Introduction

Western Diversification Program

The Western Diversification Program (WDP) is WD's major program and provides support to projects that develop and diversify the Western Canadian economy. The WDP is "a tool for working with western Canadians to make strategic investments designed to enhance and strengthen the economy in Western Canada." ¹

As an umbrella program, the WDP has a number of sub-components that operate under its program authority. One of these sub-components is the Western Economic Partnership Agreements (WEPAs) with each of the four western Canadian provincial governments.

Western Economic Partnership Agreements (WEPAs)

WEPAs 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. The Department employs WEPAs to harmonize regional economic development efforts with provincial governments.

The first formal type of federal-provincial agreement for economic development in western Canada - the General Development Agreements (GDAs) - was ratified in 1974. In 1984, the GDAs were replaced with a new "umbrella" agreement - Economic Regional Development Agreements (ERDAs) between 1984 to 1994. The reponsibility for the ERDAs was transferred to the Department in 1987. In 1990, ERDAs were reconfigured and renamed the WEPAs.

The Department negotiated and signed the most recent four-year, cost-shared, WEPAs with each of the four western provincial governments in the fall of 2003. The WEPAs represent a total of $200 million of investments, cost shared equally between the federal and provincial governments ($50 million cost shared with each province). Projects under those agreements could be approved up until March 31, 2008, although expenditures on the approved projects could continue after that date.

WEPAs help the federal government build positive relationships with the four western provinces. They provide a valuable instrument for joint planning, for reducing overlap and duplication, and they serve as a visible demonstration of federal-provincial cooperation and action.

WEPAs are based on the following principles:

1. Cost-sharing with provincial governments on a 50-50 basis.
2. Partnership and joint federal provincial planning and decision-making.
3. Equal allocation of resources among the four provinces.
4. Sustainable growth, not short-term relief.
5. Building on strengths and enhancing competitiveness to achieve a more sustainable economic base.
6. Recognition of unique characteristics of each provincial economy while at the same time being consistent with national economic development policies.
7. Encouraging incrementality, private and institutional participation.
8. Coordinating and enhancing ongoing federal and provincial government and industry activities.
9. Reducing overlap and duplication by enhancing coordinating economic development activities of the federal and provincial governments.
10. Flexibility of delivery terms (i.e. unilateral, joint or third-party delivery). Both parties may fund individual projects equally, entirely by one of the parties, or some combination in between.

The agreements target common federal and provincial priorities, including:

Innovation- strengthen the western Canadian innovation system by increasing capacity, awareness, and use of new technologies; creating greater linkages between communities and private/research/educational institutions; and creating new, and strengthening existing technology clusters.

Entrepreneurship- improving business services and information, and developing the skills and capacity of western Canadian businesses to result in an increase in new businesses or to enhance existing businesses. Increase investment in western Canada, and increase trade and export opportunities to enhance the competitiveness of western businesses in the global economy.

Community Economic Development- enhance the ability of communities to access and take advantage of opportunities for economic growth and ensure that social, environmental and economic factors are considered when addressing community needs.

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

Each of the agreements also reflects priorities identified by the signing provincial government. Thus in Manitoba, the Canada-Manitoba WEPA integrates the above strategic priorities as well as the promotion of sustainable economic growth through rural, northern, and urban initiatives that use a community-based economic development approach.

In Saskatchewan, the WEPA objectives include increasing productivity, export readiness, investment retention and attraction; contributing to the knowledge based economy; supporting Aboriginal participation in key sectors of the economy; and assisting in the diversification and value-added processing of primary resources.

In Alberta, investments that strengthen innovation and value-added industries and those that improve the viability, prosperity, and quality of life in Alberta communities through initiatives that contribute to a sustainable approach to regional development that incorporates economic, environmental, and social considerations are priorities identified by the provincial government.

The priorities for funding under the Canada-British Columbia WEPA fall into four categories - tourism, innovation, entrepreneurship, and sustainable communities. Fifty percent of WEPA funding is being spent in the BC "Heartlands", an area that includes the entire province except for Vancouver and Victoria.

Following the expiry of the WEPA agreements in March 2008, previously approved projects have a two-year time frame in which to be completed. Table 1-1 shows the regional distribution of WEPA funding amounts approved within the timeframe of the agreements (March 31, 2003 to March 31, 2008).

Table 1-1
Distribution of WEPA Funding Amount by Region

Region	WEPA Funding Amount	Total Project Costs*	% of Projects Costs Approved by WEPA
British Columbia	$24,788,219	$95,873,842	26%
Saskatchewan	$23,873,581	$79,489,624	30%
Alberta	$24,793,880	$74,729,532	33%
Manitoba	$25,622,795	$74,512,314	34%
Total	$99,078,475	$324,605,313	31%

Reference: WD Infoquest - WEPA Report
*Total project costs includes funding from WD, provincial sources, client contributions and all other funding sources

Context for the Report

Departmental management requested that as part of the Evaluation of the Western Diversification Program (WDP), data related to WEPAs be collated and analysed for results to assist in determining if the WEPAs should be renewed. This report summarises WEPA evaluation findings from data generated under the broad WDP evaluation. The scope of the report covers the period used for the WDP evaluation from 2003 to 2007.

The Head of Evaluation used a risk-based approach to determine the extent of the evaluation coverage and the appropriate methodology to conduct this evaluation of the WEPAs. The Head of Evaluation determined that based upon the maturity of the WEPAs and their predecessor agreements, the past evaluation coverage and positive results, and the adequacy of data recently collected under the WDP Evaluation, the methodology and scope adopted for this report was appropriate for its intended purpose.

The objectives of the report are:

• To examine the relevance and effectiveness of the WEPAs.
• 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.

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¹Western Economic Diversification Canada (n.d.) Western Diversification Program. http://www.wd-deo.gc.ca/eng/301.asp