2015-16 Report on Plans and Priorities
Ministers' messages and section I

Minister's Message

Minister of State's Message

Section I: Organizational Expenditure Overview

Organizational Profile

Appropriate Minister: The Honourable Bernard Valcourt, PC, QC, MP

Minister of State: The Honourable Rob Moore, PC, MP

Institutional Head: Mr. Paul J. LeBlanc, President

Ministerial portfolio: Atlantic Canada Opportunities Agency

Enabling Instrument: Part I of the Government Organization Act, Atlantic Canada 1987, R.S.C, 1985, c. 41 (4^th Supp.), also known as the Atlantic Canada Opportunities Agency Act. See the Department of Justice Canada website for more information.

Year of Incorporation / Commencement: 1987

Other: Mr. Gerald Keddy is the Parliamentary Secretary to the Minister of National Revenue, the Minister of Agriculture and for the Atlantic Canada Opportunities Agency.

Information is available on the Agency’s website regarding the Repayable Contributions Portfolio of ACOA’s Business Development Program.

Organizational Context

Raison d’être

Established in 1987 (Part I of the Government Organization Act, Atlantic Canada 1987, R.S.C., 1985, c.41 (4^th Supp.), also known as the Atlantic Canada Opportunities Agency Act), the Atlantic Canada Opportunities Agency (ACOA) is the federal department responsible for the Government of Canada’s economic development efforts in the provinces of New Brunswick, Prince Edward Island, Nova Scotia, and Newfoundland and Labrador.

The Minister of State (Atlantic Canada Opportunities Agency) is responsible for this organization.

ACOA works to create opportunities for economic growth in Atlantic Canada by helping businesses become more competitive, innovative and productive, by working with diverse communities to develop and diversify local economies, and by championing the strengths of Atlantic Canada. Together with Atlantic Canadians, ACOA is building a stronger economy.

Responsibilities

ACOA plays an important role in developing and supporting policies and programs that strengthen the region’s economy. Its responsibilities are stated in the Agency’s legislation, which mandates the organization “to increase opportunity for economic development in Atlantic Canada and, more particularly, to enhance the growth of earned incomes and employment opportunities in that region.”^[i] Although the Agency’s policies and program tools have evolved since its inception, the overall goal remains constant. ACOA is dedicated to helping the Atlantic region realize its full economic potential in terms of productivity, innovation, competitiveness and growth. This is achieved by addressing structural changes in the economy, helping communities and businesses to overcome challenges, and capitalizing on opportunities. ACOA is committed to helping the region build its capacity and make the transition to a stronger economy.

The Agency provides services through its head office in Moncton, N.B., and throughout the four Atlantic provinces, with a regional office located in each of the four provincial capitals and 22 local field offices. Through its Ottawa office, ACOA ensures that Atlantic Canada’s interests are reflected in the policies and programs developed by other departments and agencies of the federal government.

Strategic Outcome and Program Alignment Architecture

ACOA’s strategic outcome – a competitive Atlantic Canadian economy – and its program alignment architecture (PAA) can be found below. The PAA is based on the results of policy research and analysis, the periodic assessment of program relevance and performance, ongoing dialogue with stakeholders in the region, and the priorities and directions of the Government of Canada.

1. Strategic Outcome: A competitive Atlantic Canadian economy

1.1 Program: Enterprise Development

1.1.1 Sub-Program: Innovation and Commercialization

1.1.2 Sub-Program: Productivity and Growth

1.1.3 Sub-Program: International Business Development

1.2 Program: Community Development

1.2.1 Sub-Program: Community Investment

1.2.2 Sub-Program: Community-based Business Development

1.3 Program: Policy, Advocacy and Coordination

1.3.1 Sub-Program: Policy

1.3.2 Sub-Program: Advocacy

1.3.3 Sub-Program: Coordination

Internal Services

Organizational Priorities

All organizational priorities support the Agency’s strategic outcome: a competitive Atlantic Canadian economy. This outcome reflects ACOA’s legislative purpose to enhance the growth of earned incomes and employment opportunities as well as the Agency’s role in advocating on behalf of Atlantic Canada, affecting national policy.

