strengthened angel networks in southern Ontario and supported southern Ontario businesses in accessing capital, developing employee skills, and improving productivity and business performance.

Through IBI, 14 project agreements totalling more than $8 million were executed with new and early-stage enterprises in southern Ontario in 2015–16. These contributions will enable early-stage companies to leverage domestic and foreign angel and venture capital that will support the launch of innovative technologies and products. In 2015–16, funding agreements were also executed for four not-for-profit organizations that provided skills development, education and seed financing to new entrepreneurs, helping them become investment ready. In addition, FedDev Ontario continued to administer projects with angel networks, not-for-profit organizations, and new and early-stage companies that were approved in previous years. Overall, 18 IBI projects had funding agreements executed in 2015–16 for a total of more than $15 million.

To date, the initiative has provided assistance to 188 businesses, achieving 75 percent of its target of 250 businesses. IBI matches private capital, promoting private sector investment in early-stage Ontario companies. To date, IBI has exceeded the goal of leveraging $2 of every $1 of IBI investment— preliminary results show IBI successfully helping businesses to improve their competitiveness by leveraging investment at a rate of 4.99:1 for direct recipients.

One example of a project supported through IBI is Dejero Labs of Kitchener. Dejero Labs Inc. used two FedDev Ontario contributions to develop and commercialize its wireless broadcast solution, enabling the company to expand into new markets. Dejero's broadcast solution captures mobile video transmission from cameras, smartphones and tablets through a wireless handheld transmitter. With the support of FedDev Ontario contributions and angel investors, Dejero Labs is now well established, with over $20 million in revenues per year.

 Dejero Labs Inc. Success Story

IBI has received strong interest from communities with active innovation ecosystems, as well as a large volume of applications from the information and communications technology, life sciences and clean-tech sectors.

During 2015–16, the Business Growth and Productivity sub-program, supported through the work of FedDev Ontario's IBGP initiative, focused its resources on established businesses and not-for-profit organizations that assist southern Ontario SMEs in improving business productivity and global competitiveness. IBGP makes direct and indirect investments in southern Ontario SMEs to support market expansion and diversification, improved productivity and integration into global value chains.

During 2015–16, IBGP processed 49 applications and executed funding agreements for 18 new projects. The majority of IBGP's projects have supported companies expanding their manufacturing facilities and capabilities; almost half of the projects are strengthening knowledge-based clusters; and, all projects have resulted in increased exports through growth in global markets.

To extend IBGP's reach across southern Ontario and provide smaller scale investments, third-party delivery agreements have been executed with the Yves Landry Foundation and Canadian Manufacturers and Exporters. Both organizations have a history of successfully delivering productivity improvement and global competitiveness initiatives to SMEs. Since these agreements have been in place, 128 projects have been completed. For the completed projects, FedDev Ontario contributed just over $4 million, which has resulted in the leveraging of $9.5 million in private sector investment.

Uptake on the IBGP programming has been strong. IBGP's investments have been made across traditional and emerging industry sectors, with all geographic regions across southern Ontario represented. Growth in the automotive, aerospace and food processing industry sectors has created new market opportunities for southern Ontario SMEs. These growth opportunities are seeing southern Ontario SMEs further integrated into global supply chains and seeking new investments in technologies and equipment.

Mariposa Dairy in Lindsay, Ontario, received both direct and third-party federal funding through FedDev Ontario. The owners of the family-run cheese production and packaging plant launched their business in 1989 in a 74 square metre (800 square foot) cheese-making facility. Federal funding support helped the company train staff, automate production, increase marketing and exporting capability, and most recently, move into a 3,716 square metre (40,000 square foot) plant. FedDev Ontario support helped Mariposa to extend the markets for its award-winning hand-crafted goat and sheep cheese all over North America.

