2017-2018 Departmental Results Report

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Table of contents

• Minister's message
• Results at a glance
• Raison d'être, mandate and role: who we are and what we do
  • Raison d'être
  • Mandate and role
• Operating context and key risks
  • Operating context
  • Key risks
• Results: what we achieved
  • Programs
    • Program 1.1: Business Development and Innovation
    • Program 1.2: Community Economic Growth
    • Program 1.3: Policy, Advocacy and Coordination
  • Internal Services
• Analysis of trends in spending and human resources
  • Actual expenditures
  • Actual human resources
  • Expenditures by vote
  • Government of Canada spending and activities
  • Financial statements and financial statements highlights
    • Financial statements
    • Financial statements highlights
• Supplementary information
  • Corporate information
    • Organizational profile
    • Reporting framework
  • Supporting information on lower-level programs
    • Supplementary information tables
    • Federal tax expenditures
    • Organizational contact information
• Appendix: definitions
• Endnotes

Minister's message

I am pleased to present the 2017–18 Departmental Results Report for Western Economic Diversification Canada.

Over the past year, through integrated work across the various organizations of the Innovation, Science and Economic Development Portfolio, the Government of Canada worked very hard to improve Canada's global competitiveness while creating jobs, nurturing growth and strengthening our country's middle class.

In 2017-18, the Portfolio continued to implement the Innovation and Skills Plan to promote innovation and science, including support for scientific research and the commercialization of research and ideas. The Plan also encourages Canadian small businesses to grow, scale-up, and become more productive, more innovative and more export-oriented. An important area of this work included promoting increased tourism in Canada and the creation of new opportunities in our tourism sector. The Plan's overarching aim to position Canada as an innovation leader has been the driving focus of the Portfolio's programs.

The year was also significant for Western Economic Diversification Canada (WD), as it marked 30 years of supporting economic development in the West since its establishment in 1987. In 2017-18, the department's work was driven by two strategic priorities: Innovation and Indigenous Economic Growth to help businesses become more innovative, competitive and inclusive. The department accomplished these results through the delivery of a broad range of investment programs, client services, research and policy development, and convening activities.

Through deep collaborations and inclusive partnerships, the Innovation, Science and Economic Development Portfolio organizations have embarked on a shared journey to stronger, cleaner and more inclusive economic competitiveness that benefits all Canadians. This report documents the contributions that Western Economic Diversification Canada is making towards this important work.

Results at a glance

In 2017-18, Western Economic Diversification Canada (WD) met or exceeded most of its performance indicator targets. The following are results highlights:

• WD-assisted business development and innovation projects reported the creation of 1,924 jobs, including 509 highly qualified personnel (HQP) jobs, in support of the department's strategic priority of Innovation and the Government of Canada's Innovation and Skills Plan.
• WD invested $43.2 million in 57 clean technology projects in support of the department's strategic priority of Innovation and the Government of Canada's Innovation and Skills Plan.
• WD invested $32.2 million in 49 Indigenous projects in support of the department's strategic priority of Indigenous Economic Growth and the Government of Canada's priority to promote economic development and create jobs for Indigenous Peoples.
• WD-assisted projects reported $939 million in international business activity facilitated by the department in support of ministerial mandate letter commitments and the Government of Canada's Trade and Investment priority.
• Based on the latest available data from Statistics Canada, western Canadian firms that accessed lending services through the WD-funded Community Futures (CF) program increased their sales by 8.9 percent and grew their employment by 7.5 percent annually, compared to non-CF clients whose sales increased by 4.4 percent and whose employment grew by 2.6 percent annually from 2010 to 2015.^{Endnote iii}
• In support of the Government of Canada infrastructure priority, 2017–18 saw WD complete 671 Canada 150 Community Infrastructure Program projects in over 395 communities across western Canada, contributing to the health and well-being of communities by enhancing local community infrastructure.
• WD delivered the $7.4 million Drywall Support Program that assisted 187 western Canadian drywall contractors and builders, and 451 residents of the Regional Municipality of Wood Buffalo whose homes were severely damaged or destroyed in the May 2016 wildfires.
• WD also participated in the interdepartmental Economic Pathways Partnership (EPP), which provided Indigenous groups with a single point of access for federal programs that help them benefit from business and employment opportunities related to major energy pipeline projects. WD approved 21 EPP-related investments and helped to organize workshops in all four western provinces for Indigenous stakeholders.

