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Impact study of Francophone Economic Development Organizations in Western Canada

Table of Contents (January 2009)

List of Tables

Executive Summary

Study context, mandate and methodology

The purpose of the study is to determine the impact of the work being done by the four Francophone Economic Development Organizations (FEDOs), which receive funding from Western Economic Diversification Canada (WD). These organizations are:

in Manitoba, the Conseil de développement économique des municipalities bilingues du Manitoba (CDEM);
in Saskatchewan, the Conseil de la coopération de la Saskatchewan (CCS);
in Alberta, the Conseil de développement économique de l'Alberta (CDEA), formerly the Chambre économique de l'Alberta;
in British Columbia, the Société de développement économique de la Colombie-Britannique (SDECB).

These organizations have been receiving WD funding since 1998 and are part of the Western Canada Business Service Network (WCBSN).

The study analyzes impacts for a period of five (five) years, from April 1, 2003 to March 31, 2008. Each FEDO received $500,000 for 2003-2004 and 2004-2005, and has since received $545,000 annually to implement programming under three WD programs:

Community Planning;
Community Development;
Improvement of Business Productivity and Entrepreneurship.

A fourth program, Access to Capital, is implemented only in Manitoba, where the CDEM manages two investment funds.

Although WD can account for all results of activities funded by the WCBSN, those results are considered to emanate from the members of the WCBSN themselves and are not impartially validated by a third party. The study is therefore designed to provide an evaluation of the impact of the FEDOs' projects on communities and clients, an evaluation based on objective evidence.

In accordance with its mandate, the impact study presents the major findings of best practices in terms of impact, data collection and performance reporting, as well as recommended improvements in those regards.

The study is based on three lines of evidence:

Relevant documentation provided by the FEDOs and WD: subjective evidence not audited by a third party;
Fifteen focus groups in all four provinces, in which 105 FEDO community partners participated. These focus groups are objective evidence of the Community Planning and Community Development programs.
Telephone survey of 165 entrepreneurs who received significant service from the FEDOs over the last five years (preparation of a business plan, consulting services, etc.). The survey's margin of error is ±6.67%, and accurate 19 times out of 20. The survey is objective evidence of the Improvement of Business Productivity and Entrepreneurship program.

This report is composed of the following parts:

one section presenting an overview of the combined impacts of the four FEDOs for each program, major findings on best practices in terms of the impact of each program, the study's conclusions, and recommendations on data collection and performance reporting;
four sections presenting the individual results for each province.

Findings regarding the Community Planning and Community Development programs

The study conducted a detailed analysis of 124 different projects among the four FEDOs. Those 124 projects cover the range of services provided by the FEDOs in these two programs, including:

support services for project planning in rural and urban communities;
support services for securing funding for community projects;
support services for one-time events;
development of infrastructure and tourist attraction services;
development of a brand image to promote the French fact and the securing of bilingual signage;
support for initiatives related to Francophone immigration in the West.

The study did not analyze in detail the number of partnerships created or the number of persons trained, but rather the outcomes of those partnerships and that training. As objective evidence, the focus groups made it possible to validate the documentation provided by the FEDOs regarding projects in the communities.

The impact study concludes that the FEDOs play an important direct support role in the economic planning of Francophone communities and in the implementation of community projects. The FEDOs have greatly influenced the development of Francophone communities in Western Canada. One of the key findings of the focus groups is that partnership with the municipalities is one of the key determinants of successful project delivery.

The focus groups reveal an unexpected positive effect of the WD program. The presence of a local Francophone community is increasingly perceived as a major economic asset by Anglophone municipal authorities. They recognize and appreciate how important a Francophone community is to tourism. They also appreciate the linguistic and cultural bridges that Francophone communities in the West create for establishing economic ties with Quebec, France and other French-speaking countries. The FEDOs make it possible to discover the hidden potential in a mixed community, or a community in which Francophones are a minority. Anglophones greatly appreciate that the FEDOs work in English as well as in French, and that they support the economic development of the entire community and not just the Francophones. This tends to unite the population.