Priority 1	Type [ii]	Program
Focus ACOA’s programs and services on initiatives that encourage Atlantic Canadian businesses to become more innovative, productive and competitive in the global marketplace.	Ongoing	Enterprise Development, with support from Community Development and Policy, Advocacy and Coordination
Description
Why is this a priority? Productivity drives competitiveness, economic growth and, ultimately, living standards. Atlantic Canada continues to be challenged in closing the productivity gap, in raising the level of business innovation, and in countering an aging population and a shortage of skilled workers. ACOA is working with businesses in Atlantic Canada to help them take advantage of the Canada-European Union (EU) Trade Agreement, other trade agreements, the Atlantic Shipbuilding Procurement Strategy and the Agency’s new streamlined approach to innovation programming, aimed at better helping small and medium-sized enterprises (SMEs) to innovate, adapt and compete. Strategic investments in areas such as innovation, technology adoption, business and management skills, and the development of SMEs’ international business activities are essential to enhancing the competitiveness of the region’s SMEs and the continued vitality of the region’s communities. What are the plans for meeting this priority? Support SMEs, through the renewed Atlantic Innovation Fund and the strengthened Business Development Program, to improve business productivity and competitiveness by helping firms become investor ready and capitalize on opportunities related to major projects, and by promoting innovation and skills initiatives such as commercialization activities, the adoption and adaptation of technology, efficiency measures, the enhancement of business management skills and sector development activities. Assist Atlantic businesses and industries to expand into the global marketplace by exploring opportunities for international business development, including global value chains, as outlined in Canada’s Global Markets Action Plan and by helping SMEs to capitalize on international trade agreements in 2015 and beyond. Provide research, coordination and programming that enable engagement and collaboration with federal, provincial, private-sector and academic partners throughout Atlantic Canada to identify effective approaches to addressing productivity, competitiveness and skills challenges in the region in 2015 and beyond.

 

Priority 2	Type	Program
Develop and implement strategies in response to the distinct economic needs and opportunities of Atlantic Canadian communities, including a particular focus on rural business development.	Ongoing	Community Development, with support from Enterprise Development and Policy, Advocacy and Coordination
Description
Why is this a priority? The diverse culture, geography and economic conditions throughout the four Atlantic provinces necessitate customized responses to economic needs that balance the differences and synergies between rural and urban areas. Rural communities must address significant challenges facing the natural resource sector, which has traditionally driven the regional economy, and seize opportunities for diversification. This is especially important in Atlantic Canada – one of the most rural regions in Canada. Stakeholders must work together to ensure that strategies developed in response to specific needs are complementary and contribute to a stronger region. What are the plans for meeting this priority? Continue to work closely with partners in the private sector and academia, community-based groups and other government departments to address the needs of communities, especially in areas that are vulnerable to the out-migration of skilled workers and an aging population. Maximize the use of ACOA’s resources, as well as those of partners such as the Community Business Development Corporations that assist rural SMEs, through the identification of strategic opportunities for economic growth, wealth creation and diversification in the region’s communities, research and analysis that will assess the specific needs of diverse areas, and advocacy for responses from key stakeholders that will generate economic benefit. Assist in promoting industries such as tourism and help develop strategies to successfully grow these sectors. Identify and facilitate the development of primary resource projects in rural communities, with a particular focus on innovation and on developing and commercializing new value- added products and services. Strengthen investments in communities while ensuring continued alignment with federal priorities such as support for official language minority communities and Aboriginal economic development.

