3.3 – Your department – Departmental overview

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PrairiesCan: Building on WD’s success

On August 6, 2021, Prairies Economic Development Canada was officially created from the former department of Western Economic Diversification Canada (WD).

The work of the department is supported by approximately 410 employees (as of September 30, 2022).

Since 2011, WD has touched over 840 communities, over 5,700 for-profits, over 1,500 not-for-profits, and supported as many as 86,000 jobs. Western Canadians expect us to do even better.

Budget 2021 increased      [Redacted]      funding to PrairiesCan by      [Redacted]     . Funding is now approximately      [Redacted]     .

 

Mandate and roles

PrairiesCan’s mandate is to grow and diversify the Prairie economy and advance Prairie interests in Ottawa.

• Competitive and innovative businesses
• Thriving communities

It accomplishes this through four main functions:

• Invest
  Create jobs and growth via strategic investments and targeted initiatives
• Pathfind
  Help people navigate federal economic programs and services
• Advise
  Inform economic decision-making and advocate for Prairie interests
• Convene
  Connect economic actors to support collaboration and growth

 

Presence in more places

Service locations – types and locations

Minister Vandal announced openings of service locations in Regina, Prince Albert, Thompson, and Brandon. Announcements on locations in Fort McMurray, Grande Prairie, and Lethbridge are anticipated to proceed in early winter 2022/23.

 

 

• Text version: Service locations – types and locations

  Service locations in Alberta:

  • Edmonton (Existing Headquarters)
  • Fort McMurray (New Service Location)
  • Grand Prairie (New Service Location)
  • Calgary (Existing Office)
  • Lethbridge (New Service Location)

   

  Service locations in Saskatchewan:

  • Prince Albert (New Service Location)
  • Saskatoon (Existing Office)
  • Regina (New Service Location)

   

  Service locations in Manitoba:

  • Thompson (New Service Location)
  • Brandon (New Service Location)
  • Winnipeg (Existing Office)

 

PrairiesCan current and anticipated budget

PrairiesCan current and anticipated budget

Fiscal year	2021-22	2022-23	2023-24	2024-25
Total operating	53.7	51.8	42.5	[Redacted]
Total grants and contributions	479.9	506.8	311.3	[Redacted]
Grand total	$533.6	$558.6	$353.8	[Redacted]

($ millions)

• does not include Employee Benefits Plan (EBP)
  • EBP changes year-to-year based on salary expenditures; for FY 2022-23, it is estimated to be $5.4M
• includes VIDO reprofile, operating reprofiles, CCDI transfer, and 2022-23 REGI top up renewal
• 2022-23 and future years include items pending approval

Decrease between 2022-23 and 2034-24 attributed to the ending of time-limited programs such as Regional Economic Growth Through Innovation, Budget 2021 Programs with the exception of JGF and Aerospace, and Women’s Entrepreneurship Strategy.

 

How we help: core programs

The main ways the agencies fund businesses, not-for-profits, and communities:

Regional growth through innovation

• Regional Innovation Ecosystem (RIE): funding for not-for-profit organizations to support innovative entrepreneurship
• Business Scale-up and Productivity (BSP): support for innovative, high-growth businesses to scale-up

Community Economic Development and Diversification (CEDD)

• Support for economic growth and diversification of communities

Economic Development Initiative (EDI)

• Support for projects in Official Language Minority Communities

Western Canada Business Services Network (WCBSN)

• Helping entrepreneurs start or expand small businesses, including rural areas and underrepresented groups

 

How we help: time-limited program delivery

The agencies also deliver one-time programming to respond to urgent regional and community needs, including those arising as a result of the pandemic.

Current initiatives include:

• Women Entrepreneurship Strategy
  2018-2025
• Black Entrepreneurship Program
  2021-2025
• Regional Relief and Recovery Fund
  2020-2021
• Regional Air Transportation Initiative
  2021-2023
• Canadian Seafood Stabilization Fund
  2020-2021
• Jobs and Growth Fund
  2021-2024
• Tourism Relief Fund
  2021-2023
• Support for Major Festivals and Events
  2021-2023
• Canada Community Revitalization Fund
  2021-2023
• Preparing Canada’s Aerospace Sector for Recovery
  2020-2023
• Launching a National Quantum Strategy
  2022-2029
• Canada Coal Transition Initiative
  2018-2023

 

