Executive Summary

The Western Economic Partnership Agreements (WEPAs), a sub-component of the Western Diversification Program (WDP), are multi-year cost-shared federal provincial agreements that are designed to promote the development and diversification of the western Canadian economy and to coordinate federal economic activities in the region. Western Economic Diversification Canada (the Department) employs WEPAs to harmonize regional economic development efforts with provincial governments.

The Department negotiated and signed four-year, cost-shared, WEPAs with each of the four western provinces in the fall of 2003. The four WEPAs represented $200 million of investments over the life of the four agreements, cost shared equally between the federal and four provincial governments. The agreements targeted common federal and provincial priorities, including:

• Innovation-promoting a knowledge-based economy, environmental technologies and life sciences;
• Entrepreneurship-tourism, trade, value-added investment, Aboriginal business development, export readiness; and,
• Community Economic Development-community, rural and northern development.

These three common priorities align with two of the Department's strategic outcomes: Community Economic Development; Entrepreneurship and Innovation.

This report summarises WEPA evaluation findings using methodologies employed and data collected in the broad WDP evaluation. The scope of the report covers the period from 2003 to 2007. During the time period being covered by this report, the department expended over $55 million under the WEPAs. The objectives of the report are:

• to examine the relevance and effectiveness of the WEPAs; and
• to examine the success of the WEPAs.

The results realised can be attributed to the collective investments made by the Department, provincial governments, and other funding partners.

Relevance and Effectiveness of the WEPAs

Findings from the final 2008 Evaluation of the WDP report found that WDP sub-components such as WEPAs respond appropriately to the needs identified in their specific terms of reference by aligning with the needs of the various provincial agencies and departments involved. The four western provincial governments have indicated their desire see the agreements renewed with the governments of Saskatchewan and Manitoba announcing their participation and including its renewal in their budget estimates for 2008-09.

WEPAs are seen as effective and affordable mechanisms, particularly in terms of skill development, by key informants. Because economic development and diversification is seen as a shared responsibility between the provincial and federal governments, each WEPA is able to accommodate this shared mandate and is able to address the needs of the economic community and respond to changes within that community. For every dollar the Department invested through the WEPAs, an additional $1.65 was leveraged from other sources.

Based on information provided in both the administrative database and the key informant interviews, the WEPAs are considered complimentary to other existing programs. WEPAs help increase the coordination of the federal and provincial governments, enhance partnerships and augment networking.

Success of the WEPAs

Strategic Outcome - Community Economic Development

Community economic development accounted for 51% of the WEPA projects and 41% of total WEPA expenditures between the evaluation periods of July 14, 2003 to March 31, 2007.

Investments in community economic development by the WEPAs are intended to strengthen the competitiveness and sustainability of communities with particular focus on rural or northern development. Projects tend to have a community wide emphasis focusing on increasing the viability and diversification of local economies and contributing to enhanced community planning.

61.7% of funding recipients agreed that WEPA funding for their projects helped to increase viability and diversification of local economies and 88.7% felt it contributed to enhanced community planning. Mitigating economic crisis was not a major focus of WEPAs and less than half of funding recipients agreed that their projects achieved results in this area.

Strategic Outcome - Entrepreneurship and Innovation

Entrepreneurship and Innovation accounted for 49% of the WEPA projects and 59% of total WEPA expenditures between the evaluation periods of July 14, 2003 to March 31, 2007.

The WEPA supports initiatives that promote entrepreneurship, which include the development of infrastructure and linkages that strengthen clusters or foster growth within key strategic sectors of the economy. WEPA projects that support innovation invests in infrastructure, skill building and organization by enhancing technology commercialization and technology adoption in firms to support economic growth and maintain the competitiveness of businesses and sectors in western Canada. In some cases, investments in entrepreneurship and innovation have a strong component in each other and also in community economic development.

For entrepreneurship related activities, 93.3% of survey respondents indicated that their projects resulted in increased successful partnerships and strategic linkages and 61.7% of respondents indicating that their projects increased productivity. For innovation activities, 81.7% of survey respondents indicated that their projects resulted in increased education, training, or skill development. About half of respondents indicated that WEPAs increased research and development activities and technological capacity. Slightly less than half of respondents indicated results in technology linkages and in knowledge infrastructure.

Recommendation

The Department should work with the western provincial governments to negotiate the renewal of the WEPAs for future years.