In June 2001, Treasury Board approved the transfer of the former Canada Jobs Fund (CJF) monies from what was then the Department of Human Resources Development (HRDC) to the regional development agencies (RDAs), the Department of Indian and Northern Affairs (INAC), and the Department of Industry (IC), specifically to the Federal Economic Development Initiative in Northern Ontario (FedNor).

In approving the transfer of funding, the Treasury Board noted that the transferred funds would be directed to projects that increase innovation activity and accelerated adaptation to, and participation in, the knowledge-based economy (KBE). This was to include support for projects and investments that help Northern communities and businesses as well as rural Southern communities and businesses seize opportunities in the new economy.

As part of the total $47.6 million transferred to IC/FedNor, the Treasury Board approved $8.4 million in contributions funding over four years to be targeted to Southern Ontario, using the Community Futures (CF) program as the delivery mechanism and $39.2 for Northern Ontario. The total funding amount was later reduced to $7.2 million in Southern Ontario and $27.81 million in Northern Ontario to accommodate annual transfers to the National Research Council’s (NRC) Industrial Research Assistance Program (IRAP).

While the initiative made use of existing programming in both Northern and Southern Ontario, there are key differences to note. In Northern Ontario, the FedNor program was already funding innovation and KBE projects. This extra funding provided an increased ability to fund more innovation / KBE projects. On the other hand, in Southern Ontario, innovation and KBE funding was new. As such, this was new “programming” for the CFDCs. Industry Canada / FedNor was therefore required to establish all processes associated with new initiatives (e.g., build awareness on the initiative among CFDCs, establish proposal guidelines and selection criteria, etc.). It therefore took more time to get the initiative established in Southern Ontario than it did in Northern Ontario.

This report presents the findings and conclusions of the evaluation study of the Northern and Southern Ontario components of the Innovation and KBE funding initiative and makes recommendations for improvement.

Table A. Conclusions and Recommendations
Conclusions	Recommendations
Relevance
Conclusion 1 While the needs of Northern Ontario and Southern Ontario are different, the Innovation and KBE initiative is relevant to the needs of the communities in both Northern and Southern Ontario. Additionally, the initiative is needed to help address these gaps; many of the projects would not have been able to proceed without IC / FedNor funding. Many others would have been delayed or would have taken more time. Given the nature of these projects, timing is critical.	Recommendation 1 The initiative should be continued as there is an ongoing need.
Conclusion 2 IC / FedNor is well suited to take a lead role in delivering this initiative in Ontario. The objectives and activities of the initiative are consistent with the objectives and priorities of IC / FedNor.	Recommendation 2 IC / FedNor should continue to take a lead role in delivering this initiative in Ontario.
Design and Delivery
Conclusion 3 The project assessment and approval process is very effective in Northern Ontario. While the process has improved in Southern Ontario, there is still evidence that selection criteria are not clear.	Recommendation 3 IC / FedNor should continue to improve the clarity of its selection criteria in Southern Ontario.
Conclusion 4 Program promotion has been adequate in terms of reaching direct targets in both Northern and Southern Ontario. However, in Southern Ontario, there is limited evidence of program promotion beyond the CFDCs because of a lack of tools available to CFDCs to promote the initiative to others.	Recommendation 4 IC / FedNor should continue its practice of news releases to announce its newly approved projects. This should also be done for Southern Ontario projects.
Conclusion 5 Program take-up has been appropriate in both Northern Ontario and Southern Ontario. However, it was slower than initially anticipated in Southern Ontario.	No recommendation is required.
Conclusion 6 FedNor is the appropriate service delivery model in Northern Ontario for this initiative. The CF program, via the network of CFDCs which are community-based not-for-profit organizations, is also the most appropriate model for Southern Ontario. However, there are some financial limitations faced by Southern Ontario CFDCs which restrict the types of projects they can undertake.	Recommendation 5 IC / FedNor should continue to use the network of CFDCs in Southern Ontario. However, the negative impacts of the imposed financial limitations should be carefully monitored and changed as required.
Conclusion 7 IC / FedNor staff understand their roles and responsibilities regarding this initiative and are fulfilling them.	No recommendation is required.
Conclusion 8 There are some key barriers and challenges to achieving Innovation / KBE goals and objectives. These include lack of money, the resistance to change (and thus increased need for awareness building and slow community participation), and community capacity building (includes human resource, skills, etc.). These barriers and challenges are directly related to the ongoing or longer term need for an initiative such as this one.	This conclusion provides more support to recommendation 1. However, no new recommendation is required.
Success
Conclusion 9 The initiative has resulted in increased awareness of innovation and KBE opportunities. This has occurred in the majority of projects reviewed and where it has not yet, is highly likely to occur. Since project incrementality is high, these results are highly attributable to the initiative.	See recommendation 1.
Conclusion 10 The initiative has resulted in enhanced business development services in the majority of projects and, if not, is likely to occur in the future. Again, since project incrementality is high, these results are highly attributable to the initiative.	See recommendation 1.
Conclusion 11 The initiative has improved access to capital through loans, loan guarantees and equity investments to businesses for knowledge-based products and services. This has been achieved through the Innovation / KBE investment fund which made additional funds available to CFDCs in the South for loans and loan guarantees as well as through the high level of other investments on projects (i.e. leveraging). Again, since project incrementality is high, these results are highly attributable to the initiative.	See recommendations 1 and 5.
Conclusion 12 The initiative has contributed to improved strategic planning with respect to the knowledge-based economy. Again, since project incrementality is high, these results are highly attributable to the initiative.	See recommendation 1.
Conclusion 13 The initiative has resulted in the development of new skills.	See recommendation 1.
Conclusion 14 The initiative has resulted, albeit not extensively, in improved business practices and increased entrepreneurship.	Recommendation 6 IC / FedNor should continue to monitor the success of this initiative to gauge the extent to which this will occur.
Conclusion 15 The initiative has resulted, although not extensively, in new knowledge-based startups. It is too early to assess the viability of these new startups.	See recommendation 6.
Conclusion 16 The initiative has resulted, again not yet extensively, in more competitive and expanded businesses through innovation and technology adoption. It is too early to truly assess how successful the initiative will be in this regard.	See recommendation 6.
Conclusion 17 The initiative is also contributing to strengthened community capacity to address sustainable KBE development opportunities. However, it is too early to truly assess sustainability.	See recommendation 6.
Conclusion 18 The initiative has not resulted in any significant unintended impacts.	No recommendation is required.
Monitoring and Accountability
Conclusion 19 The performance monitoring and accountability information available to IC / FedNor managers meets financial management requirements. However, there is little information available on the ongoing results of projects. There is also no consistent information available on completed project results throughout Ontario. The information that is available is difficult to “roll up”.	Recommendation 7 IC / FedNor must continue to improve its performance monitoring and accountability system to ensure that the right information is available in a timely fashion for management purposes and for program accountability.
Conclusion 20 The Innovation and KBE initiative does not overlap with other government programs but rather it complements others available.	No recommendation is required.
Alternatives, Cost-Effectiveness and Lessons Learned
Conclusion 21 The initiative was cost-effective in the way in which it was implemented as it used existing mechanisms (FedNor and CFDCs). In terms of delivery, it is also cost-effective as demonstrated through the high amounts of leveraged funds on projects. Additionally, as concluded previously, the initiative is successful (effective) in making a difference in the community.	See recommendations 1, 2 and 5.
Conclusion 22 The initiative could be improved through better financial arrangements, particularly in Southern Ontario.	See recommendation 5.

Final Report (PDF - 198KB - 74 pages)
Management Response (PDF - 119KB - 8 pages)

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