The Prairies are a major contributor to Canada’s economy

• In 33 years between 1987 and 2020, the Prairies’ GDP grew 340% versus 284% nationally, and accounted for 21.6% of Canada’s cumulative GDP.
  • The Prairies ($446 billion) represented 20% of Canada’s GDP ($2.2 trillion) in 2020.
• International exports of goods from the Prairies totaled $3.08 trillion between 1987 and 2020, 24.1% of all provincial goods exports in Canada.
• From 1987 to 2020, the Prairies’ population grew 53% compared to 44% nationally, while the Prairies labour force grew 56.3% versus 47.1% nationally.
  • The Prairies (7.0 million) represented 18% of Canada’s population (38.0 million) in 2020.
  • The Prairies (3.7 million) represented 19% of Canada’s labour force (19.9 million) in 2020.
• The Prairies accounted for 36.7% of private non-residential investment between 1987 and 2020.

 

Economic drivers

Top 5 sectors in the Prairies
(Average GDP share (%), 2018-2020)

• Mining, quarrying, and oil and gas extraction: 15.4%
• Real estate and rental and leasing: 12.0%
• Construction: 8.0%
• Manufacturing: 8.0%
• Health care and social assistance: 7.3%

Average Prairies GDP (2018-20): $485.8B

 

Top 5 Prairies exports
(International goods exports by value, 2021)

• Energy products: 56.9%, $109.5B
• Farm, fishing, and intermediate food products: 16.5%, $31.8B
• Consumer goods: 5.7%, $10.9B
• Basic and industrial chemical, plastic, and rubber products: 5.6%, $10.7B
• Forestry products and building and packaging materials: 4.7%, $9.0B

Total Prairies exports (2021): $192.4B

 

The view from the Prairies

Current context

• Prairie businesses, like elsewhere in Canada, are grappling with the rapidly rising costs, including labour, as the composition and demands of the workforce has shifted with the pandemic.
• BC, NB, NS and PEI surpassed pre-pandemic (2019) real GDP levels in 2021 & Quebec and Ontario were within a percentage point. No Prairie provinces were within 3%.
  • Alberta’s real GDP is finally projected to surpass 2019 levels in 2022 with forecast growth of 5.5%
  • Saskatchewan’s real GDP is not projected to surpass 2019 levels in 2022 despite forecast growth of 5.2%
  • Manitoba’s real GDP is finally projected to surpass 2019 levels in 2022 with forecast growth of 4.1%

Structural challenges

• Alberta and Saskatchewan continue to feel the effects of the 2015-16 oil-market induced downturn. The move away from carbon-intensive industrial inputs and energy is impacting employment and investment in both provinces.
  • Capital expenditure in Alberta and Saskatchewan fell a combined 44% between 2014 and 2021, versus growth of 35% in the rest of Canada.
  • Alberta (-12%), Saskatchewan (-10%), Manitoba (-3%) and Newfoundland and Labrador (-1%) are the only provinces where real GDP per capita in 2021 was still lower than 2014.
  • As of 2021, Saskatchewan and Alberta employment was still below 2015, the previous peak. Canada’s employment grew 6% in the same period, Manitoba over 3%.

Labour market challenges

• In September 2022, all Prairie provinces had unemployment rates below pre-pandemic: Alberta (5.5%), Manitoba (4.5%), Saskatchewan (4.1%). The national unemployment rate was 5.2%.
• The September 2022 Prairies youth unemployment rate (9.1%) was lower than pre-pandemic, and lower than the national youth unemployment rate; however, in Alberta (9.9%) it remained elevated.
• The Indigenous unemployment rate (3-month moving average) was 7.5% in September 2022, higher than the general unemployment rate in the Prairies and below the national Indigenous unemployment rate (7.9%).

 

The view from the Prairies – Key sectors and trends

Natural resources

• Resource markets have recovered from the pandemic, with higher commodity prices driving a resurgence in Prairies exports.
• Emissions reduction in the resource sector is a key challenge as the global economy transitions toward net-zero.
• Opportunities exist to apply industry expertise to new and emerging clean energy sectors: hydrogen, geothermal, CCUS, bio-refining, SMRs, petrochemicals.

Workforce development

• The Prairies are home to a young, skilled workforce, that could be bolstered with increased participation among Indigenous peoples, women and youth.*
  *Nearly two-thirds (64%) of the population of the Prairies has at least one post-secondary certificate, diploma or degree, comparable to the Canadian average (Statistics Canada). There are significant potential economic gains (GDP) in closing participation gaps for women and Indigenous peoples (McKinsey, National Aboriginal Economic Development Board).

