On a tour through Northern Ontario earlier this week, NDP Leader Thomas Mulcair was calling out the Harper Conservatives for slashing funding to FedNor, the federal government program that provides economic development help for northern Ontario. That prompted Tony Clement, the minister responsible for FedNor to fire back at Mulcair. Clement’s comments were echoed by Jay Aspin, the Conservative MP for the riding of North Bay-Timiskaming. Aspin’s salvo was the lead story today in the North Bay Nugget:
On Friday, The Sudbury Star reported that Mulcair said:
“Unfortunately, the Conservatives’ cuts, the planned cuts of tens of millions of dollars from the budget of FedNor, will have a devastating effect in the whole region, particularly in centres of excellence,” he said. “(The cuts will be) 20% this year and 25% next year — those are the actual cuts to FedNor.
If Tony Clement says anything otherwise, he’s not telling the truth. This is not a matter of ‘he said, she said’ — these are facts, they are printed on a piece of paper. Tony Clement should start telling the truth to people in Northern Ontario. If he’s got the guts to cut, let him have the guts to admit what he’s doing and stop playing word games.”
Clement promptly issued a statement on Friday, a statement which included the following:
“Mulcair decried magical funding numbers for FedNor he seemed to make up on the fly. …the numbers pure fiction. Its core funding remains virtually unchanged. If Mulcair understood financial documents – or cared to actually look at them – he would see a 0.43% decline in funding, not the 10%, 20%, 26% or any other number he is pulling out of his hat.”
So who’s right? Well, I care to actually look at financial documents and, if I don’t understand them, I ask what they mean. And after looking at the documents both use to support their claim/attack, one is right on the broad point — that would be Mulcair — and one is right on the narrow technical point about FedNor funding — that would be Clement.
Voters in Northern Ontario, if you ask me, would likely, though, be more interested in the answer Mulcair provides to the broader question: Is the federal government spending the same amount of money on “economic development” in northern Ontario or less? Answer: Less. Much less.
Now: Is FedNor’s funding this year bigger or smaller than last year? Clement is quite right that the two “core” FedNor programs are not taking any significant cuts. (Though, I believe Clement still understates the cuts at least one program is taking but more on that in a minute).
This year, there are three funding “envelopes” for economic development in northern Ontario none of which, oddly enough, is called FedNor (an acronym which stands for “Federal Economic Initiative for Northern Ontario”). The three are:
- Community Economic Development
- Northern Ontario Development Program
- Community Futures
We can look up spending plans for these three spending envelopes in a budget document called the 2013-2014 Industry Canada Report on Plans and Priorities. FedNor is not a standalone department like Industry Canada or even like some other regional economic development agencies like the Atlantic Canada Opportunites Agency (ACOA) or Western Economic Diversification. Instead, FedNor is a program area within Industry Canada. And while Quebec MP Christian Paradis is the minister responsible for Industry Canada (and all of its spending), there has always been a minister with specific responsibility for FedNor and Clement is that minister.
All departments produce Reports on Plans and Priorities as part of the annual budget cycle. These reports are intended to provide information to parliamentarians, journalists and the public about each department’s spending plans and how those spending plans support the department’s stated policy and program objectives. From here on out, I will refer to the 2013-2014 Industry Canada Report on Plans and Priorities as the FY14RPP. (FY stands for Fiscal Year and 14 stands for 2013-2014).
There is no line item in the FY14RPP that is clearly labelled “Money for FedNor” or something like that. In fact, the word “FedNor” appears just 8 times in the 2014 RPP. The phrase “Federal Economic Initiative for Northern Ontario” (which is what FedNor stands for) appears nowhere in the FY14RPP.
| Strategic Outcome | Program | Actual Spending | Forecast Spending | Planned Spending | Alignment to Government of Canada Outcomes | |||
|---|---|---|---|---|---|---|---|---|
| 2010–11 | 2011–12 | 2012–13 | 2013–14 | 2014–15 | 2015–16 | |||
| Canadian businesses and communities are competitive | Small Business Research, Advocacy and Services | 111.4 | 99.0 | 99.5 | 102.3 | 109.7 | 112.6 | |
| Industrial Competitiveness and Capacity | 92.3 | 39.6 | 45.4 | 36.1 | 32.2 | 32.2 | ||
| Community Economic Development | 145.6 | 153.2 | 81.1 | 65.3 | 60.3 | 62.2 | ||
| Sub-Total Strategic Outcome | 349.3 | 291.8 | 226.0 | 203.7 | 202.2 | 207.0 | ||
Program – Community Economic Development
Description
This program advances the economic development of Northern Ontario communities in the same manner that regional development agencies support similar activities in other regions of Canada. Its main goal is to strengthen the Northern Ontario economy by providing financial support, through contribution agreements, for economic and community development projects led by the private,not-for-profit and public sectors. This program also helps to increase public access to the Internet, provide schools with greater access to computers, and improve information technology skills and learning in community groups and communities across Canada.
