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Evaluation of the FedNor Economic Development Initiative (EDI)

3.0 Findings

3.1 Relevance

3.1.1. Does the initiative continue to meet a need?

The findings suggest a continued need for the program based on a declining francophone population and a declining French-language retention rate in OLMCs. This is reinforced by evidence that suggests that francophone organizations are isolated and lack networks, which EDI can help to address.

EDI has been designed specifically to meet the needs of francophones in Northern Ontario. This is reflected in the 19 consultations FedNor conducted between 2006 and 2008 with OLMCs across Ontario to determine the major issues facing the francophone community. Approximately 240 people participated in these consultations which confirmed the need for additional funding for economic development projects in OLMCs so that they can become more productive and competitive in the global economy.

These findings were reinforced by the interviews of funding recipients and regional economic development stakeholders conducted as part of this evaluation. These respondents reported that community economic development activities were still much needed in Northern Ontario's OLMCs and they saw a continued need for the EDI. Interviewees suggested that some of the challenges facing OLMCs are their geographic dispersion and the lack of networks in place to assist francophone organizations to collaborate in identifying ways to further community economic development; the result is that they often have not worked in a coordinated fashion. EDI was seen as a useful program to help foster the development of such networks and new partnerships.

An analysis of demographic trends also highlights the need for EDI. These trends were analyzed in the francophone community profiles produced by the Réseau de développement économique et d'employabilité (RDÉE)8 and by the Trillium Foundation9 from 2006 census data. The census data shows that between 2001 and 2006, the francophone population10 of Northern Ontario census divisions, where it is concentrated, declined by close to 5.7%11, while the total population increased by 0.5%.

Negative factors affecting the demographic weight of OLMCs are the ageing population and the exodus of young people, the result of which is that the proportion of children and teens (5-19 age group) is much lower in francophones than in Anglophones (17% vs. 21%) and the proportion of people aged 45-64 and 65 and over is reasonably greater in francophones12.

The French-language retention rate is another phenomenon that threatens francophone communities. Indeed, this rate, which corresponds to the proportion of people whose mother tongue is French and who most often speak French at home, declined by 2.3% from 2001 to 2006 in North Ontario, going from 54.7% to 52.4%.

The combined effects of the ageing population, the exodus of young people and the decline in the French-language retention rate will continue to reduce the absolute and relative size of Northern Ontario francophone OLMCs. These factors inevitably affect the economic and community development potential of OLMCs within the framework of the Roadmap for Canada's Linguistic Duality.

In terms of education levels, the 2006 census showed that the education level of Northern Ontario francophones is lower than that of the total population in Northern Ontario. Specifically, a significantly higher proportion of francophones had no certificate, diploma or degree compared to the total population of Northern Ontario (23.3% vs. 18.25%). Further, a significantly smaller proportion of francophones had a university certificate, diploma or degree than the total population (12.6% vs. 16.7%).

While the education levels of Northern Ontario francophones may have been lower than that of the total population in Northern Ontario, their average income level was 3.8% higher than the total population and their unemployment level was lower (7.2% vs. 8.1%). The conclusion to be drawn is that the educational and other disadvantages that francophones in Northern Ontario experience are partially mitigated by their higher income levels and lower unemployment levels.

3.1.2 Does the initiative meet the government's priorities?

Promoting linguistic duality in Canada has long been a priority of the Government. This priority was most recently reiterated by the Government in its 2010 Speech from the Throne in which it identified the continuing relevance of the Roadmap for Canada's Linguistic Dualityand made a commitment to take steps to strengthen further Canada's francophone identity.

Promoting linguistic duality in Canada has long been a priority of the Government. In the 2007 Speech from the Throne, the Government indicated its continuing support for Canada's linguistic duality. It further renewed its commitment to official languages in Canada by committing to develop a strategy for the next phase of the Action Plan for Official Languages.

This commitment was reiterated in Budget 2008 which indicated that over the next year, the Government would develop a new Action Plan on Official Languages that would respond to Canada's evolving demographic reality, to promote and protect linguistic duality across the country. On June 19, 2008, the new federal strategy for official languages was announced, the Roadmap for Canada's Linguistic Duality.

Most recently, the 2010 Speech from the Throne included the following statement:

We are a bilingual country. Canada's two official languages are an integral part of our history and position us uniquely in the world. Building on the recognition that the Québécois form a nation within a united Canada, and the Roadmap for Canada's Linguistic Duality, our Government will take steps to strengthen further Canada's francophone identity.

3.1.3 Is the initiative consistent with the federal government's role and responsibilities?

The EDI is consistent with Industry Canada's responsibility as a federal institution to implement Section 41 of the Official Languages Act. Further, it is consistent with the mandate of Industry Canada and FedNor.