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

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

Raison d'être

Western Economic Diversification Canada (WD) was established in 1987 to promote the development and diversification of the economy of western Canada and to advance the interests of the west in national economic policy, program and project development and implementation. The Minister of Innovation, Science and Economic Development is responsible for this organization.

Mandate and role

WD's mandate, derived from the Western Economic Diversification Act, is to grow and diversify the western Canadian economy. This broad mandate allows WD to deliver a wide range of initiatives across the west, and make strategic investments to build on regional competitive advantages and help grow the western economy. WD also contributes to the Government of Canada's Innovation and Skills Plan, other government-wide priorities, and ministerial mandate letter commitments.

WD has offices in each of the four western Canadian provinces and in Ottawa. Its western base enables the department to foster strong partnerships with business and community organizations, research and academic institutions, Indigenous Peoples, and provincial and municipal governments. These connections help WD reflect western perspectives in national decision-making.

WD supports regional economic diversification and inclusive growth through investment in projects under the Western Diversification Program (WDP) in areas of innovation; business growth; community economic growth; and through policy, advocacy and coordination. The WDP provides funding to not-for-profit organizations for projects directly supporting one (or more) of the four departmental priorities, as presented in WD's 2017–18 Departmental Plan. Under the WDP, through the Western Innovation (WINN) Initiative, WD provides repayable contributions to small and medium-sized enterprises (SMEs) to support the commercialization of technologies or products. WINN has been an important tool in helping western SMEs to accelerate the commercialization of technologies and stimulate greater private sector investment.

In addition, WD supports the Western Canada Business Service Network (WCBSN), which is a network of over 100 independent organizations providing business services to foster inclusive sustainable growth of small businesses across the west. The WCBSN network includes the Canada Business Network (CBN), Community Futures program, Women's Enterprise Initiative, Francophone Economic Development Organizations, Indigenous Business Development Services program, and Entrepreneurs with Disabilities program.

Further, WD serves western Canadian stakeholders by delivering national initiatives on behalf of the federal government in western Canada. These include:

• the Canada 150 Community Infrastructure Program to renovate, expand, and improve existing community infrastructure;
• the Strategic Partnerships Initiative that coordinates the Government of Canada's investments across a range of departments to boost Indigenous participation in economic development opportunities; and,
• the Economic Development Initiative that supports economic development in western Canadian Francophone communities.

For more information on the department's organizational mandate letter commitments, see the Minister's mandate letter.

Operating context and key risks

Operating context

Western Canada accounted for 38 percent of Canada's real Gross Domestic Product (GDP) in 2017, and close to a third of the national population. The regional economy grew by 4.2 percent in 2017, faster than both Quebec and Ontario, and helped drive growth at the national level. In spite of the strong headline growth figures, other indicators remain below desirable levels, and there remain significant regional disparities in economic performance.

Alberta and Saskatchewan returned to positive GDP growth in 2017, rebounding from two years of recession driven by low commodity prices, particularly crude oil. Alberta's economy grew faster than any other province, at a pace of 4.9 percent, but has yet to return to pre-recession levels, while in Saskatchewan, growth in 2017 was a strong 2.9 percent. This rapid rebound represents the uptake of resources that had been idle during the recession, but capital investment in the oil and gas industry remains weak, and there are relatively few new projects being undertaken that will drive future economic growth. Unemployment in both provinces remains significantly higher than it was before the recession.

Contrary to expectations, Manitoba's economic growth accelerated in 2017, rising 2.9 percent, due to strong performance by its manufacturing sector and spillover effects from Alberta and Saskatchewan. In British Columbia, fears of a slowdown failed to materialize and its GDP grew by 3.9 percent, even faster than its country-leading results in 2016.

Over 55 percent of Canada's Indigenous Peoples lived in western provinces in 2016, and the Indigenous demographic is one of the youngest and fastest-growing populations in Canada. In addition, Indigenous small businesses are growing six times faster than in the non-Indigenous market. However, educational attainment and participation in the labour force continue to trail the non-Indigenous population.

Women represent the majority of university graduates. However, only a third of science, technology, engineering, and mathematics graduates are women, although this number is increasing. Enhanced participation of women in these fields would promote diversity in the workforce and help alleviate pressure related to the growing demand for skilled labour that is necessary to succeed in an increasingly innovative economy.