 Mariposa Dairy Success Story

Budgetary Financial Resources (dollars)
2015–16
Main Estimates
2015–16
Planned Spending
2015–16
Total Authorities Available for Use
2015–16
Actual Spending (authorities used)
2015–16
Difference
(actual minus planned)
66,123,559 66,123,559 72,728,056 69,728,062 3,604,503
Human Resources (Full-Time Equivalents [FTEs])
2015–16 Planned 2015–16 Actual 2015–16 Difference
(actual minus planned)
52 56 4
Performance Results
Expected Results Performance Indicators Targets Actual Results
Improved business growth, productivity and global competitiveness in southern Ontario Private sector investment in machinery and equipment in Ontario Ability of businesses to meet or exceed their 2015 investment intentions (released February 2015) Preliminary results ($22.5 billion) indicate that businesses did meet their 2015 machinery and investment intentions ($19.8 billion).
Ontario's labour productivity $44.68 $46.20Footnote *
Venture capital investment in Ontario Increased venture capital investment in Ontario Venture capital investment in Ontario increased in 2015 compared to 2014.

Program 1.3 Community Economic Development

Description

The Community Economic Development program supports the 288 communities (small and large, rural and urban, Francophone and Indigenous) in southern Ontario that are home to more than 12 million residents. These communities are key to enhancing the economic growth and sustainability of the region. Southern Ontario depends on communities that can attract the best talent and compete for investment as dynamic centres of commerce and learning.

Strong, safe and modern communities that are economically diverse are essential building blocks for the region's competitiveness and long-term prosperity. FedDev Ontario makes strategic investments that build on competitive regional advantages. These investments help address the unique challenges facing eastern Ontario communities; maintain the economic vitality of official language minority communities; and advance regional diversification efforts to promote economic development. FedDev Ontario works with its partners, including Infrastructure Canada and the Ontario Ministry of Agriculture, Food and Rural Affairs, to deliver infrastructure investment across Ontario.

Through programming aimed at addressing the distinct needs and circumstances across southern Ontario communities, FedDev Ontario works to identify local solutions to local challenges and opportunities.

FedDev Ontario supports this program through the administration of grants and contribution agreements with funding recipients such as businesses, not-for-profit organizations, First Nation governments, post-secondary institutions and municipalities.

Program Performance Analysis and Lessons Learned

Through the Community Economic Development program, FedDev Ontario provided funding in 2015–16 to help communities in southern Ontario build on competitive regional advantages, create opportunities for economic diversification, support high-quality employment, and address critical infrastructure requirements. Programming has supported rural, eastern, Francophone and Indigenous communities in southern Ontario in addressing distinct economic challenges through direct funding and third-party delivery partners.

Through the Community Futures Program, FedDev Ontario continues to support rural communities in southern Ontario in advancing economic development and SME growth. In 2015–16, FedDev Ontario worked in partnership with other funding organizations such as the Business Development Bank of Canada, to leverage the services of individual Community Futures Development Corporations (CFDCs). FedDev Ontario also worked in partnership with the CFDC regional networks and the Ontario Association of CFDCs to streamline reporting requirements and develop the capacity of the CFDCs through the design and implementation of model financial and human resources management policies and practices.

FedDev Ontario provided an $11.3-million investment in 2015–16 through the Community Futures Program. This was used to fund the operational costs of CFDCs and their networks and leveraged approximately $4.40 for every dollar contributed by FedDev Ontario, exceeding the target of $3.60. CFDCs provided 747 new loans with a value of $49.2 million to SMEs in 2015–16 in southern Ontario. These loans and associated business counselling services helped assist 5,027 businesses, create 4,425 jobs and maintain a further 7,476 jobs in rural southern Ontario communities. As of March 31, 2016, southern Ontario CFDCs had $163 million invested in 2,807 loans with SMEs.

In 2015–16, FedDev Ontario also supported a range of economic development activities to support eastern Ontario communities through the Eastern Ontario Development Program. FedDev Ontario collaborates with the 15 CFDCs in eastern Ontario and Community Futures Ontario East (formerly Eastern Ontario Community Futures Development Corporations Network) to deliver the Eastern Ontario Development Program. The program leveraged funding from external partners and focused on large, strategic and collaborative projects that provided long-term economic benefits for multiple communities and strengthened linkages between rural and urban areas.

During 2015–16, the Eastern Ontario Development Program supported 767 businesses and organizations in eastern Ontario, which helped to create or maintain 2,277 jobs in the region. This support resulted in an additional investment of $1.83 for every dollar invested by FedDev Ontario in 2015–16.