This initiative is consistent with the federal government's core role vis-à-vis its legislative responsibilities related to Section 41 of the Official Languages Act. Section 41 requires that federal institutions take positive measures to support the vitality of official language minority communities (OLMCs) and to foster the full recognition and usage of English and French in Canadian society. Industry Canada, through implementing the EDI, is fulfilling this requirement.

The goals and objectives of EDI, which is the economic development component of the Roadmap, are also consistent with the mandate of FedNor which is responsible for economic development in Northern Ontario. The Department of Industry Act, particularly Section 4(2) and Section 8 and 9, set out the Minister's responsibility for regional economic development in Ontario. FedNor is the sole federal presence in Northern Ontario supporting the Minister for FedNor in fulfilling these responsibilities.

EDI directly contributes to Industry Canada's mandate to help make Canadian industry more productive and competitive in the global economy, thus improving the economic and social well-being of Canadians. EDI contributes to Industry Canada's strategic outcome "Canadian businesses and communities are competitive" and is related to the program activity "Community Economic Development" and to the sub activities "Development of Northern Ontario" and "Linguistic Duality and Official Languages".

In addition, as outlined in the 2010–11 Industry Canada Report on Plans and Priorities, EDI contributes to advancing the Department's priority of encouraging business innovation and productivity and promoting economic development in communities.

3.2 Performance

3.2.1 Have the expected outcomes been achieved or are they likely to be?

FedNor utilized its EDI contribution budget to fund 50 projects which led to the development of new expertise through innovation, economic diversification as well as development and maintenance of partnerships and increased support of small- and medium-sized businesses. These immediate results led to achievement of intermediate outcomes; capacities were built and enterprises and communities were developed.

As previously discussed, the analysis of FedNor's EDI performance is in relation to the FedNor EDI outcomes portrayed in the logic model. The remainder of this section is organized into the levels of activities, outputs and outcomes depicted in the logic model.

Activities

The logic model depicts one activity for FedNor: funding of initiatives. As of September 2011, FedNor had funded 50 projects with a total commitment of $3.98 million. At that time, 24 projects had been completed or were scheduled to be completed and the remainder were ongoing. With a total grants and contribution budget of $4.0 million, FedNor was successful in utilizing almost its total budget allocation for the funding of EDI projects.

Outputs from EDI

The one output in the logic model related to FedNor is: partnerships, projects, and activities for the economic development of OLMCs. In terms of partnerships, 24 of the 50 projects were identified as primarily being targeted to creating partnerships (for 3 projects, this information was not available). For the 16 projects for which Final Reports were completed, all created partnerships, with an average of 11.5 partnerships created or maintained per project and with an average of 4 new partnerships per project.

If we extrapolate these averages to all 50 projects funded, we may estimate that 575 partnerships may have been created or maintained as a result of EDI funding and that 200 new partnerships may have been created.

In addition, we know that all 50 projects were funded for activities to be undertaken to further the economic development of OLMCs in some way. In summary all the expected outputs of EDI are being achieved through the funded projects.

Immediate Outcomes from EDI

The immediate result expected from FedNor activities is: development of new expertise through innovation, diversification, partnerships and increased support of small- and medium-sized businesses. In relation to this outcome, the EDI RMAF-RBAF indicates that, "The term, 'new expertise' will differ by region, but encompass support to entrepreneurs for new and improved products and services and opportunities in new or existing markets"13.

FedNor provided EDI funding for each type of project intended to develop new expertise. Specifically, for the 50 funded projects, 11 were classified as supporting diversification, 3 to spur innovation, 24 to create partnerships and 12 to provide SME support.

The 16 Final Reports show that 14 of the projects either created or developed strategic plans, market studies or other studies; created or improved tools or services; or created new and diversified products and services.  This would seem to confirm that the majority of projects led to the development of new expertise through innovation and diversification of activities. In conclusion, all of the funded projects were intended to produce the new expertise outcome and the Final Reports demonstrate that projects appear to have produced this intended outcome.

Intermediate Outcomes from EDI

The logic model depicts three intended intermediate outcomes that are expected to result from EDI:

  • capacities built
  • enterprises developed, and
  • communities developed.

EDI projects are classified by FedNor in terms of their expected intermediate outcomes. Specifically, for the 50 funded projects, 29 (58%) were primarily intended to lead to capacities being built, 10 (20%) to enterprises being developed, and 11 (22%) to communities being developed.