| Financial Resources (Planned Spending – $ millions) |
Human Resources (Planned Full-Time Equivalents – FTEs) |
|||||
|---|---|---|---|---|---|---|
| Total Budgetary Expenditures (Main Estimates) 2013–14 |
2013–14 | 2014–15 | 2015–16 | 2013–14 | 2014–15 | 2015–16 |
| 65.3 | 65.3 | 60.3 | 62.2 | 104 | 104 | 104 |
| Expected Result | Performance Indicator | Target |
|---|---|---|
| Targeted businesses and organizations in northern Ontario create economic growth | Number of northern Ontario businesses and organizations created, expanded or maintained |
1,700
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That “Description” sure sounds an awful lot like what FedNor does. And yet, for whatever reason, even though this program “advances the economic development of Northern Ontario” and FedNor’s whole purpose is to do the same thing, this money is not FedNor’s money. Clement, as the minister responsible for FedNor is not responsible to Parliament for this cash. Industry Minister Christian Paradis is responsible.
UPDATE: After I posted this, Clement responded on Twitter:
.@davidakin double checked David: CED programs listed have a mix of N ON specific AND national programs. In fact the cuts are /2
— Tony Clement (@TonyclementCPC) April 7, 2013
.@davidakin spread across country & not concentrated in N ON. In the case of OL Roadmap, program now has restored funding. Mystery solved.
— Tony Clement (@TonyclementCPC) April 7, 2013
So what is Clement responsible for?
Well, Clement, in his attack on Mulcair, is hanging his hat on FedNor’s business plan and mandate, specifically section 2.3 which says (my emphasis below in bold):
FedNor supports regional economic development through the delivery of two core programs:
Those two core programs are:
- The Northern Ontario Development Program (NODP)
The NODP provides repayable and non-repayable contributions to not-for-profit organizations and small and medium-sized enterprises (SMEs) for projects focussed on one of three priorities: Community Economic Development; Business Growth and Competitiveness; and Innovation. - The Community Futures Program (CFP)
Through the CFP, operating assistance and investment capital is provided to 24 Community Futures Development Corporations (CFDCs) across Northern Ontario to help communities promote business development, employment opportunities and sustainable economic growth. CFDCs are incorporated, not-for-profit, community-based development organizations, governed by local volunteer boards. They help develop and diversify local economies by providing: repayable financing to local small businesses; business information; advisory services; and support for the development and implementation of strategic community plans. The CFP is a national program administered by FedNor in Northern Ontario and by RDAs in other regions of Canada.
Ok. So what’s the funding situation like for NODP and CFP?
We have to check two documents for that answer. We start first with the FY14RPP from industry Canada where there is a section on both the Community Futures Program and the Northern Ontario Development Program (NODP). Here’s the copy-and-paste from those sections:
Sub-Program – Community Futures
Description
The Community Futures (CF) Program is a national program delivered by FedNor in rural Northern Ontario and by the regional development agencies in the rest of Canada. The CF Program provides financial support to small and medium-sized enterprises through 24 Community Futures Development Corporations (CFDCs) located throughout rural Northern Ontario. The program’s objectives are to foster economic stability, growth and job creation; help create diversified and competitive local rural economies; and help build economically sustainable communities. CFDCs are incorporated,not-for-profit, community-based development organizations, each governed by a local volunteer board of directors. They offer a variety of products and services to support small business growth and community economic development, such as access to capital; strategic community planning andsocio-economic development; support for community-based projects and special initiatives; and business information, planning and support services. FedNor provides financial contributions to support the ongoing operations of individual CFDCs through either one- or three-year agreements.
| Financial Resources (Planned Spending – $ millions) |
Human Resources (Planned Full-Time Equivalents – FTEs) |
||||
|---|---|---|---|---|---|
| 2013–14 | 2014–15 | 2015–16 | 2013–14 | 2014–15 | 2015–16 |
| 8.9 | 8.9 | 8.9 | 5 | 5 | 5 |
Sub-Program – Northern Ontario Development
Description
The Northern Ontario Development Program (NODP) is administered by FedNor. The NODP’s objective is to promote economic development, economic diversification, job creation and sustainable,self-reliant communities in Northern Ontario. This is achieved by providing financial support, through transfer payments, to small and medium-sized enterprises and not-for-profit organizations, including municipalities, municipal organizations, community development organizations and research institutions, in three priority areas: community economic development; business growth and competitiveness; and innovation.