In 2015–16, through the Economic Development Initiative (EDI), FedDev Ontario continued to address the challenges faced by Francophone communities, such as barriers to accessing training and business information in French, and youth out-migration in rural official language minority communities. There were six active EDI projects in 2015–16, with total funding of $3.7 million. These projects are improving access to business and entrepreneurship services and training, increasing access to capital, and supporting applied research partnerships for new and existing Francophone entrepreneurs.

Through the Investing in Regional Diversification (IRD) sub-program, FedDev Ontario continues to make strategic investments to help southern Ontario communities diversify their economies. These investments leverage the economic strengths and assets of local communities so they can take advantage of emerging opportunities and transition to new industries or sectors, which will encourage collaboration to enhance business attraction, investment and employment opportunities. In 2015–16, FedDev Ontario executed a project agreement of more than $3 million in non-repayable contributions toward one new IRD project. Investments in this project and ongoing administration of IRD projects executed in previous years leveraged a total of $0.86 of project support for every dollar contributed by FedDev Ontario, below the 1:1 target to be achieved by March 31, 2019. These investments are supporting key identified growth sectors, such as clean technology and cyber security.

The Infrastructure Delivery sub-program continues its commitment to strengthening regional competitiveness through investments to public infrastructure in Ontario communities. In 2015–16, FedDev Ontario continued to administer and monitor strategic project investments that promote the long-term competitiveness and diversification of southern Ontario by attracting skilled workers, innovative businesses and investors.

FedDev Ontario worked closely with its partners, including Infrastructure Canada and the Ontario Ministry of Agriculture, Food and Rural Affairs, to deliver the Building Canada Fund – Communities Component Regular Intake, to ensure that construction for all projects was completed by March 31, 2016. FedDev Ontario continued to support the Massey Hall revitalization project, with a federal investment of up to $8 million to help transform the historic landmark theatre into a modern performance venue.

FedDev Ontario's administration of the Canada 150 Community Infrastructure Program in 2015–16 resulted in an approval to invest $43.6 million, to be expended in 2016–17 and 2017–18, supporting more than 380 projects to improve existing community and cultural infrastructure across southern Ontario.

Budgetary Financial Resources (dollars)
2015–16
Main Estimates
2015–16
Planned Spending
2015–16
Total Authorities Available for Use
2015–16
Actual Spending (authorities used)
2015–16
Difference
(actual minus planned)
41,264,851 41,264,851 47,140,022 47,037,706 5,772,855
Human Resources (Full-Time Equivalents [FTEs])
2015–16 Planned 2015–16 Actual 2015–16 Difference
(actual minus planned)
45 36 (9)
Performance Results
Expected Results Performance Indicators Targets Actual Results
Southern Ontario communities are able to sustain long-term economic development and growth Percentage of southern Ontario census subdivisions with a decrease in employment insurance beneficiaries (year-over-year) 50 percent or more of southern Ontario census subdivisions have a decrease in employment insurance beneficiaries (year-over-year) 61 percent of southern Ontario census subdivisions had a decrease in employment insurance beneficiaries
Recent Economic Well-Being Indicator (REWBI) (composite indicator of socioeconomic performance) Average REWBI for the bottom quartile of communities improves in 2015 compared to the average REWBI for the bottom quartile in 2014 The average REWBI for the bottom quartile of communities remained stable in 2014 compared to the average REWBI for the bottom quartile in 2013

Internal Services

Description

Internal services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. Internal services include only those activities and resources that apply across an organization, and not those provided to a specific program. The groups of activities are Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; and Acquisition Services.

Program Performance Analysis and Lessons Learned

FedDev Ontario continued to use its integrated policy and research expertise to provide strategic, evidence-based advice and analysis to internal direction setting and program design, as well as to the government-wide policy development discussion. By leveraging its integrated approach to policy and research, FedDev Ontario continued to build its "on the ground" knowledge of southern Ontario; and to identify key factors for decision-making, including strategic sectors, emerging and disruptive technologies, prospective economic clusters, and opportunities for collaborations and engagements. FedDev Ontario's internal support services continued to play a pivotal role in 2015–16, supporting the delivery of the Agency's programs, managing corporate and administrative requirements, and aligning activities with Government of Canada priorities.