Satisfaction with the performance of the FEDOs is very high in 12 of the 15 focus groups, particularly in rural communities.

Findings regarding the Improvement of Business Productivity and Entrepreneurship program

The study analyzed mainly the impacts of the FEDOs in terms of the number of businesses created, expanded or improved and number of jobs created, maintained or improved, as well as investments leverage-generated through consulting services offered to businesses.

Under the line Number of businesses created, maintained or expanded, the FEDOs reported that they worked with 716 businesses between 2003 and 2008. The study examined the documentation provided by the FEDOs to identify 649 businesses or organizations that received significant service between 2003 and 2008; this clientele is distributed as follows:

Manitoba: 315 businesses;
Saskatchewan: 81 businesses or community organizations that received support for a project that creates jobs;
Alberta: 89 businesses or community organizations that received support for a project that creates jobs;
British Columbia: 162 businesses.

As objective evidence, the survey provides convincing outcomes regarding the impact of FEDOs on entrepreneurs.

Francophone businesses in the West receiving services from FEDOs present the following characteristics:

48% have sales of $65,000 or less;
42% have sales of $100,000 or more;
the businesses had an average of 3.99 employees in 2008;
the average payroll is $105,250;
just over two thirds of businesses are in rural communities, except in British Columbia, where the majority are in Vancouver;
95% of the clientele is composed of Francophone entrepreneurs.

In terms of impacts related to outcomes of the WD program, the survey reveals the following data:

entrepreneurs say that the services offered by FEDOs are very useful (overall average of 4.6 on a scale from 1 to 5, where 1 = no use at all, and 5 = very useful);
entrepreneurs are very satisfied with all of the services provided by FEDOs (average of 4.44 on a scale from 1 to 5);
just over half of the entrepreneurs would not have been able to launch or improve their business without the assistance of FEDOs;
80% of entrepreneurs say that the assistance received from FEDOs allowed them to create, maintain or improve their business (n = 132/165);
FEDO assistance helped increase sales for at least 58% of the entrepreneurs served (n = 95/165).
at least 35% of all the entrepreneurs who took part in the survey say that this increase was 11% or more;
there was a 121% increase in the number of jobs after applying for FEDO assistance: 611 jobs now versus 277 before the assistance;
entrepreneurs attribute 46% of new jobs created to assistance received from FEDOs, (n = 153 new jobs out of a total of 334 new jobs);
FEDO assistance helped increase the payroll of at least 46% of entrepreneurs served (n = 76/165);
the survey indicates that FEDOs helped increase the payroll by 11% or more for at least 27% of all respondents (45/165);
95% of the concluding comments made by entrepreneurs about the FEDOs are positive.

The best practices that emerge are the following:

offer of services in French;
offer of personalized services;
offer of a range of services: FEDOs represent a single service window for Francophone entrepreneurs;
offer of high-quality services;
the partnerships and work relations established with the Community Futures Development Corporations (CFDCs) and Women's Enterprise Initiative offices;
networking among Francophones.

Findings regarding the Access to Capital program - Manitoba only

The Franco-Manitoban loan fund was established under an agreement between WD, the Business Development Bank (BDC) and the CDEM. After an analysis of the file, the CDEM guarantees 20% of the BDC loan through the Franco-Manitoban loan fund. WD advanced $400,000 to set up this fund. The fund generated 19 loans between April 1, 2003 and March 31, 2008. It generated a total of $2,719,800 in loans during this period, and contributed to the creation of 167 new jobs.

The CDEM investment fund is $500,000. It granted nine loans between 2003 and 2008. These loans provided $2,635,217 in financial leverage and contributed to the creation of 33 jobs.

Conclusions and recommendations regarding data collection and performance reporting for the Community Planning and Community Development programs

All the FEDOs produce detailed documentation on their work in the Community Planning and Community Development programs. The quantitative dimension is relatively easy to capture. The FEDOs document the partners' names, the number of activities implemented, and the number of projects successfully completed or under way.