 

Priority 3	Type	Program
Provide leadership through coordination, engagement and advocacy with business, government and other stakeholders throughout the region and with key decision-makers in Ottawa so that Atlantic Canada is able to capitalize on emerging opportunities and address key challenges.	Ongoing	Policy, Advocacy and Coordination, with support from Community Development and Enterprise Development
Description
Why is this a priority? Atlantic Canadian businesses have significant opportunity related to growth in global markets, new technologies and major projects that are under way or on the horizon, including in areas such as defence and energy. There are also important opportunities for Atlantic Canadian SMEs in key sectors to capitalize on growth opportunities such as those emerging from the National Shipbuilding Procurement Strategy. SMEs can also maximize their competitive advantages in the global economy under the Canada-EU Trade Agreement and other trade agreements. ACOA’s mandate requires the Agency to lead the coordination of support among stakeholders, including federal departments, to maximize the economic benefits relating to emerging opportunities and to address ongoing challenges that may occur within the region. What are the plans for meeting this priority? Analyze and develop strategies and engage stakeholders to capitalize on opportunities in areas that show strong potential for development, including major projects, the energy sector, the Atlantic Gateway and key growth sectors in Atlantic Canada. Engage with business networks to develop policy research focused on SMEs in the region. Inform key decision-makers and provide them with strategic advice based on rigorous analysis to ensure the Atlantic economy capitalizes on opportunities. Engage stakeholders, SMEs and communities in accessing opportunities created through the Canada-EU Trade Agreement. Ensure federal policies and programs in the primary resource sector take into consideration Atlantic Canadian competitiveness issues, including awareness of opportunities for regional value-added products in new and existing global markets. Advocate on behalf of Atlantic Canadian SMEs to promote their capacity to take advantage of opportunities associated with upcoming major projects, including federal defence procurement. Engage stakeholders through various strategies to maximize federal industrial benefit opportunities related to the National Shipbuilding Procurement Strategy and the Defence Procurement Strategy. Lead the new Atlantic Federal Council in engaging senior federal officials on Atlantic priorities and in connecting with central agencies on issues of national importance.

 

Priority 4	Type	Program
Continually improve the internal management of the organization and maintain employee engagement to excel in serving Canadians.	Ongoing	Internal Services
Description
Why is this a priority? In a climate of fiscal restraint and organizational change, ACOA continues to demonstrate a strong commitment to delivering quality results for Canadians. To achieve its objectives, ACOA will have to foster continuous improvement while sustaining a diverse and skilled workforce, as inspired by Blueprint 2020. The Agency must maintain employee engagement at all levels to ensure efficient and effective decision making that reflects corporate and operational risks. In maintaining this engagement, it is also critical for employees to understand and identify with the Public Service of Canada’s values – Respect for Democracy, Respect for People, Integrity, Stewardship, and Excellence – as the basis for ethical behaviour and as a means of underscoring the importance and the impact of ACOA’s work. What are the plans for meeting this priority? Implement transformational and organizational initiatives that will strengthen and improve the Agency’s capacity to effectively and efficiently deliver excellent programs and services, and continue to seek feedback and foster employee engagement through various initiatives (e.g. kaizen events, 2014 Public Service Employee Survey Action Plan, employee engagement committees) in support of the Blueprint 2020 vision. Continue to seek opportunities for increased collaboration both within the Agency as well as within the broader government context. Continue to implement the new Directive on Performance Management, which promotes a fair, equitable and consistent approach to people management, supports employees and their development, and enhances productivity to ensure the provision of high-quality service to Canadians. Manage the implementation of mitigating measures for the Agency’s key risks and ensure the integration of risk management into the Agency’s planning and decision- making processes. Implement the first year of the 2015-2018 ACOA Values and Ethics Strategy to ensure that values remain embedded in the Agency’s culture. Reinforce ACOA’s commitment to maintaining strong human resource practices, in keeping with public-service values and in meeting its human resource needs and the demands of its change management agenda. Support key elements of Shared Services Canada’s information technology (IT) transformation agenda to improve security and realize cost savings in the delivery of IT services within the public service.