Throughout 2017, WD supported initiatives by the Government of Canada to promote economic development in western Canada, such as the implementation of the Innovation and Skills Plan. These activities included helping to accelerate clean growth through investments in clean technologies and assisting firms with high-growth potential to scale up through the Accelerated Growth Service. The Innovation Supercluster Initiative, led by Innovation, Science and Economic Development Canada (ISED), will lead to increased funding for the Protein Industries and Digital Industries superclusters in western Canada.

Key risks

In the 2017–18 Departmental Plan, WD identified two key risks: lack of capacity and core skills for Indigenous entrepreneurs to develop businesses, and changes in demand for new technologies, including clean technology, in Canada and internationally.

WD's experience with Indigenous programming suggests that specific skills shortages exist in areas such as financial literacy^{Endnote xix}. This capacity gap may present challenges to WD's efforts to improve Indigenous workforce participation and to increase successful Indigenous entrepreneurship. Complicating this, many Indigenous Peoples live in remote communities, which can limit access to existing training opportunities and services. To mitigate these risks, WD supported Indigenous economic development projects that alleviate these barriers.

Historically, WD has supported innovation with a focus on the quality of ideas and products.  The risk with this approach is that failure to assess demand may lead to market failure if innovators are producing good solutions for problems people are not willing to pay to solve. WD did not conduct its own demand analytics as planned, because the department is still in the process of determining a specific and limited set of clusters and technologies to support. However, WD reviewed research on changes in demand for new technologies, including clean technologies. WD will continue this work in order to best position western Canadian businesses to take advantage of new market-driven opportunities. WD also evaluated the demand for new technologies or products as part of the assessment of innovation funding applications.

The following table highlights the response strategies taken by the department in 2017–18 to address these risks.

Results: what we achieved

Programs

Western Economic Diversification Canada (WD) works to grow the western Canadian economy by helping to build businesses that are productive, innovative and export-oriented, while diversifying the base of the western Canadian economy.

In 2017–18, WD advanced its mandate through three programs:

1. Business Development and Innovation.
2. Community Economic Growth.
3. Policy, Advocacy and Coordination.

WD sets targets annually for all performance indicators at the program and sub-program level in the departmental performance measurement framework (PMF). WD tracks progress against targets based primarily upon results that grants and contributions projects report during the fiscal year. In addition, WD collects information on several non-PMF performance indicators to support accountability and programming decision making.

Program 1.1: Business Development and Innovation

Description

Business Development and Innovation supports western Canadian businesses, industry, and research organizations to enhance business innovation, productivity, and global engagement. Value-added production is strengthened through the introduction of new products, technologies, or innovations to existing processes, as well as through efforts to pursue global markets and increase investment in western Canada. Additionally, this program supports some members of the Western Canada Business Service Network and related partners to provide business services and access to capital in western Canada in support of increased entrepreneurism. Transfer payments in support of this program are made under the authority of the Women's Enterprise Initiative and the Western Diversification Program. Funding support of the Canada Business Network is comprised of operations and maintenance funding.

Results

WD tracks the following three indicators to capture the impact of the Business Development and Innovation program:

• value of international business activity facilitated by WD;
• number of small and medium-sized enterprises (SMEs) that increase gross margins; and,
• number of instances of protection of intellectual property exercised.

WD met or exceeded its targets for two of the three program performance indicators (see Results Achieved table).

The target for international business activity facilitated by WD was $346 million and the actual result was $939 million. The variance for this indicator was due to some projects reporting results earlier than expected, and a few short-term projects, which delivered results that were not part of the target-setting exercise. The target for the number of SMEs that increase their gross margins was 11 and the actual result was 36. This variance was due to a key project producing higher results than originally estimated.

The target for the remaining indicator, which captures the number of instances of protection of intellectual property exercised, was 32 and the actual result was 31.

In 2017-18, WD approved $89.1 million in multi-year assistance for 111 Business Development and Innovation projects in support of ministerial mandate letter commitments and its cluster growth and inclusiveness priorities, with a particular focus on clean technology and Indigenous economic growth. The projects are strengthening the western innovation eco-system, enhancing business productivity and innovation, and assisting companies to export into new international markets and attract investment.

WD's efforts to support high-potential firms through the Accelerated Growth Service (AGS) has increased the department's reach within the business community. The AGS helps growth-oriented Canadian businesses to expand by helping them access the key government services they need to grow, such as financing, exporting, innovation and business advice. AGS participation has become an opportunity to promote WD programming while facilitating stronger collaboration and interaction with other federal departments. WD successfully supported 45 AGS teams in 2017-18.