The quality and richness of the documentation on community planning activities vary from one FEDO to another. In all cases, the information is complete and helps easily determine the work done by the FEDOs in terms of community development.

The results obtained by the implementation of these two programs are necessarily qualitative in nature. The indicators used since 2006 provide a good picture of the FEDOs' outputs: number of partnerships established, increasing the capacity of community organizations, etc.

While useful, these indicators do not provide an overview of the quantitative outcomes confirmed by the focus groups themselves. The most important of those outcomes are the value of capital investments generated in projects that received major FEDO support and jobs created as a result of those investments.

Recommendation: that FEDOs and WD develop instruments to capture the value of incremental investments, and temporary jobs and permanent jobs generated by community capital projects that received substantial FEDO support.

Conclusions and recommendations regarding data collection and reporting for the Improvement of Business Productivity and Entrepreneurship program

The FEDOs report that they helped create, maintain or improve 716 businesses between 2003 and 2008. The impact study concludes that this figure is valid.

The FEDOs report that they helped create, maintain or improve 1,610 jobs between 2003 and 2008. The objective evidence of the impact study can confirm 93% of these jobs. Manitoba produced 58% of them, British Columbia 25%, Alberta 9% and Saskatchewan 8%.

The data reported by FEDOs concerning the number of clients served, the number of interactions with entrepreneur-clients, the number of requests for information, and the value of incremental investment thanks to assistance to businesses do not reflect the real picture. The impact study concludes that the totals reported by WD showing the cumulative effects of the four FEDOs in these categories are not reliable. This is not because of human error, but because of gaps in the system.

The study notes three types of difficulties with respect to FEDOs:

There is no common understanding of definitions among the four FEDOs.
The data collection tools used by the four FEDOs are not the same; sometimes the tools used by officers at a single FEDO are not the same.
The methodology used to monitor entrepreneurs to determine the value of incremental investments and number of jobs created, maintained or improved is not the same among the four FEDOs, and is not applied by them with the same rigour.

The study notes the following difficulties with respect to WD:

The WD officer responsible for a FEDO does not have the means to cross-check the data submitted by the FEDO; the officer's approval of the data, and the approval of the officer's manager, are an expression of confidence in the FEDO and not an authentication of those numbers.
The computer system used by WD is subject to electronic glitches.

Further to these analyses, the impact study makes the following recommendation.

Recommendation: That WD and the FEDOs develop and implement a completely new approach for assembling relevant data and reporting on outputs and outcomes achieved in the Improvement of Business Productivity and Entrepreneurship program.

This recommendation has five major effects:

The impact study concludes that only one data collection instrument should be used by all officers in the four FEDOs. The four FEDOs should use a common format, all the components of which are understood in the same way, to prepare their performance reports for WD. For a certain period of time, the senior managers at each FEDO should review the quantitative reports submitted by their counterparts, so as to be able to identify and correct disparities caused by differing interpretation of line items.
The FEDOs should ask each entrepreneur-client they serve to sign a form that permits a third party to subsequently communicate with that entrepreneur for evaluation purposes.
WD must identify methods of cross-checking data submitted by FEDOs, while respecting the anonymity of entrepreneurs.
The WD data bank, upgraded in 2006, contains a total of 36 line items. The question that arises is what value is added by collecting information for that many items? The analyses to be conducted by WD and the FEDOs as follow-up to this impact study will be able to identify the line items that are essential for measuring progress in connection with the program indicators.
The evaluation done in September 2004 made the following observation concerning the performance reports: "The accuracy of the quarterly reports is questionable as results appear inconsistent from one FEDO to another. FEDOs feel that the reports only partly reflect their success. There is a desire to work with WD to improve the reporting format." The impact study finds that, notwithstanding the progress made since, the FEDOs and WD will have to invest the necessary funds to improve the data collection tools and ensure that WD and FEDO staff are trained to use the template and prepare performance reports.