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August 16, 1999
(Executive Council)


Economic Development Component of the Fisheries Adjustment and Restructuring Initiative signed

George Baker, Minister of Veterans Affairs and Secretary of State for the Atlantic Canada Opportunities Agency (ACOA) and Premier Brian Tobin today signed the three-year $81.25 million Economic Development Component of the Fisheries Adjustment and Restructuring Initiative.

The federal/provincial Initiative, designed in response to the conclusion of the TAGS program, allows for long-term strategies for regional economic development in areas adversely affected by the downturn in the groundfish industry. Programs were developed after extensive consultations with key stakeholder groups including Regional Economic Development Boards, provincial and federal government departments, and community-based groups. Project priorities will be determined based on the strategic priorities of individual regions.

"The Government of Canada is committed to assisting communities hard hit by the fisheries moratorium and long-term, sustainable development is part of the solution," said Minister Baker. "We are confident that the consultation process yielded significant results with the key strategic priorities of specific regions being brought forward for consideration. Working with Regional Economic Development Boards and community based groups, both levels of government are now committed to acting quickly to bring projects to fruition."

"The Regional Economic Development Boards have played an instrumental role in bringing the agreement to a point where strategic priorities can be achieved," Premier Tobin said. "It is only with this spirit of consultation and cooperation that we have been able to bring this economic development agreement to full operational status."

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 province confirmed in January 1999 its commitment to provide $16.25 million to the initiative, bringing the total to $81.25 million. The agreement will be implemented by ACOA on behalf of the federal government, and by the Department of Development and Rural Renewal on behalf of the province.

Specific project announcements will be made over the course of the agreement.

Media contacts:

Randy Devine, ACOA, (709) 772-2935
Heidi Bonnell, Office of the Premier, (709) 729-3560

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ECONOMIC DEVELOPMENT COMPONENT OF THE FISHERIES ADJUSTMENT AND RESTRUCTURING INITIATIVE

INTRODUCTION

The Economic Development Component of the Fisheries Adjustment and Restructuring Initiative 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, focuses on economic diversification in regions adversely affected by the downturn in the groundfish fishery. The Program includes 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.

Regional Initiatives Element

The primary focus of the Regional Initiatives Element is 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.

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 08 16              12:10 p.m.


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