WD also launched its fourth intake of the Western Innovation Initiative, which was informed by lessons learned from previous intakes. Because of examining key policy issues, and recommendations from WD's Grants and Contributions Modernization Review, WD revised application and assessment processes. These changes included the implementation of an expression of interest stage, reduced submission requirements, and greater engagement with applicants. WD also changed this intake to reflect the departmental priority related to cluster growth.

A key business development and innovation project supported by WD was the Indigenous Forestry Program in Alberta and British Columbia. The recipient provided technology transfer, business planning, product and market development support to Indigenous businesses in the forestry sector. This project improved Indigenous business competitiveness through site visits, conducting technical assessments, delivering workshops, and coordinating demonstration projects. To date, this initiative has led to 130 SMEs investing in adoption of sound management or business practices or technology, which will assist with implementing new manufacturing processes.

WD funded two projects with Solido Design Automation in Saskatchewan. The purpose was to expand and accelerate the development and commercialization of their machine learning-based software products used to make electronic chips for devices such as smartphones and tablets. Results include creation of 26 HQP jobs and incremental sales of $2.1 million. On November 20, 2017, Solido announced their acquisition by Siemens Canada, a global technology powerhouse located in Saskatoon, Saskatchewan. The acquisition further expands the scope of Solido's research and development activities, into other areas of automating electronic chip design as well as digitalization of full systems.

WD completed an evaluation of its innovation investments from 2010-11 to 2014-15.  The evaluation identified the following three recommendations:

• tracking longer-term outcomes of projects after project completion;
• improving the frequency and predictability of its programming, and its interaction with applicants during the assessment stage; and,
• providing meaningful feedback to unsuccessful applicants on their applications.

WD is in the process of addressing the recommendations through implementation of its management response action plan.

Note: Results are based on active projects reporting during the fiscal year and are not cumulative from previous year(s). Consequently, trends analysis would not be an accurate way to assess these results.

Program 1.2: Community Economic Growth

Description

Community Economic Growth involves economic development initiatives that support communities to advance their economies, adjust to changing and challenging economic circumstances, and recover from depressed economic circumstances. This is achieved through both direct funding of projects, as well as funding support of the Community Futures (CF) organizations. Additionally, this program assists communities to assess community strengths, weaknesses, opportunities, and potential for new economic activity, and to develop and implement community plans. Transfer payments in support of this program are made under the authority of the Western Diversification Program and the Community Futures Program.

Results

WD tracks three indicators to capture the impact of the Community Economic Growth program:

• SME sales growth;
• number of communities benefitting from Community Economic Growth projects; and,
• number of communities benefitting from federal public infrastructure investments.

WD met or exceeded its targets for two of the three program performance indicators. (see Results Achieved (tb2) table).

The target for SME sales growth was 10.0 percent and the actual result was 8.9 percent. The target for number of communities benefitting from Community Economic Growth projects was 1,375 and the actual result was 1,431.

The target for the number of communities benefitting from federal public infrastructure investments was 416 and the actual result was 671. The reason for the significant variance is that infrastructure projects took longer to complete than planned due to unfavourable weather, and other regulatory and procurement challenges during the previous fiscal year, shifting results into this fiscal year.

WD renewed a majority of Community Futures (CF) and all Women's Enterprise Initiative (WEI) agreements for three years, enabling CFs and WEIs to continue to provide business advice and services to western Canadian entrepreneurs. This resulted in helping entrepreneurs in starting and expanding their businesses, and creating jobs.

The WCBSN partners provided training to over 41,000 participants. WCBSN partners also provided 46,745 business advisory services to businesses in rural and urban areas. In addition, the CFs provided 1,379 loans to rural businesses with a value of $70.1 million that leveraged an additional $56.6 million. The WEIs provided 71 loans to women-owned businesses with a value of $5.5 million that leveraged an additional $8.6 million. WCBSN impacts included 4,678 jobs created, maintained, or expanded through lending.

WD also continued to support the Indigenous Business Development Services (IBDS), the Entrepreneurs with Disabilities Program (EDP), the Economic Development Initiative (EDI), and the Francophone Economic Development Organizations (FEDO) initiatives in western Canada. This programming contributes to the Government of Canada's inclusive growth priority. It enhances the ability of targeted groups such as Indigenous Peoples, Francophones and people with disabilities to start, grow and expand their businesses. Of note, the Manitoba FEDO established a mentoring network to help budding entrepreneurs, which received a mentorship award from Réseau M, a large mentorship network based in Montreal.