Value-added agriculture

• The Prairies are home to over 80% of Canada’s farmland. Access to adequate water and irrigation infrastructure is crucial to the future growth of the agri-food and plant protein industry.

Emerging sectors

• The region is developing capacities in digital technology, clean transportation, advanced manufacturing and life sciences to build resilience and diversity.

 

Minister’s mandate letter commitments

PrairiesCan continues to advance work on two key mandate letter commitments:

• Advancing place-based strategies to strengthen the Prairies Provinces: “Ensure the continued strength of … Prairies Economic Development Canada and that [it] continue[s] to promote short- and long-term job creation and economic development in the … Prairie regions, particularly through the delivery of regionally tailored programs, services, knowledge and expertise, so that all regions, and in particular rural and small communities, have access to place-based programming and support … regularly engage with the Minister of International Trade, Export Promotion, Small Business and Economic Development, as well as with the Ministers responsible for the other Regional Development Agencies.”
• Futures Fund: “Contribute to the design and delivery of the new Futures Fund for Alberta, Saskatchewan and Newfoundland and Labrador to ensure that it supports local and regional economic diversification and place-based strategies.”

 

Annex A – Diversification in the Prairies

Transforming our traditional strengths

• Problem: Our natural resources sectors are highly innovative. However, there is opportunity to unlock even more of their value, while also addressing environmental challenges.
• Solution: Exploring new value chain opportunities for our resource sectors and furthering industry-led research and development to reduce environmental impacts.

Growing emerging sectors

• Problem: Our dependence on natural resources exposes the economy to volatility and discourages investments in potentially fast-growing sectors. Diversifying away from natural resources will improve the robustness of the economy.
• Solution: Growing emerging sectors and exports by encouraging innovative businesses to expand and adopt new technologies, bring new products and services to market, and create jobs.

Building community resilience

• Problem: Communities experiencing economic shocks and transition require investment and industry partners to spur new growth.
• Solution: Ensuring communities are connected to the innovation economy, regardless of size or location.

A more inclusive economy

• Problem: Some groups face significant barriers to participate, and fully share, in the Canadian economy.
• Solution: Promoting an inclusive economy and supporting the economic participation of groups facing barriers in the Prairie economy, such as Indigenous people, women, and youth. For First Nations, Inuit, and Métis, this is a critical part of advancing reconciliation and self-determination.

 

Annex B – Our role in investment: repayable contributions

Generally, we support businesses that are unable to access capital from traditional sources. We do this with interest-free loans that offer businesses patient funding, and sometimes more flexible repayment schedules.

For example:

• Business Scale-up and Productivity: The Business Scale-up and Productivity (BSP) stream supports high-growth businesses that plan to grow by commercializing innovative technologies, enhancing productivity, scaling-up production, and expanding their market domestically and globally.
• Since April 1, 2019, 110 projects were approved in the Prairie Provinces with total funding of $158.6M.

 

Annex C – Our role in investment: non-repayable contributions

We work with non-for-profits (NFPs) that offer a range of supports to entrepreneurs and communities to strengthen the Prairies’ economy. These supports help fill vital ecosystem gaps. We support NFPs with non-repayable contributions. For example:

• Regional Innovation Ecosystems (RIE)
  • The RIE fund is open to not-for-profit organizations seeking to create and nurture a business environment that supports western Canada’s entrepreneurs and businesses. It supports initiatives that provide access to the services, expertise, and resources needed to innovate, grow businesses, and create jobs.
  • Since April 1, 2019, 113 projects were approved in the Prairie Provinces with total funding of $146M.
• Community Economic Development and Diversification (CEDD)
  • The CEDD program helps western communities respond to economic development opportunities, adjust to changing and challenging economic circumstances, and supports targeted communities such as official language minority and Indigenous communities.
  • Since April 1, 2019, 83 projects were approved in the Prairie Provinces with total funding of $108.4M.
• Western Canada Business Service Network (WCBSN)
  • The WCBSN is an informal network of more than 70 organizations. They provide business information and advisory services, and, in some instances, community economic development planning and support, as well as loans to small and medium-sized Enterprises (SMEs).
  • Roughly $26M annual funding for WCBSN.