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January 15, 1999
(Executive Council)


Framework for Canada-Newfoundland Agreement on
Economic Development and Fisheries Adjustment Outlined

Fred J. Mifflin, Minister of Veterans Affairs and Secretary of State for the Atlantic Canada Opportunities Agency, and Brian Tobin, Premier of Newfoundland and Labrador, today announced the framework for the three-year Canada-Newfoundland Agreement on Economic Development and Fisheries Adjustment which will be cost-shared between the federal and provincial governments.

In June 1998, the federal government announced $100 million for an economic development initiative, $65 million of which was directed towards Newfoundland and Labrador through ACOA. The provincial government confirmed today its commitment to provide $16.25 million to the agreement bringing the total to $81.25 million. The agreement will include two main programs:

  • Regional Economic Development which will have two distinct elements, one focused on initiatives that reflect the plans and priorities of regional development groups, the other focused on initiatives led by the private sector;

  • Strategic Investment which will provide proactive support to a limited number of strategic capital infrastructure projects and those sectors recognized by both levels of government as having the best potential for long-term, stable economic growth in areas of the province adversely affected by the downturn in the groundfish industry.

"ACOA has the mandate and the infrastructure in place to deliver economic development initiatives in partnership with the province," said Minister Mifflin. "The agreement's flexibility will allow us to partner with those directly involved in regional economic development to advance initiatives that can contribute to sustainable economic growth in those areas affected by the downturn of the groundfish industry. Above all else the goal is to ensure economic initiatives are viable in the long-term."

Both levels of government will work in partnership with key stakeholders to deliver this component of the Fishery Restructuring and Adjustment Measures. "This economic development agreement will address the fundamental challenges faced by those regions of the province directly affected by the groundfish collapse," said Premier Tobin. "The Strategic Economic Plans presented by the Regional Economic Development Boards (REDBs), and the priority initiatives identified by each board will be taken into account during the implementation of the agreement announced here today."

Both levels of government stress that regional economic development is a long-term process. This new agreement will assist those already working in the area of regional economic development to move the province toward a self-sustaining diversified economy.

The three-year agreement shall be operational by April 1, 1999, following further stakeholder consultation and final Federal Treasury Board approval.

Economic development initiatives were identified by the federal government as part of the $730 million measures announced on June 19, 1998 to assist individuals and coastal communities adjust to opportunities outside the fishery, and to lay the foundation for an economically and environmentally viable, self-reliant fishery.

Media contact:

Randy Devine, ACOA, (709) 772-2935

Heidi Bonnell, Premier's Office, (709) 729-3960

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Canada/Newfoundland Agreement on Economic
Development and Fisheries Adjustment
Backgrounder

INTRODUCTION

The Canada/Newfoundland Agreement on Economic Development and Fisheries Adjustment reflects a long-term strategy for regional economic development in areas of the province affected by the downturn in the groundfish fishery. As such, it is a vital component of the Fisheries Restructuring and Adjustment Measures previously announced by Ministers Pettigrew, Anderson and Mifflin on June 19, 1998.

The agreement, totalling $81.25 million, is a three year undertaking, to be cost-shared by the Government of Canada and the Government of Newfoundland and Labrador. It will be jointly delivered by the Government of Newfoundland and Labrador and the Atlantic Canada Opportunities Agency, on behalf of the Government of Canada.

In recognition of the need for individuals to adjust to the reality of the groundfish fishery, this agreement will strengthen and diversify the economies of affected areas by assisting new industries and diversifying older ones. Ultimately, the goal is to help rural areas to adjust to the realities of the new fishery, and to make these communities less dependent on seasonal industries and income support programs.

Initiatives to be funded will be strategic in focus and reflect the priorities of both orders of government, taking into account the Strategic Economic Plans of the Regional Economic Development Boards (REDBs).