A 2017–18 analysis^{Endnote xxxii} of data from CFs regarding their loan clients, compared to similarly sized and located companies contained in Statistics Canada's database, demonstrated continued outperformance by CFs, as follows:

• In terms of employment growth from 2010 to 2015, CF assisted firms increased their number of employees by 7.5 percent compounded annually compared to a 2.6 percent in non-assisted firms.
• In terms of sales from 2010 to 2015, CF assisted firms exhibited 8.9 percent compounded annual sales growth rate compared to a 4.4 percent for non-assisted firms. In addition, it appears that CF loan clients were able to withstand initial shocks to economic activity better than firms without CF assistance. Sales growth of CF assisted firms also tends to outperform sales growth of comparable firms during period of economic shock.
• CF assisted firms exhibited significantly stronger longevity at 68 percent for a 5-year survival rate than non-assisted firms did at 46 percent.

The Government of Canada implemented the Churchill Region Economic Development Fund to assist the residents of Churchill, Manitoba, and communities along the Hudson Bay Rail Line, affected by the suspension of grain operations through the Port of Churchill. WD oversees the fund, which has supported 26 projects worth $3.2 million. Projects have been instrumental in reducing the impact of the closure of the rail line on Churchill and other communities in the northern Manitoba region. In terms of results, projects have provided 80 training opportunities for Northerners, assisted 13 businesses that have incurred incremental shipping costs, and supported other community economic development activities.

Under the Canada 150 Community Infrastructure Program (CIP 150), WD invested in projects across western Canada, supporting the renovation, expansion and improvement of existing community infrastructure. This included sports, recreational, cultural, community, and tourism infrastructure. CIP 150 was part of Canada 150, the Government of Canada's celebration of the 150^th anniversary of Confederation. CIP 150 completed in 2017-18.

For CIP 150, a key lesson learned for the department is that in dealing with infrastructure projects ongoing follow up with recipients is crucial to help address and mitigate issues arising during construction.

WD initiated and concluded the delivery of $7.4 million Drywall Support Program that assisted 187 western Canadian drywall contractors and builders, and 451 residents of the Regional Municipality of Wood Buffalo whose homes were severely damaged or destroyed in the May 2016 wildfires. This program was delivered on behalf of the department of Finance and provided relief to the affected builders and contractors impacted by elevated drywall costs, due to fixed-price building contracts committed to before the imposition of duties on imported drywall from the United States.

* No results for infrastructure programming were expected for 2015-16. The results achieved for 2016–17 represents projects completed under the Canada 150 Community Infrastructure Program.

Note: Additional funding received for the Drywall Support Program and reprofile of the 2016-17 Canada 150 Community Infrastructure Program funds to 2017-2018.

Note: Actual FTE utilization is higher than planned because of increased activities to support Canada 150 Community Infrastructure Program and the Drywall Support Program.

Program 1.3: Policy, Advocacy and Coordination

Description

Policy, Advocacy, and Coordination arises from the Western Economic Diversification Act and empowers the Minister to advance the interests of western Canada through policies and programs and by establishing cooperative relationships with key stakeholders. Policy, Advocacy and Coordination efforts enable WD to: provide a strong voice for western Canada, which results in effective strategies, policies, and programs that address economic development needs; lead federal and intergovernmental collaboration to pursue key opportunities for long-term growth and diversification in areas of federal or shared federal-provincial jurisdiction; and, enable economic analysis activities to be carried out, which ultimately assist with informing policy and program decisions. Transfer payments in support of this program are made under the authority of the Western Diversification Program.

Results

Through economic analysis and stakeholder engagement, WD continually refines its Policy, Advocacy and Coordination (PAC) program to meet the changing priorities of western Canadians and the needs of the business community.

In 2017-18, WD developed a new departmental framework that prioritizes cluster growth and inclusiveness. WD policy and program teams from every region organized working groups to develop strategies in areas such as clean technology, agriculture and agri-food, life sciences, advanced manufacturing, youth and Indigenous economic growth. Working group activities are ongoing, but have included research and analysis of current conditions, and proposed strategies for support. The working groups also began to engage stakeholders to validate options for departmental action and collaboration. This work is helping to shape WD's investment, strengthening its advocacy, and convening activities.

