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October 31, 1997
(Executive Council)


Governments sign new $50.14 million Economic Development Agreement for Newfoundland and Labrador

Fred Mifflin, Minister of Veterans Affairs and Secretary of State for the Atlantic Canada Opportunities Agency (ACOA), and Premier Brian Tobin signed a new federal/provincial agreement today earmarking $50.14 million for economic development initiatives throughout the province. The agreement will be cost-shared by the federal and provincial governments on a 70/30 per cent basis respectively. Judy Foote, Minister of Industry, Trade and Technology, and Beaton Tulk, Minister of Development and Rural Renewal, also participated in the signing of the agreement.

The focus of the Canada/Newfoundland Comprehensive Economic Development Agreement is to direct financial resources toward high priority initiatives in order to capitalize on major opportunities within strategic growth sectors.

"This new agreement complements other economic development programs already in place and will be instrumental in our efforts to expand Newfoundland and Labrador's economic base," said Minister Mifflin. "It will strengthen our competitive capabilities allowing industry to seize opportunities in the global economy, which in turn will result in prosperity and long-term economic growth throughout the province."

"The Government of Canada and the Government of Newfoundland and Labrador have worked together to develop this agreement," Premier Tobin noted. "We recognize that with declining resources, the new generation of federal/provincial agreements have to be more strategic in focus, more harmonized in approach, and more flexible in design. I believe we have accomplished that with this agreement."

The new agreement is comprised of four programs. Approximately

$18.64 million will be made available for a Strategic Opportunities Program, the primary objective of which is to respond effectively to key initiatives that are outside the normal parameters of existing federal and provincial economic development programs. Building on the new economic zonal structure in the province which is being spearheaded by the 20 Regional Economic Development Boards, $15 million will be allocated for a Community Economic Development Program to enhance the delivery and impact of existing rural revitalization efforts. A $10 million Technology Development Program, with emphasis on innovation and technology, will capitalize on the high rates of growth in technology sectors of the national and world economies. A $6 million Investment, Export Trade and Marketing Program will focus on attracting international investment and developing the province's export potential. A further $500,000 has been allocated for administration of the agreement.

In designing these initiatives, both governments focussed on the primary objective of long-term sustainable economic development and employment growth that will benefit all areas of the province.

"To achieve our objective of long-term economic growth, this new agreement has been designed to accommodate proactive government-driven measures as well as industry-driven initiatives," said Minister Mifflin.

Premier Tobin noted: "This agreement is consistent with the overall economic development strategy of both the federal and provincial governments. It is our plan to proceed with implementation immediately."

The Comprehensive Economic Development Agreement will be implemented and managed jointly between the two governments, with the Atlantic Canada Opportunities Agency (ACOA) taking the lead for the federal government and provincially through the Department of Industry, Trade and Technology and the Department of Development and Rural Renewal.

Contact: Randy Devine, ACOA, (709) 772-2935 or Heidi Bonnell, Premier's Office, (709) 729-3564

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BACKGROUNDER

Canada/Newfoundland

Comprehensive Economic Development Program

RATIONALE

Globalization of trade and the pervasive effects of information technology are providing employment opportunities in the new economy. The prerequisites to this new economy include a flexible, educated labour force, a strong entrepreneurial business sector and a facilitative government sector.

Against this backdrop, the Newfoundland and Labrador economy is going through its own period of fundamental economic change. The challenge is to diversify the economic base. The resource industries - traditionally the province's economic backbone - can no longer by themselves stimulate the kind of economic growth needed to sustain a healthy economy. Other alternatives must be explored and opportunities seized.

The Government of Canada and the Government of Newfoundland and Labrador have agreed to work in partnership to advance their shared economic development objectives by establishing the Canada/Newfoundland Comprehensive Economic Development Agreement.

The $50.14 million five-year Comprehensive Economic Development Agreement will enable the federal and provincial governments to implement measures that target strategic sectors offering the best opportunity for growth. Enhancing the global competitiveness of industry, establishing linkages within the target sectors, and developing an export focus among key stakeholders will be fundamental to the strategy. Where appropriate, the private sector will be engaged to work in harmony with government to accomplish desired goals. Resource sector activities will be supported to the extent that initiatives are value-added, trade-related, technology enhancing, or aimed at developing human resources. The agreement will also be used to assist in the implementation of the strategic economic plans being developed by the 20 Regional Economic Development Boards.

OBJECTIVES

The objectives of the Canada/Newfoundland Comprehensive Economic Development Agreement are to:

- Contribute to the expansion and diversification of the economic base of the Province through the development of sustainable job growth and increased income opportunities;

- Promote public and private sector cooperation, which maximizes the return on public funds and leads to self-sustaining private sector opportunities;

- Provide increased opportunities for private sector investment, entrepreneurship and trade;

- Expand the competitive ability of the Province through investment in key sectors such as, but not limited to, diversified manufacturing, tourism, ocean industries, and advanced technology;

- Contribute to the development of the human resources of the Province; and

- Complement other federal and provincial programming.

