2016-17 Report on Plans and Priorities
Ministers’ Message and Section I

Ministers’ Message

As Canada begins a new chapter in 2016-17, creating a culture of innovation is more important than ever in driving economic growth.

The recent name change of our Innovation, Science and Economic Development Portfolio recognizes this, placing a deliberate emphasis both on innovation and scientific discovery, and their equal importance for economic development nationally and throughout all of Canada’s diverse regions.

We have promised Canadians a government that will bring real change – in both what we do and how we do it. We will invest in growing our economy, increase transparency and use the best evidence available to inform decision making.

Through the programs of the Innovation, Science and Economic Development Portfolio, we will work to develop and deliver an innovation agenda for Canada that will help improve our productivity performance, grow the economy and enhance our prosperity and well-being.

This 2016-17 Report on Plans and Priorities of the Atlantic Canada Opportunities Agency (ACOA) provides information on how the Agency will support the Government on achieving our agenda in the coming year and we are fully confident that ACOA is prepared to successfully support us and work with our partners inside and outside government to deliver for Canadians. However, given our commitment to more effective reporting, this year’s report will be the final submission using the existing reporting framework.

The Prime Minister and the President of the Treasury Board are working to develop new, simplified and more effective reporting processes that will better allow Parliament and Canadians to monitor our Government’s progress on delivering real change to Canadians. In the future ACOA’s reports to Parliament will focus more transparently on how we are using our resources to fulfill our commitments and achieve results for Canadians.

These new reporting mechanisms will allow Canadians to more easily follow the Agency’s progress toward delivering on our priorities, which were outlined in the Prime Minister’s mandate letters to us.

It is our pleasure to present the Report on Plans and Priorities for ACOA for 2016-17, which sets out how the Agency’s work will contribute to attaining these shared objectives.

Section I: Organizational Expenditure Overview

Organizational Profile

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

Institutional Head: Mr. Paul J. LeBlanc, President

Ministerial Portfolio: Innovation, Science, and Economic Development

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: 1987

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 Innovation, Science and Economic Development 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, it 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 Atlantic provinces, with four regional offices, located in the provincial capitals, and 23 local field offices. Through its Ottawa office, ACOA ensures that Atlantic Canada’s interests are understood and 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 direction 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

Priority: Innovation and Export Development

Description: Focus ACOA’s programs and services on initiatives that encourage Atlantic Canadian businesses to be more innovative and productive and to export more, creating jobs and wealth opportunities in the Atlantic economy.

Priority Type:^[ii] Ongoing

Key Supporting Initiatives:

Planned Initiative	Start Date	End Date	Link to PAA
Enhance and implement ACOA’s Innovation Strategy as part of the Government of Canada’s Innovation Agenda. This includes strategic investments in areas such as business incubation and acceleration, technology adoption, growth-oriented firms and clean and sustainable technologies.	Ongoing	Ongoing	Enterprise Development / Policy, Advocacy and Coordination
Support small and medium-sized enterprises (SMEs), through the Atlantic Innovation Fund and the Business Development Program, to improve business productivity and competitiveness by helping firms innovate and commercialize, adopt and adapt technology and other efficiency measures, and enhance business management skills.	Ongoing	Ongoing	Enterprise Development
Assist Atlantic Canadian businesses and industries to expand into the global marketplace by increasing the range of their trading partners and exploring opportunities for international business development, including participation in global value chains and leveraging international trade agreements.	Ongoing	Ongoing	Enterprise Development

Priority: Community Development and Diversification

Description: Respond to distinct economic needs and opportunities of communities, including investments to help them transition and diversify.

Priority Type: Ongoing

Key Supporting Initiatives:

Planned Initiative	Start Date	End Date	Link to PAA
Work in partnership with key community stakeholders such as Community Business Development Corporations (CBDCs) to support the diversification of communities by helping to grow key sectors such as tourism and by supporting resource-based industries with a focus on innovation and value-added products and services.	Ongoing	Ongoing	Community Development
Work in collaboration with partners in the private sector and academia, community-based groups and other government departments to strengthen community planning and capacity building, invest in local infrastructure, and address community needs in areas that are vulnerable to the out-migration of skilled workers and an aging population.	Ongoing	Ongoing	Community Development
Continue support for official language minority communities and economic development with Atlantic indigenous communities.	Ongoing	Ongoing	Community Development / Policy, Advocacy and Coordination

Priority: Coordination

Description: Work with all levels of government, the post-secondary education system, businesses and other stakeholders, and through established legislative, regulatory and Cabinet processes, to deliver on the Government’s top priorities and support strategic investments that build on the region’s competitive advantages.

Priority Type: Ongoing

Key Supporting Initiatives:

Planned Initiative	Start Date	End Date	Link to PAA
Analyze regional competitive advantages, engage stakeholders and support key decision-makers with rigorous analysis and local intelligence to capitalize on opportunities in areas that show strong potential for development, including major projects; the renewable energy, clean technology and resource sectors; strategic infrastructure; high-growth firms; and other key growth sectors in Atlantic Canada.	Ongoing	Ongoing	Policy, Advocacy and Coordination
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.	Ongoing	Ongoing	Policy, Advocacy and Coordination
Maximize federal industrial benefits related to federal defence procurement opportunities such as the National Shipbuilding Procurement Strategy to help grow a robust aerospace and defence sector.	Ongoing	Ongoing	Policy, Advocacy and Coordination

For more information on organizational priorities, see the minister’s mandate letter on the Prime Minister of Canada’s website.

Risk Analysis

Risk	Risk Response Strategy	Link to PAA
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.