Throughout 2017-18, WD also participated in the interdepartmental Economic Pathways Partnership (EPP), which provided Indigenous groups with a single point of access for federal programs that help them benefit from business and employment opportunities related to major energy pipeline projects. Along with core federal partners, such as Natural Resource Canada's Indigenous Partnerships Office – West, Indigenous Services Canada, Employment and Social Development Canada, and ISED, WD helped to organize workshops in all four western provinces for Indigenous stakeholders. In 2017-18, WD approved 21 EPP-related investments benefitting Indigenous communities.

To deliver on its mandate to promote the Industrial and Technological Benefits policy, WD helps connect western Canadian businesses to opportunities in the defence, security, marine and aerospace industries. It does so by providing information and support to SMEs, by convening potential partners, and by promoting western interests through its participation in, and support of, key industry events such as the Saskatchewan Aerospace and Defence Forum and WestDef.

Through its on-the-ground intelligence gathering and economic analysis, WD identifies key issues and supports policy development at the departmental and national level to identify challenges. For example, WD undertook research to support ISED's Economic Strategy Tables. WD provided ISED with analysis on all six Economic Strategy Tables in western Canada, including economic indicators, provincial government policies, and regional institutional support. This research enhanced the Government of Canada's understanding of innovation ecosystems in western Canada and supported its inclusiveness priority.

Note: Results are based on a 2014 WD survey of PAC stakeholders.^{Endnote xxxvii} This survey was not conducted this year because WD was in the process of developing a new departmental results framework to allow better reporting in the future.

Information on WD's lower-level programs is available on WD's website and in the GC InfoBase.

Internal Services

Description

Internal Services are those 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

WD continues to contribute to the Government of Canada's Blueprint 2020 initiative and the Government of Canada's Federal Public Service Workplace Mental Health Strategy as demonstrated by the following WD results from the 2017 Public Service Employee Survey (PSES):

• 90 percent are proud of the work they do and 88 percent would recommend WD as a great place to work;
• 82 percent feel encouraged to be innovative or take initiative at work;
• 85 percent indicated that WD raises awareness of mental health and 79 percent describe workplace as being psychologically healthy; and,
• 89 percent indicated that WD supports a diverse workplace and 96 percent feel WD treats them with respect.

WD's Deputy Minister is responsible for and chairs Regional Federal Councils in western Canada. On May 10, 2017, the first Prairie Innovation Fairs were held in Winnipeg, Regina, Saskatoon and Edmonton. The Prairie Federal Council Secretariat organized the fairs in collaboration with the Public Service Renewal Secretariat of the Privy Council Office (PCO). Approximately 350 public servants attended the Prairie fairs with representation from 23 departments and agencies. The Prairie Innovation Fairs highlighted stories of innovation and allowed participants to build stronger networks with fellow public servants and exchange innovative tools and practices both inside and outside the public service. BC region also held an Innovation Fair on the same day as the Prairie Innovation Fairs.

WD continues to enhance its business processes, tools and practices to improve the efficiency and effectiveness of its program delivery and services to Canadians. For example, WD continued collaboration with other regional development agencies and departments in the design and build of a common client-centric grants and contributions system. This new system will provide improved services to the public through streamlined tools including online access to services, greater transparency through web portal and timely responses to client queries. This user-friendly system will replace multiple legacy systems and provide capability for full project life cycle management.

WD exceeded its targets for all the grants and contributions client service standard results in 2017-18. WD also participates in the Government of Canada's Open Government initiative by making relevant data accessible to the Canadian public and the businesses community through the Government of Canada's Open Data Inventory portal. The portal provides one-stop access to the Government of Canada's searchable open data and open information and supports the ministerial mandate letter commitments. It increases transparency and accountability, as well as strengthens the foundation for collaboration between government and citizens, which ultimately contributes to better outcomes for Canadians.

WD commenced the modernization of its Winnipeg and Vancouver offices towards Government of Canada Workplace 2.0 standards that creates modern workplaces by putting in place open, flexible office spaces and mobile digital tools to promote the ability to work from anywhere at any time. WD will provide each staff member with a height adjustable work desk and office ergonomic training to create a more active workplace. The new work environment promotes collaboration between employees and fosters knowledge sharing between WD units.

In addition, WD continued to expand the use of video conferencing, web-based tools and other wireless connectivity technologies for participating in and conducting inter-regional meetings, training sessions, and day-to-day activities. This aligns WD with the government's workplace modernization and Destination 2020 strategy.