Building on its program delivery services, the Agency focused efforts on external awareness and engagement activities in 2015–16, advocating southern Ontario's potential for sustainable, effective investments. Proactive engagement with stakeholders and ministerial roundtable discussions pertaining to economic development, the innovation ecosystem and challenges to business growth enabled FedDev Ontario to foster stronger partnerships, deliver on its commitment to high-growth firms and leverage investment opportunities.

While continuing to engage stakeholders under its current suite of programs, FedDev Ontario also recognizes the importance of continual improvement and assessing its programs and services to ensure they remain relevant and responsive to the needs of southern Ontario. During 2015–16, the Agency's policy and evaluation groups expanded corporate knowledge from past programs and built expertise in strategic sectors. During 2015–16, the Agency completed an evaluation of the Southern Ontario Development Program, identifying results that exceeded original objectives. Future program design will build on the recommendations and lessons learned from this evaluation.

Work done in FedDev Ontario's policy and research capacity will be used to equip decision-makers with current, relevant information, including on strategic sectors, emerging and disruptive technologies, prospective economic clusters, and opportunities for collaboration and engagement.

Collaboration remained a key theme for FedDev Ontario in its back-office operations. For example, together with the other regional development agencies and Treasury Board, FedDev Ontario worked on the design of a case and stakeholder management system and received approval for a Grants and Contributions Program Management System, with development set to begin in 2016–17.

Operations activities also focused on aligning FedDev Ontario with government policy and procedure standards for compliance. In 2015–16, the Agency participated in a Core Control Audit, which assessed the internal control standards of FedDev Ontario agency-wide. FedDev Ontario demonstrated strong financial management governance and transfer payment management, obtaining a score of 100 percent in both categories. The audit also identified areas for improvement and the Agency developed a comprehensive management action plan to address identified issues.

In 2015, several initiatives were undertaken to ensure the right people were in the right place at the right time. Student hiring rose to 22 students in 2015–16, compared to 5 in the previous year, and public job postings increased by 150 percent. Succession planning discussions became more robust and tied into talent management discussions, with linkages to participation in sponsored learning events and skills development for the present and the future.

Encouraging increased productivity, greater collaboration and engagement by its staff, FedDev Ontario officially opened its new headquarters in Waterloo in July 2015. Receiving a silver accreditation award from Public Services and Procurement Canada for successful implementation of the Workplace 2.0 office fit-up standard, the Agency equipped its employees with the right space and tools to maintain high performance in delivering its mandate and providing results for Canadians.

The success of FedDev Ontario in its 2015–16 activities is evidenced in its heightened communications activities. Despite the delay caused by the federal election campaign, the Agency executed 109 funding announcements, amounting to over $229 million in funding to direct recipients. FedDev Ontario's social media presence also grew, expanding to include Instagram, Google +, Periscope and LinkedIn. This has allowed FedDev Ontario to increase its communication with Canadians, share Agency successes, and celebrate milestones and other significant events with funding recipients. The Agency's Twitter account also experienced significant growth, with followers increasing by 32 and 41 percent for English and French, respectively.

Budgetary Financial Resources (dollars)
2015–16
Main Estimates
2015–16
Planned Spending
2015–16
Total Authorities Available for Use
2015–16
Actual Spending (authorities used)
2015–16
Difference
(actual minus planned)
16,076,604 16,076,604 17,754,648 17,480,605 1,404,001
Human Resources (Full-Time Equivalents [FTEs])
2015–16 Planned 2015–16 Actual 2015–16 Difference
(actual minus planned)
111 124 13

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Section IV: Supplementary Information

Supporting Information on Lower-Level Programs

Supporting information on lower-level programs is available on FedDev Ontario's website.

Supplementary Information Tables

The following supplementary information tables are available on FedDev Ontario's website.

Federal Tax Expenditures

The tax system can be used to achieve public policy objectives through the application of special measures such as low tax rates, exemptions, deductions, deferrals and credits. The Department of Finance Canada publishes cost estimates and projections for these measures annually in the Report of Federal Tax Expenditures. This report also provides detailed background information on tax expenditures, including descriptions, objectives, historical information and references to related federal spending programs. The tax measures presented in this report are the responsibility of the Minister of Finance.