Economic growth in Atlantic Canada will be driven over the next few years by a combination of factors: the development of emerging and value-added sectors; significant investments in industrial projects; and global economic developments, including economic integration and innovation.

Atlantic Canada’s economy continues to face several risks. As a small, open economy, international competition from low-cost producers will continue to challenge Atlantic Canada’s manufacturing base and resource industries. An aging population will also have an impact on the region’s labour force. Lower commodity prices could create additional challenges for investment projects in the region.

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 will enhance 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 critical action plans support the Agency’s work to address challenges and capitalize on opportunities in a manner that is integrated, strategic and responsive to each Atlantic province’s circumstances.

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, the implementation of Government of Canada policies and procedures, proactive internal communications to promote employee awareness, and the timely implementation of security actions in response to cyber security threats.

Planned Expenditures

Budgetary Financial Resources: (dollars)

2016-17 Main Estimates	2016-17 Planned Spending	2017-18 Planned Spending	2018-19 Planned Spending
308,197,204	308,197,204	305,049,456	291,691,456

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

2016-17	2017-18	2018-19
590	590	590

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

Strategic Outcome, Programs and Internal Services	2013-14 Expenditures	2014-15 Expenditures	2015-16 Forecast Spending	2016-17 Main Estimates	2016-17 Planned Spending	2017-18 Planned Spending	2018-19 Planned Spending
Strategic Outcome 1: A competitive Atlantic Canadian economy.
1.1 Enterprise Development	180,674,018	173,992,156	178,652,400	172,961,681	172,961,681	170,781,524	165,894,524
1.2 Community Development	94,103,326	90,659,999	86,032,800	97,704,593	97,704,593	96,688.987	88,168,987
1.3 Policy, Advocacy and Coordination	10,634,165	12,444,235	11,518,900	11,740,443	11,740,443	11,789,209	11,838,209
Subtotal	285,411,509	277,096,390	276,204,100	282,406,717	282,406,717	279,259,720	265,901,720
Internal Services	28,746,598	28,176,701	28,386,100	25,790,487	25,790,487	25,789,736	25,789,736
Total	314,158,107	305,273,091	304,590,200	308,197,204	308,197,204	305,049,456	291,691,456

In the 2016-17 Main Estimates, the Agency’s available funding is $308.2 million. This represents an increase of $3.6 million from 2015-16 forecast spending of $304.6 million. This variance is explained by:

• a $3.9 million decrease in parliamentary authorities received after the tabling of the 2015‑16 Main Estimates but not yet adjusted in 2016-17
  • a $3.1 million decrease related to the collection of repayable contributions. An adjustment is required yearly to account for collections in excess of the base amount included in the reference levels; and
  • a $0.8 million decrease from the operating budget carry forward.
• a $7.5 million increase in temporary initiatives
  • an $8.3 million increase in funding to support the Canada 150 Infrastructure Program (CIP 150);^[iii]
  • a $1.7 million decrease in funding to support specific projects in innovation, commercialization and community development in New Brunswick;
  • a $1.0 million increase in funding to support the Spruce Budworm Outbreak Intervention Initiatives – ACOA component; and
  • a $0.1 million decrease related to other minor adjustments.

In 2017-18, planned spending is $305.1 million, a $3.1 million decrease from the $308.2 million in 2016-17, due to:

• a $5.0 million decrease from reprofiling 2014-15 repayable collections;
• a $2.4 million increase in funding to support the Spruce Budworm Outbreak Intervention Initiatives – ACOA component; and
• a $0.5 million decrease for the conclusion of operational funding for the administration of the Building Canada Fund.

In 2018-19, planned spending is $291.7 million, a $13.4 million decrease from the $305.1 million in 2017-18, due to:

• an $8.3 million decrease in funding to support the CIP 150;
• a $4.9 million decrease in funding to support the Spruce Budworm Outbreak Intervention Initiatives – ACOA component; and
• a $0.2 million decrease in funding to support the Roadmap for Canada’s Official Languages 2013-2018: Education, Immigration, Communities.

Alignment of Spending with the Whole-of-Government Framework

Alignment of 2016-17 Planned Spending with the Whole-of-Government Framework: (dollars)

Strategic Outcome	Program	Spending Area	Government of Canada Outcome	2016-17 Planned Spending
A competitive Atlantic Canadian economy.	1.1 Enterprise Development	Economic Affairs	Strong Economic Growth	172,961,681
	1.2 Community Development	Economic Affairs	Strong Economic Growth	97,704,593
	1.3 Policy, Advocacy and Coordination	Economic Affairs	Strong Economic Growth	11,740,443

Total Planned Spending, by Spending Area: (dollars)

Spending Area	Total Planned Spending
Economic Affairs	282,406,717
Social Affairs	0
International Affairs	0
Government Affairs	0

Departmental Spending Trend

The figure below illustrates the Agency’s actual spending for 2013-14 and 2014-15, forecast spending for 2015-16 and planned spending from 2016-17 to 2018-19.

D

The variation in planned spending is explained in detail in the previous section, Planned Expenditures.

Estimates by Vote

For information on ACOA’s organizational appropriations, consult the 2016-17 Main Estimates.

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

[ii]. “Priority Type” definitions:

• New: newly committed to for fiscal year 2016-17
• Previously committed to: committed to one or two fiscal years earlier (i.e. 2014-15 or 2015-16)
• Ongoing: committed to at least three fiscal years earlier (i.e. 2013-14 or earlier)

[iii]. The Canada 150 Infrastructure Program is more commonly known as the Canada 150 Community Infrastructure Program.