The 16 Final Reports show that 11 projects (69%) resulted in capacities being built, 5 (31%) in enterprises being developed, and 3 (19%) in communities being developed. (The categories are not mutually exclusive.) Overall, these 16 projects resulted in capacity being built in 39 enterprises and 61 communities, 35 enterprises being developed, and 5 communities being developed.

Interviews indicated that the heavy weight of projects under capacities built is indicative of the program's early mandate to cover off youth internship. Other projects aimed at building capacity included strategic planning, fostering new partnerships and creating tools for tourism-related activities.

Overall, all funded projects are consistent with the intended intermediate outcomes of EDI. The Final Reports show that these intended outcomes are achieved in most cases.

3.2.2 Has the initiative been implemented effectively and economically?

The initiative has been implemented effectively and economically as it was delivered by existing staff that had experience with a similar program with similar clients.

This section looks at the implementation of EDI, processing speed, administrative costs, and the leveraging effect of EDI.

Implementation of EDI

In terms of the implementation of EDI, stakeholders suggested that the decentralization of FedNor is a major strength for implementing the EDI, as well as the officers' experience in delivering economic development programming in the region. The qualifications of the FedNor team in charge of delivering the initiative demonstrated:

  • Familiarity with the beneficiaries who have, for the most part, previously received FedNor assistance;
  • Good experience with the nuts and bolts of federal administration, including applying the rules for contribution program management in the region;
  • Teamwork, which shows in the regular conference calls (every 2 or 3  weeks), making frequent consultation on files and reaching a consensus for recommendations possible; and,
  • Great willingness of the officers to assist the applicants in setting up their projects and for preparing the documentation such that it meets the requirements for funding by the initiative.

FedNor's knowledge of the field and the beneficiaries as well as their involvement in the creation of projects is also advantageous with regard to assessing the risk associated with each project and determining mitigation measures. The risk assessment is done systematically when the file is evaluated. It is documented using a form that makes it possible to give a quantitative estimate of the risk level of both the beneficiary and the project. The mitigation measures consist of adapting the intensity of monitoring and audit based on the assessed risk level; the monitoring and audit parameters to be applied are pre-determined based on three levels of risk: low, medium and high.

Processing Speed

In examining processing times, the evaluation considered the timeline between receipt of the complete application and decision to approve the project. The average duration of this approval period was 69 days. This compares favourably to the average NODP approval time of 140 days. However, EDI processing has been conducted in three stages: there were two batch intakes and then the process switched to a continuous intake process and the processing times in the different stages varied significantly. Batch 1 processing time on average was 99 days, while the average time for batch 2 and the ongoing intake was 39 and 67 days, respectively. According to FedNor, processing time for batch 2 declined over batch 1 because of the lessons learned in processing batch 1 and a better understanding of the program.

Administrative Costs

EDI is administered and delivered by the FedNor staff who also deliver NODP, most of whom have been there since the creation of NODP. While EDI had its own guidelines and application form, it was delivered under the NODP Terms and Conditions and was implemented and delivered in a very similar fashion to that of NODP.

Between April 1, 2008 and March 31, 2013, FedNor is to distribute $3.98 million in Grants and Contributions at a total operating cost of $515,102. At just over $100,000 per year, these operating costs represent 1-2 FTEs which would appear to be reasonable for an initiative with the scope of EDI.

Leveraging

EDI projects have leveraged funding from other sources which contributes to the overall efficiency of the initiative. While the EDI set out co-funding criteria for screening projects, it is not mandatory and some projects were funded for 100% of eligible costs. Specifically, 47 of the funded projects secured funding from other sources and three did not.

The analysis of 50 projects approved as of September 2011 shows that there was a leveraging effect of 2.2 (measured by the total cost ratio of projects compared to FedNor contributions). Therefore, for each dollar contributed to a project by EDI, an additional $1.20 of funding was generated from other sources.

Footnotes

  1. 8 Socio-economic profiles of RDÉE. (back to footnote reference 8)
  2. 9 Profile of the Francophone Community of Algoma, Cochrane, Manitoulin, Sudbury, and Profile of the Francophone Community of Muskoka, Nipissing, Parry Sound and Timiskaming, Trillium Foundation 2010. (back to footnote reference 9)
  3. 10 Francophone population defined following the French or mixed mother tongue criterion. (back to footnote reference 10)
  4. 11 See Table A-2, Annex 1. (back to footnote reference 11)
  5. 12 See Table A-3, Annex 1. (back to footnote reference 12)
  6. 13 Integrated Results-based Management and Accountability Framework and Risk-based Audit Framework, Economic Development Initiative, Federal Strategy for Official Languages, "Roadmap for Canada's Linguistic Duality", Version #11, October 29, 2008 (back to footnote reference 13)
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