PROGRAMS

The Canada/Newfoundland Comprehensive Economic Development Agreement is comprised of four programs as follows:

- Strategic Opportunities Program ($18.64 million)

- Community Economic Development Program ($15 million)

- Technology Development Program ($10 million)

- Investment, Export Trade and Marketing Program ($6 million)

In addition to the $49.64 million noted above, $500,000 has been allocated to provide core administrative support to the overall operation of the areement.

STRATEGIC OPPORTUNITIES PROGRAM ($18.64 MILLION)

The Strategic Opportunities Program will consist of three elements -- one to respond to business investment opportunities, one focussed on sector-specific initiatives with high opportunity for growth, and one focussed on human resource development and entrepreneurship.

- Business Investment: This program element will provide governments with the flexibility to provide direct assistance to business to respond to strategic economic development opportunities. Funding may be provided to one-of-a-kind projects where the probability of significant benefits, in terms of job creation and increased earned income, is clearly demonstrated. Funding will be used on a selective basis and be complementary to other business assistance programs currently in place.

- Sector Development: Provincial government departments, in concert with the private sector, industry/sector associations, the university and other not-for-profit organizations will be supported in the development of economic opportunities which will benefit the industry or sector as a whole.

- Human Resource Development and Entrepreneurship: Initiatives under this element of the agreement will be directed toward promoting and developing human resources as a means to economic development; fostering partnerships among governments, industry and educational institutions; and enhancing management skills within the private sector to enable new and expanding businesses to more effectively use human resources. Funding will also be used to promote the benefits of self-employment as a viable career option, provide the necessary supports to enable participants to initiate their own economic development activities, and enhance the entrepreneurial skills of existing businesses.

COMMUNITY ECONOMIC DEVELOPMENT PROGRAM ($15 MILLION)

In February 1995, the federal and provincial governments released the Report of the Task Force on Community Economic Development and endorsed a new approach to regional economic development based on the establishment of 20 economic zones in Newfoundland and Labrador. Within each zone, community-based Regional Economic Development Boards (REDBs) were established to lead the development and coordinate the implementation of strategic economic plans for their respective zones. The objective of the zone process is to create jobs through economic growth and diversification. For the first time in this province business, labour, regional development groups, municipalities, the education and training sector and other stakeholders are working together to establish shared priorities with respect to the economic development opportunities in their regions.

The Federal/Provincial Strategic Regional Diversification Agreement (SRDA), signed in 1994, provided initial funding for this initiative. The Community Economic Development Program of the agreement will enable the leadership role of REDBs to continue in the implementation phase of strategic economic plans, and fund initiatives where REDB priorities are shared by government.

- Regional Economic Development Boards: Funding will be provided for the administrative requirements of the 20 boards to ensure effective coordination of the implementation of strategic economic plans.

- Facilitation: Funding will be provided to address pan-provincial and multi-zonal opportunities related to the mandate of the Regional Economic Development Boards.

- Strategic Regional Initiatives: Funding will be provided for economic infrastructure in support of business investment opportunities, and for other initiatives that serve to diversify the economy and create new wealth and jobs in the private sector. The focus will be on activities in support of market-driven development opportunities which will lever private sector investment activities and benefit a zone, or the Province as a whole.

 

TECHNOLOGY DEVELOPMENT PROGRAM ($10 MILLION)

This program, with an emphasis on innovation and technology, will capitalize on the high rates of growth in knowledge-based sectors of the national and world economies by building on existing strengths within the local economy. The Technology Development Program includes four distinct elements that address a wide range of challenges facing the Province's economy as it seeks to compete both nationally and internationally.

- New Product Research and Development: The objective of this element is to assist with the high risk, early stage research and development of products and services. Preference will be given to new entrepreneurs with significant technological capabilities and market awareness.

- Technology Solutions: This element will assist in attaining technical solutions to specific problems. Provincial departments, in consultation with industry partners, could identify technology-based solutions to industry-wide problems. A competitive process may then be used to solicit alternative technology-based solutions.

- Technology Internship: Under this element, assistance will be provided to allow firms with little or no technical expertise to hire recent technical graduates for a one-year period. Firms would have to demonstrate a need for technical assistance and indicate the types of technical problems restricting their ability to grow.

- Research Infrastructure Fund: Flexibility will exist to support the enhancement of Memorial University's capability to undertake research in a limited number of technology areas. Emphasis will be on increasing research expertise in areas of high growth and emerging market opportunities.

 

INVESTMENT, EXPORT TRADE AND MARKETING PROGRAM ($6 MILLION)

With a small domestic market for most goods and services, investment attraction and export development are prerequisites to job creation and economic growth in Newfoundland and Labrador. The Investment, Export Trade and Marketing Program includes two elements.

- International Investment Attraction: This program element will enhance Newfoundland and Labrador's international investment promotional and prospecting efforts in strategic sectors and geographical areas. Target areas may include: international investment missions, investment partnering, and investment promotion.

- Trade/Export Development: This program element will address the trade development requirements of businesses in Newfoundland and Labrador by focusing resources on export opportunity identification and export readiness training. Initiatives designed to enhance domestic capabilities, competitiveness and increased exports of goods and services will be fostered. Where appropriate, activities can be carried out in partnership with industry associations in strategic sectors.

1997 10 31 3:20 p.m.

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