Canada Community Investment Plan
Mid-term Review
March 31, 2000
Executive Summary
The purpose of this report is to present the findings of the midterm review of the Canada Community Investment Plan (CCIP). The CCIP, a pilot program, addresses the problem facing small and medium-sized enterprises (SME) located outside major financial centres dealing with the challenge of financing their growth by improving access to existing sources of risk capital.
Industry Canada (IC) put in place mechanisms to meet the CCIP Program objectives, which are:
- to identify, based on selected demonstration projects, those best practices that facilitate access to growth capital for SMEs;
- to implement an investment skills development initiative for Canadian SMEs; and
- to disseminate effective strategies, new ideas and experiences in equity financing.
The general objective of the midterm review was to evaluate the effectiveness of the program and mechanisms put in place by Industry Canada to attain the CCIP program objectives. The midterm review focused mainly on the implementation processes and monitoring mechanisms required to adequately deliver the program. The final evaluation, to be conducted at a later date, will assess the level of success of the program in attaining the CCIP objectives.
CCIP Implementation
In the Treasury Board submission dated May 27, 1996, Industry Canada outlined three main components of the CCIP:
- The National Call for Demonstration Projects;
- The Skills Development and Toolkit Component; and
- The Information Exchange Component.
Each of these three components has been implemented by IC, though it took somewhat longer than intended to implement the Skills Development and Toolkit Component and the Information Exchange Component.
Achievement of Program Objectives
Achievement of overall program objectives has been quite good. The only unintended impact of the program identified by participants was an identification of educational needs related to risk capital. The only negative impact identified was the creation, by original demonstration project sponsors, of unrealistic expectations at the community level. The achievement of demonstration project objectives has been much more uneven.
Small and medium-size enterprises (SMEs) interviewed for the study indicated that awareness of the program seemed to be reasonably high, especially among targeted sectors. However, interviewees seemed to have poor knowledge of the full range of services available from the demonstration projects. None of the SMEs were familiar with the Steps to Growth Capital web site or workshops.
Communication and Monitoring of Results
Feedback related to IC's data collection approach was quite positive. The Quarterly Activity Reporting mechanism was seen as being appropriate in terms of type of information collected, level of detail requested and frequency of the reporting cycle. Several positive comments were made regarding the mix of qualitative and quantitative fields. No gaps were identified in the current data collection process.
A number of participants made suggestions as to how communication and monitoring of results could be improved. Some participants suggested that demonstration projects should submit annual business plan updates to reflect evolving priorities. Another suggestion was the continued and expanded use of audits for community projects. For the final evaluation, it was felt that surveys of targeted groups should be used to assess the impact of the program. Further, a number of potential performance indicators were identified by participants.
Support to Community Operations and Activities
Very positive feedback was received regarding the level and appropriateness of IC's support to community projects, particularly the coordination of biannual conferences and regional teleconferences. Feedback on Steps to Growth Capital was mixed, though it was acknowledged that IC is currently working to address their concerns. Projects generally felt that they were receiving satisfactory and sufficient support from Regional Development Agencies and the Business Development Bank of Canada, though it was found that the level of involvement of these players varies considerably by region. It was also noted that several other community organizations have been very active in supporting the demonstration projects.
Identification and Dissemination of Best Practices
There was general agreement that it would be very difficult to establish formal criteria for identifying best practices. It was felt that the current process used by IC to identify best practices was working well and should be continued. Also felt to be working well was the current dissemination process, though some concern was expressed that there is a language barrier to sharing information with Québec projects. While it was acknowledged that not all best practice information is transferable between communities and projects, it was generally agreed that all available information should continue to be shared. It was suggested that more contextual information is required at the outset of best practice information, allowing readers to quickly identify what is most transferable to their own situation and needs.
Management Action Taken (November 2000)
Recommendations 1&2:
That IC work with communities to develop local communications plans to convey to potential users the full range of services offered by the CCIP and that they communicate this to potential clients.
IC managers have re-emphasized this point during a semi-annual conference in Quebec City in May 2000, and have encouraged the communities to make their services better known. The services of a communications firm retained by IC were offered to the communities to help them in this process.
Recommendation 3:
That IC communicate to communities a clear vision regarding what are its expectation for the CCIP program.
IC's vision and expectations for the CCIP were fully discussed with the communities at the May 2000 semi-annual conference in Quebec City. (i.e. that the main objective of the program is to identify and disseminate best practices in terms of community investment facilitation services, and to help SME's become "investor ready".)
Recommendation 4:
That IC require CCIP projects to submit business plan updates annually and that they be used to monitor project performance.
From the beginning of the program, communities have been submitting annual reports of activities. Business plan updates are now being amalgamated to this practice, for which IC will be following up.
Recommendation 5:
Obstacles, strategies and lessons learned regarding securities legislation should be addressed in the "Winning Formula"
This information was included in the "Winning Formula" and can be found in the CCIP web site at http://strategis.ic.gc.ca/pics/cw/winning.pdf
Recommendation 6:
That "worst practice" information should also be included in the "Winning Formula".
Information on "worst" and "best practices" is an integral part of the "Winning Formula". It was decided to incorporate them in the text of the document rather than to create separate sections.
Recommendation 7&8:
Establish a formal process for self-identification of best practices and the creation of a synopsis detailing the size and key characteristics of the communities.
A consultant was retained by IC to work with the communities to identify best practices, as some of these could be missed. There will be a description of the best practices, together with the characteristics of the communities where it applies, in the CCIP website.
Recommendation 9:
Disseminating strategies to assist the transition of demonstration projects to self-sufficiency.
Suggestions were made at the Quebec semi-annual meeting. A special conference call with interested communities and a specialist in community financing took place in September of 2000 and at the next meeting of CCIP managers, in December 2000, strategies will be discussed to assist communities in becoming self-sufficient.
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