Organizational Contact Information

Federal Economic Development Agency for Southern Ontario:

101-139 Northfield Drive West
Waterloo, Ontario N2L 5A6
Canada

Telephone: 1-866-593-5505
Fax: 519-725-4976

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Appendix: Definitions

appropriation:
Any authority of Parliament to pay money out of the Consolidated Revenue Fund.
budgetary expenditures:
Operating and capital expenditures; transfer payments to other levels of government, organizations or individuals; and payments to Crown corporations.
Departmental Performance Report:
Reports on an appropriated organization's actual accomplishments against the plans, priorities and expected results set out in the corresponding Reports on Plans and Priorities. These reports are tabled in Parliament in the fall.
full-time equivalent:
A measure of the extent to which an employee represents a full person-year charge against a departmental budget. Full-time equivalents are calculated as a ratio of assigned hours of work to scheduled hours of work. Scheduled hours of work are set out in collective agreements.
Government of Canada outcomes:
A set of 16 high-level objectives defined for the government as a whole, grouped in four spending areas: economic affairs, social affairs, international affairs and government affairs.
Management, Resources and Results Structure:
A comprehensive framework that consists of an organization's inventory of programs, resources, results, performance indicators and governance information. Programs and results are depicted in their hierarchical relationship to each other and to the Strategic Outcome(s) to which they contribute. The Management, Resources and Results Structure is developed from the Program Alignment Architecture.
non-budgetary expenditures:
Net outlays and receipts related to loans, investments and advances, which change the composition of the financial assets of the Government of Canada.
performance:
What an organization did with its resources to achieve its results, how well those results compare to what the organization intended to achieve, and how well lessons learned have been identified.
performance indicator:
A qualitative or quantitative means of measuring an output or outcome, with the intention of gauging the performance of an organization, program, policy or initiative respecting expected results.
performance reporting:
The process of communicating evidence-based performance information. Performance reporting supports decision-making, accountability and transparency.
planned spending:
For Reports on Plans and Priorities (RPPs) and Departmental Performance Reports (DPRs), planned spending refers to those amounts that receive Treasury Board approval by February 1. Therefore, planned spending may include amounts incremental to planned expenditures presented in the Main Estimates.
A department is expected to be aware of the authorities that it has sought and received. The determination of planned spending is a departmental responsibility, and departments must be able to defend the expenditure and accrual numbers presented in their RPPs and DPRs.
plans:
The articulation of strategic choices, which provides information on how an organization intends to achieve its priorities and associated results. Generally a plan will explain the logic behind the strategies chosen and tend to focus on actions that lead up to the expected result.
priorities:
Plans or projects that an organization has chosen to focus and report on during the planning period. Priorities represent the things that are most important or what must be done first to support the achievement of the desired Strategic Outcome(s).
program:
A group of related resource inputs and activities that are managed to meet specific needs and to achieve intended results and that are treated as a budgetary unit.
Program Alignment Architecture:
A structured inventory of an organization's programs depicting the hierarchical relationship between programs and the Strategic Outcome(s) to which they contribute.
Report on Plans and Priorities:
Provides information on the plans and expected performance of appropriated organizations over a three-year period. These reports are tabled in Parliament each spring.
results:
An external consequence attributed, in part, to an organization, policy, program or initiative. Results are not within the control of a single organization, policy, program or initiative; instead they are within the area of the organization's influence.
statutory expenditures:
Expenditures that Parliament has approved through legislation other than appropriation acts. The legislation sets out the purpose of the expenditures and the terms and conditions under which they may be made.
Strategic Outcome:
A long-term and enduring benefit to Canadians that is linked to the organization's mandate, vision and core functions.
sunset program:
A time-limited program that does not have an ongoing funding and policy authority. When the program is set to expire, a decision must be made whether to continue the program. In the case of a renewal, the decision specifies the scope, funding level and duration.
target:
A measurable performance or success level that an organization, program or initiative plans to achieve within a specified time period. Targets can be either quantitative or qualitative.
voted expenditures:
Expenditures that Parliament approves annually through an Appropriation Act. The Vote wording becomes the governing conditions under which these expenditures may be made.
Whole-of-government framework:
Maps the financial contributions of federal organizations receiving appropriations by aligning their Programs to a set of 16 government-wide, high-level outcome areas, grouped under four spending areas.

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