WD participated in the Federal Sustainable Development Strategy (FSDS) and contributed to the Greening Government Operations targets through the Internal Services program. The department contributed to the following target areas of Theme IV (Shrinking the Environmental Footprint – Beginning with Government) of the FSDS: e-waste, printing unit reduction, paper consumption, green meetings, and green procurement. For additional details on WD's Departmental Sustainable Development Strategy, please see the list of Supplementary Information Tables in Section III.

Analysis of trends in spending and human resources

Actual expenditures

The figures presented in the chart above reflect the impact the Canada 150 Community Infrastructure Program had on the department's overall spending. Actual and planned spending increased in 2016–17 and 2017–18 as a result of the Canada 150 Community Infrastructure Program.

In addition, the figures presented in the chart above do not include funds spent on behalf of other government departments. 2016–17 was the last year of the Building Canada Fund (BCF). WD expended approximately $9.1 million on behalf of Infrastructure Canada, under the BCF.

*WD is transitioning to the new departmental results framework.

Planned spending of $199.6 million for 2017-18 increased by $32.4 million through receipt of new authorities and reprofiling of funds. WD received new authorities of $11.9 million for the Drywall Support Program, $5 million for a Budget 2017 funding enhancement for the Western Diversification Program, $2.2 million for collective bargaining agreement adjustments, $1.9 million operating budget carry forward and $0.8 million from the collection of repayable contributions. In addition, $10.8 million was reprofiled from the 2016-17 Canada 150 Community Infrastructure Program. WD also had various other minor adjustments resulting in a reduction of $0.2 million.

Actual human resources

*WD is transitioning to the new departmental results framework.

Human resource levels in WD continue to be stable and the minor fluctuations that occur reflect resource realignments in support of priorities and projects. The department will continue to achieve its results by allocating its human resources to best support its programs.

Expenditures by vote

For information on the WD's organizational voted and statutory expenditures, consult the Public Accounts of Canada 2017–2018.

Government of Canada spending and activities

Information on the alignment of the WD's spending with the Government of Canada's spending and activities is available in the GC InfoBase.

Financial statements and financial statements highlights

Financial statements

The complete WD financial statements [unaudited] for the year ended March 31, 2018 are available on the departmental website.

Financial statements highlights

The financial highlights presented within this Departmental Results Report are intended to serve as a general overview of WD's financial position and operations. The unaudited financial statements are prepared in accordance with accrual accounting principles (the link to complete financial statements is above).

WD's Future-Oriented Statement of Operations (unaudited) for the year ended March 31, 2018, are available on the departmental website.

Total expenses were $210.7 million in 2017–18, a net increase of $45.0 million (27 percent) over 2016–17. This year-over-year net increase is attributed primarily to additional transfer payment expenses under the Canada 150 Community Infrastructure Program ($19.6 million), Western Diversification Program ($16.8 million), and the Drywall Support Program ($7.4 million).

Total net liabilities were $73.2 million at the end of 2017–18, a net increase of $9.4 million (15 percent) over 2016–17. This year-over-year net increase is attributed to the establishment of accounts payable balances for the Western Diversification Program, and (ii) reductions in accounts payable funded under the Western Innovation Initiative and the Canada 150 Community Infrastructure Program.

Total net financial assets were $70.7 million at the end of 2017–18, an increase of $9.4 million (15 percent) over 2016–17. This year-over-year increase in these assets primarily consists of the "Due from Consolidated Revenue Fund" ($70.6 million), which is used to discharge WD's liabilities. Given WD's liabilities were higher than the previous fiscal year, the "Due from Consolidated Revenue Fund" also increased.

Supplementary information

Corporate information

Organizational profile

Appropriate Minister:

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

Institutional head: Dylan Jones

Ministerial portfolio: Innovation, Science and Economic Development

Enabling instrument(s):
Western Economic Diversification Act, R.S.C. 1985, c.11, (4^th Supplement)

Year of incorporation / commencement: 1987

Other:

Headquarters - Edmonton, Alberta

Offices - Vancouver, British Columbia

Edmonton and Calgary, Alberta
Saskatoon, Saskatchewan
Winnipeg, Manitoba
Ottawa, Ontario

Reporting framework

The Western Economic Diversification Canada's (WD) Strategic Outcome and Program Alignment Architecture of record for 2017–18 are shown below:

Supporting information on lower-level programs

Supporting information on results, financial and human resources related to WD's Program Inventory is available in the GC InfoBase.

