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2.1 Profile of Project Sponsors

One of the objectives of the evaluation study was to develop a profile of organizations that have received TJF funding and of the types of activities that have been funded under TJF. The majority of project sponsors are non-union (85 percent) private sector companies (82 percent) that operate out of one location (76 percent) (Exhibit 2.1). Private sector companies were more likely than public sector organizations to be involved in manufacturing (51 versus 8 percent respectively), whereas public sector organizations were more likely than private sector businesses to be involved in tourism (30 versus 5 percent respectively) and in social services (13 versus 2 percent respectively). In addition, projects led by public sector organizations were more likely than those with private sector companies to have been completed (59 versus 35 percent respectively) at the time of the survey. This is likely a function of the types of projects that were approved early in the TJF program.

TJF was generally targeted toward small and medium sized organizations. Half of the project sponsors employ between 10 to 99 people (medium sized companies) but a large proportion (33 percent) have fewer than 10 employees (small companies). Small companies were more likely than larger (more than 100 employees) and medium sized companies to be in the tourism industry (18 versus 5 and 4 percent respectively). Conversely, the larger and medium sized companies were more likely than small companies to be in manufacturing (63 and 50 versus 27 percent respectively).

2.2 Profile of Projects

The majority of sponsors (94 percent) had only one agreement under TJF and at the time of the survey, 37 percent of these projects had been completed. Three quarters of the projects targeted new job creation and one quarter targeted new job creation and averting lay-offs. The largest proportion of TJF projects were located in the Atlantic provinces (42 percent) and Quebec (41 percent) and most involved year-round operations.

According to project sponsors, the main reason for applying for TJF funding was to expand an existing operation (47 percent), followed by creating a new business (35 percent), accelerated creation or expansion of a business (9 percent), and the introduction of a new business line (6 percent). A small minority of respondents (3 percent) mentioned maintaining the operation at its existing level as the main reason for applying (Exhibit 2.2).

The largest proportion of projects were in manufacturing (43 percent), followed by tourism/hospitality (14 percent), aquaculture/silviculture/ forestry/agriculture (14 percent), technology related businesses (8 percent) and sales/service businesses (7 percent). Projects in Quebec were more likely than those in the Atlantic provinces to involve manufacturing (63 versus 29 percent), whereas those in the Atlantic provinces were more likely than Quebec projects to involve aquaculture and related primary industry businesses (10 versus 1 percent respectively).

2.3 Project Financing

Across all projects included in the evaluation, the survey data indicate that the average total cost was about $1.4 million (Exhibit 2.3). This includes TJF funding, contributions from the project sponsors and other sources, if any. One in four sponsors reported their projects as under $250,000. Thirty percent reported their project as costing $1 million or more.

Projects were most likely to have received financing in addition to TJF through private sector investors (45 percent), provincial government (28 percent), and federal government (27 percent) (Exhibit 2.4). Private sector-led projects were more likely to have secured contributions from private sector investors, while public sector sponsors tended to access multiple sources of public and private sector funding. Federal government contributions were more likely in the Atlantic (likely a result of the presence of ACOA) and for smaller projects and projects in smaller communities (i.e., less than 10,000 population).

The average TJF funding received was $192,000. Thirty-eight percent of projects received less than $100,000 from the program, while 28 percent received $250,000 or more. The proportion of TJF funding compared to total project cost was about 14 percent across all projects. This was calculated by dividing the average amount of TJF funding by the average total cost of projects across all cases in the sample.

The share of TJF funds as a proportion of total project cost varied significantly by project size – the proportionate contribution of TJF is significantly smaller in larger (i.e., higher cost) projects. Partner contributions were also higher for Quebec and British Columbia (Exhibit 2.5). Another way to calculate the ratio of TJF to total project cost is to average this ratio on a project-by-project basis; using this methodology, TJF funds account for an average of 33 percent of total project costs.

TJF funds were more likely to be used for labour expenses such as wages rather than for capital investments. Across all projects, about 60 percent of TJF funds were used for labour expenses (Exhibit 2.6). Forty-two percent of project sponsors reported that between 75 and 100 percent of their TJF funds were used to cover labour expenses. According to project sponsors, one-third (34 percent) of TJF funds on average were used to cover capital expenses. One in five project sponsors reported that between 75 and 100 percent of their TJF funds were used for capital expenses.