Risk Analysis

Risk	Risk Response Strategy	Link to Program Alignment Architecture
Economic Context There is a risk that the achievement of results expected from the Agency’s economic development programming may be affected by external factors that contribute to uncertainties for economic growth in Atlantic Canada.	Management will mitigate this risk through ongoing research and analysis of the factors affecting economic growth in Atlantic Canada, and through ongoing intelligence gathering facilitated by the Agency’s networks and regional presence. Management will capitalize on the flexibility of the Agency’s programming, on its advocacy role and on its integrated planning process in order to proactively address the risks and opportunities presented by these uncertainties.	Enterprise Development Community Development Policy, Advocacy and Coordination
External Capacity There is a risk that partner, community and client capacity for the identification, development and successful implementation of strategic projects may not be sufficient to support the optimal achievement of ACOA’s program objectives.	Management will mitigate this risk through ongoing research, analysis, intelligence gathering and information sharing. Management will also work closely with its partners and stakeholders to foster client and community capacity and to increase private-sector capital investment in the region. Management will capitalize on the Agency’s integrated planning process in order to understand and strategically address differences in how this risk expresses itself across ACOA regions.	Community Development Enterprise Development Policy, Advocacy and Coordination

ACOA’s work is driven by client requirements, strategic priorities and ever changing local and regional economic landscapes. These drivers give rise to uncertainties that can affect the Agency’s ability to achieve expected results.

Over the next few years, economic growth in Atlantic Canada will be influenced by investments in the mining and energy sectors, the National Shipbuilding Procurement Strategy and global economic developments.

Atlantic Canada’s economy continues to face several risks. While economic conditions are improving in the United States, slower-than-anticipated growth in emerging economies could create additional challenges for exporters. International competition from low-cost producers and access to markets will continue to challenge Atlantic Canada’s industries. An aging population and out- migration could also place pressure on skills and labour force availability.

The above factors require businesses and communities in Atlantic Canada to become more competitive. The development and commercialization of innovative products and services, a continued focus on business skills development and increased market diversification could help improve the region’s productivity and competitiveness.

ACOA’s organizational priorities reflect the above factors and the need for sound fiscal management and continuous improvement. ACOA’s key risks and response strategies support the Agency in its plan to address challenges and capitalize on opportunities in a manner that is integrated, strategic and responsive to the circumstances affecting each Atlantic province.

In addition to its department-specific risks, ACOA monitors relevant Government of Canada risks and ensures that the Agency’s response is aligned with whole-of-government strategies. Information Management and Information Technology security represents an area of uncertainty given the frequency, complexity and severity of cyber-attacks. ACOA will mitigate this risk through information stewardship, implementation of Government of Canada policies and procedures, including the Treasury Board Secretariat’s Directive on Recordkeeping and related training, and implementation of ACOA’s Departmental Security Plan.

Planned Expenditures

Budgetary Financial Resources: (dollars)

2015-16 Main Estimates	2015-16 Planned Spending	2016-17 Planned Spending	2017-18 Planned Spending
298,584,989	298,584,989	296,858,549	298,712,722

Human Resources: (Full-Time Equivalents [FTEs])

2015-16	2016-17	2017-18
598	598	598

Budgetary Planning Summary for Strategic Outcome and Programs: (dollars)

Strategic Outcome, Programs and Internal Services	2012-13 Expenditures	2013-14 Expenditures	2014-15 Forecast Spending	2015-16 Main Estimates	2015-16 Planned Spending	2016-17 Planned Spending	2017-18 Planned Spending
Strategic Outcome 1: A competitive Atlantic Canadian economy
1.1 Enterprise Development	179,856,451	180,674,018	176,912,731	171,221,612	171,221,612	169,937,144	172,757,770
1.2 Community Development	88,520,093	94,103,326	90,907,790	89,727,582	89,727,582	89,368,367	88,353,094
1.3 Policy, Advocacy and Coordination	12,403,955	10,634,165	13,521,959	11,774,749	11,774,749	11,715,659	11,764,659
Subtotal	280,780,499	285,411,509	281,342,480	272,723,943	272,723,943	271,021,170	272,875,523
Internal Services Subtotal	34,881,448	28,746,598	29,609,957	25,861,046	25,861,046	25,837,379	25,837,199
Total	315,661,947	314,158,107	310,952,437	298,584,989	298,584,989	296,858,549	298,712,722

The decrease in planned spending is primarily evident between 2014-15 and 2015-16. Details of all variances are fully explained in the section Departmental Spending Trend.