Supplementary information tables

The following supplementary information tables are available on the WD website.

1. Departmental Sustainable Development Strategy
2. Details on transfer payment programs of $5 million or more
3. Evaluations
4. Fees
5. Internal audits
6. Response to Parliamentary Committees and external audits
7. Up-front multi-year funding
8. Performance measurement framework methodologies

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 each year in the Report on 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

Western Economic Diversification Canada

Suite 1500, 9700 Jasper Avenue
Edmonton, Alberta T5J 4H7

Telephone:      780-495-4164
Fax:      780-495-4557
Web:      http://www.wd-deo.gc.ca

Appendix: definitions

appropriation (crédit)

Any authority of Parliament to pay money out of the Consolidated Revenue Fund.

budgetary expenditures (dépenses budgétaires)

Operating and capital expenditures; transfer payments to other levels of government, organizations or individuals; and payments to Crown corporations.

Departmental Plan (plan ministériel)

A report on the plans and expected performance of an appropriated department over a three-year period. Departmental Plans are tabled in Parliament each spring.

Departmental Results Report (rapport sur les résultats ministériels)

A report on an appropriated department's actual accomplishments against the plans, priorities and expected results set out in the corresponding Departmental Plan.

evaluation (évaluation)

In the Government of Canada, the systematic and neutral collection and analysis of evidence to judge merit, worth or value. Evaluation informs decision making, improvements, innovation and accountability. Evaluations typically focus on programs, policies and priorities and examine questions related to relevance, effectiveness and efficiency. Depending on user needs, however, evaluations can also examine other units, themes and issues, including alternatives to existing interventions. Evaluations generally employ social science research methods.

experimentation (expérimentation)

Activities that seek to explore, test and compare the effects and impacts of policies, interventions and approaches, to inform evidence-based decision-making, by learning what works and what does not.

full-time equivalent (équivalent temps plein)

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.

gender-based analysis plus (GBA+) (analyse comparative entre les sexes plus [ACS+])

An analytical approach used to assess how diverse groups of women, men and gender-diverse people may experience policies, programs and initiatives. The "plus" in GBA+ acknowledges that the gender-based analysis goes beyond biological (sex) and socio-cultural (gender) differences. We all have multiple identity factors that intersect to make us who we are; GBA+ considers many other identity factors, such as race, ethnicity, religion, age, and mental or physical disability. Examples of GBA+ processes include using data disaggregated by sex, gender and other intersecting identity factors in performance analysis, and identifying any impacts of the program on diverse groups of people, with a view to adjusting these initiatives to make them more inclusive.

government-wide priorities (priorités pangouvernementales)

For the purpose of the 2017–18 Departmental Results Report, those high-level themes outlining the government's agenda in the 2015 Speech from the Throne, namely: Growth for the Middle Class; Open and Transparent Government; A Clean Environment and a Strong Economy; Diversity is Canada's Strength; and Security and Opportunity.

horizontal initiative (initiative horizontale)

An initiative where two or more departments are given funding to pursue a shared outcome, often linked to a government priority.

Management, Resources and Results Structure (structure de gestion, des ressources et des résultats)

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 (dépenses non budgétaires)

Net outlays and receipts related to loans, investments and advances, which change the composition of the financial assets of the Government of Canada.

performance (rendement)

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 (indicateur de rendement)

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 (production de rapports sur le rendement)

The process of communicating evidence-based performance information. Performance reporting supports decision making, accountability and transparency.

plan (plan)

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.

planned spending (dépenses prévues)

For Departmental Plans and Departmental Results Reports, 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 Departmental Plans and Departmental Results Reports.

priority (priorité)

A plan or project 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) or Departmental Results.

program (programme)

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 (architecture d'alignement des programmes)

A structured inventory of an organization's programs depicting the hierarchical relationship between programs and the Strategic Outcome(s) to which they contribute.

result (résultat)

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 (dépenses législatives)

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 (résultat stratégique)

A long-term and enduring benefit to Canadians that is linked to the organization's mandate, vision and core functions.

sunset program (programme temporisé)

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 (cible)

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 (dépenses votées)

Expenditures that Parliament approves annually through an Appropriation Act. The Vote wording becomes the governing conditions under which these expenditures may be made.