PROGRAM ONE - REGIONAL ECONOMIC DEVELOPMENT              $51.25 MILLION

The Regional Economic Development Program, through the collaboration of governments with REDBs and other regional and community stakeholders, will focus on economic diversification in regions adversely affected by the downturn in the groundfish fishery. The program will include two distinct elements - one focussed on initiatives that reflect the plans and priorities of regional development groups, the other focussed on initiatives led by the private sector.

Regional Initiatives Element

The primary focus of the Regional Initiatives Element will be on implementing initiatives that:

1) build upon the REDBs' strategic economic plans and priorities;

2) demonstrate strong potential for self-sustaining economic activity; and

3) improve the long-term economic climate of a region.

Governments will be proactive in working with eligible applicants prior to initiatives being submitted for consideration. The objective is to ensure only those initiatives which have significant economic impact will be considered.

Eligible applicants will be based in Newfoundland and Labrador and may include regional and community development groups, public/private partnerships, business/industry associations, educational institutions, and municipalities.

Eligible activities will include regional initiatives which take into account the strategic plans and priorities of the respective REDBs, or are linked to other economic activities geared towards improving the long-term investment climate of a fishery dependent region. Proposals which encourage entrepreneurship, human resource development, research related to strategic sector opportunities, or pan-zonal economic development initiatives will be considered. Eligible activities may also include infrastructure initiatives that are directly linked to a private investment opportunity. Core administrative funding of regional and community development groups will not be eligible.

Initiatives which will be pursued under this element, through a call for proposals, include funding by which towns could compete to be Model Tourism Communities, and the development of the information technology capacity in specific communities.

SME Assistance Element

This element recognizes that accelerated development of small-to-medium enterprises (SMEs) is essential to any long-term strategy for regional economic development in regions affected by the downturn in the groundfish fishery.

The objectives of the SME Assistance Element are:

1) to invest in the competitiveness and innovation of the private sector within rural areas;

2) to provide access to capital for rural-based entrepreneurs where traditional sources of funding are not available; and

3) to improve rural access to business and government information.

The approach will be complementary to existing federal, provincial, federal/provincial, and community programs. Every effort will be made to take advantage of commercial opportunities, especially within strategic sectors.

Where appropriate, private business opportunities that clearly demonstrate potential for both long-term job creation and regional economic diversity will be given prime consideration for assistance. To help realize these opportunities, business expansion and modernization activities which are incremental and improve upon the competitive advantage of a sector will be eligible. Eligible costs will also focus on incremental soft costs associated with marketing, feasibility studies, better business management practices, etc.

Funds will also be targeted at ensuring federal and provincial governments have the capability to provide business information, products and services through single window sites throughout the province.

PROGRAM TWO - STRATEGIC INVESTMENT                  $30 MILLION

The Strategic Investment Program will provide proactive support to a limited number of strategic capital initiatives and to those sectors recognized by both governments as having the best potential for long-term, stable economic growth in areas of the province adversely affected by the downturn in the groundfish fishery.

Strategic Infrastructure Element

The objective of the Strategic Infrastructure Element is to advance a limited number of key capital infrastructure initiatives which:

1) have arisen from the consultation process between REDBs, other community and regional development stakeholders and the various orders of government;

2) demonstrate significant economic impact; and

3) lead to the diversification of, and improvement to, the long-term economic climate of targeted regions.

Government departments will, in collaboration with regional and community based groups, initiate and implement activities undertaken within this element.

Resource Sector Development Element

The objective of the Resource Sector Development Element is to pursue initiatives recognized by both governments as strategic in focus and offering the best potential for economic growth in rural areas. Resource sector initiatives which lever significant additional public and private sector funding will be given priority.

A limited number of sectors will be targeted to ensure that available funding will have the maximum economic impact in areas affected by the downturn in the groundfish industry. The federal and provincial governments, in consultation with key stakeholders, including REDBs, will continue to work collaboratively to identify the sectors to be targeted to ensure that stated objectives are achieved. Emphasis will also be given to sectors of our economy that offer the greatest potential for growth and diversification.

1999 01 15                       4:10 p.m.


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