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The FY14RPP, though, does not tell us how much was spent in previous years on the NODP or the CFP. We have to go to another document for that information, a document called Main Estimates [pdf]. Main Estimates is another annual budget document which contains spending plans for every government department along with a description of the various votes that will be put before the House of Commons to authorize all this spending.
If you’ve downloaded the PDF for the FY14 Main Estimates, you’ll want to digitally scroll to page II-190 where you will find columns telling you how much the Ottawa actually spent on CFP and NODP in FY2012 and how much it believes it will spend on this programs in FY13 and FY14.
Bottom line? The best and most recent information for total spending through the NODP last year is $38.6 million. The best and most recent estimate of spending plans for the current year is $37.1 million. That’s a difference of $1.5 million or a decrease of 3.9 per cent. That is a bigger decrease than what Clement is claiming in his attack on Mulcair. Clement is claiming a 0.43 per cent decrease in NODP funding. But Clement would prefer you compared the best and most recent estimate of spending plans for the current year — the $37.1 million — against relatively stale year-old spending plans for the 2012-2013 year. Way back in the spring of 2012, the government figured it would spend $37.3 million on the NODP. So when you compare spending plans from 12 months ago to now, you get a difference of $200,000 or 0.43 per cent. But, those 12-month-old spending plans have since been eclipsed by not one, not two, but three updates on the government’s spending plans. (Ottawa insiders will know these as Supplementary Estimates A, B, and C). If you ask me, when you’ re comparing last year’s spending against this year’s spending, you want the most recent and most accurate estimates for both years. Clement wants you to use stale and out-of-date spending estimates against current-year estimates. And why not? It makes the government’s spending cut look miniscule. But, in fact, the government spent more through the year on NODP than it originally planned to spend. And while the final numbers on fiscal 2013 are not yet in — and could still be adjusted up or down — it only makes common sense to use those most recent spending numbers from FY 2013 when comparing them to future spending plans. And that’s why it’s accurate to say that NODP — a “core FedNor” program — will suffer a cut of $1.5 million or nearly 4 per cent.
The CFP, incidentally, was funded to the tune of $8.36 million in FY12, FY13, and will be for FY14. (Which, technically, means that program will be getting less money after you account for inflation but that’s for another essay …)
So Clement can, quite rightly, claim his “core funding” for FedNor has taken only a marginal hit.
But to the good folks of northern Ontario — many of whom are my friends and some of whom are my relatives — Clement’s “core funding” is not the issue. The issue is how much money is available from the federal government for economic development. (That’s the point Mulcair, ultimately, is making). In other words, Mulcair is seeing the forest; Clement is seeing the trees.
UPDATE Here, again, Clement has provided a corrective via Twitter to remind me (and those who’ve read this far) that the cuts to the “Community Economic Developmnet” envelope which Industry Canada administers did not affect programs in Northern Ontario. In other words, Clement is claim he is, in fact, seeing the forest:
So here’s that scorecard for 2013-2014 (All $ figures in millions of dollars)@davidakin I understand your confusion. Only 2 of the 5 programs are N Ontario specific, rest are sea to sea. The N ON programs almost uncut
— Tony Clement (@TonyclementCPC) April 7, 2013
| Community Economic Development (FedNor) | 65.3 |
| Community Futures | 8.9 |
| Northern Ontario Development Program | 46.5 |
| Grand Total for 2013-2014 | 120.7 |
How does that grand total compared to latest, best estimates of spending for 2012-2013?
Well, in FY2012, more than $195 million was spent on those three envelopes in northern Ontario. in FY13, the grand total was $128 million. So the FY13 cut was more than $67 million or 34.5 per cent — that’s Mulcair’s tens of millions of dollars line though, again, it is not technically from FedNor’s budget. But the FY14 grand total $120.7 million is a cut of about $17.3 million or 13.5 per cent. Still significant but, again, most of the cuts are outside of FedNor.