Alignment of Spending with the Whole-of-Government Framework

Alignment of 2015-16 Planned Spending, with the Whole-of-Government Framework: (dollars)

Strategic Outcome	Program	Spending Area	Government of Canada Outcome	2015-16 Planned Spending
A competitive Atlantic Canadian economy	1.1 Enterprise Development	Economic Affairs	Strong Economic Growth	171,221,612
	1.2 Community Development	Economic Affairs	Strong Economic Growth	89,727,582
	1.3 Policy, Advocacy and Coordination	Economic Affairs	Strong Economic Growth	11,774,749

Total Planned Spending, by Spending Area: (dollars)

Spending Area	Total Planned Spending
Economic Affairs	272,723,943
Social Affairs	0
International Affairs	0
Government Affairs	0

Departmental Spending Trend

In the 2015-16 Main Estimates, the Agency’s available funding is $298.6 million. This represents a $12.3 million reduction from 2014‑15 forecast spending of $310.9 million. The variance is explained by:

• a $16.0 million reduction in parliamentary authorities received after the tabling of the 2014‑15 Main Estimates but not yet received in 2015-16
• • $11.6 million in funding from repayable collections. The Agency received funding in 2014-15 from repayable contributions greater than what was included in the Agency’s reference levels. An adjustment is required annually to account for collections in excess of the base amount included in the reference levels;
  • $3.4 million from the operating budget carry forward; and
  • $1.0 million for Treasury Board-funded costs.
• a $3.6 million increase in temporary initiatives
• • $3.2 million to support specific projects in innovation, commercialization and community development in New Brunswick; and
  • $0.4 million in funding to support the spruce budworm outbreak intervention as announced in Budget 2014.
• a $0.1 million increase in other adjustments
• • $1.9 million in increased funding resulting from the dissolution of ECBC; and
  • minus $1.8 million for a one-time transition payment in 2014-15 for implementing salary-payment-in-arrears.

In 2016-17, planned spending is $296.9 million, a $1.7 million decrease from $298.6 million in 2015-16, due to:

• a $2.7 million decrease to support specific projects in innovation, commercialization and community development in New Brunswick; and
• a $1.0 million increase in funding to support the spruce budworm outbreak intervention as announced in Budget 2014.

In 2017-18, planned spending increases to $298.7 million, a $1.8 million increase from the $296.9 million in planned spending for 2016-17. This is due to:

• a $2.4 million increase in funding to support the spruce budworm outbreak intervention as announced in Budget 2014; and
• a $0.6 million decrease for the conclusion of operational funding for the administration of the Building Canada Fund.

The figure below illustrates the Agency’s actual spending for 2012-13 and 2013-14, the forecast spending for 2014-15 and the planned spending from 2015-16 to 2017-18.

D

Excluding sunset programs, the Agency’s spending levels from 2012‑13 to 2013-14 declined mainly as a result of Budget 2011 and Budget 2012 initiatives. All other variances have been explained above.

Estimates by Vote

For information on ACOA’s organizational appropriations, consult the 2015-16 Main Estimates on the Treasury Board of Canada Secretariat website.

[i] Atlantic Canada Opportunities Agency Act, R.S.C., 1985, c. 41, 4^th Supp.

[ii] “Type” definitions:

• New: newly committed to for fiscal year 2015-16
• Previously committed to: committed to one or two fiscal years earlier (i.e. 2013-14 or 2014 -15)
• Ongoing: committed to at least three fiscal years earlier (i.e. 2012-13 or earlier)