Report to/Rapport au :

Finance and Economic Development Committee

Comité des finances et du développement économique

and Council / et au Conseil

27 June 2011 / le 27 juin 2011

Submitted by/Soumis par : Nancy Schepers, Deputy City Manager/Directrice municipale adjointe, Infrastructure Services and Community Sustainability/Services d 'infrastructure et Viabilité des collectivités

Contact Person/Personne ressource : Johanne Levesque, Director/Directrice, Community Sustainability/Viabilité des collectivités

(613) 580-2424 x12257, Johanne.Levesque@ottawa.ca

City Wide/à l'échelle de la Ville

Ref N°: ACS2011-ICS-CSS-0007

SUBJECT:	Economic Development Strategy Implementation Plan
OBJET :	PLAN DE MISE EN œUVRE DE LA STRATÉGIE DE DÉVELOPPEMENT ÉCONOMIQUE

REPORT RECOMMENDATIONS

That Finance and Economic Development Committee recommend Council:

1. Approve the Economic Development Strategy Implementation Plan, including the related 2011 spending plan, as outlined in this report; and,

2. Direct staff to continue to refine investment option scenarios in consultation with internal and external stakeholders and present their recommendations as part of the annual draft budget process for the years 2012, 2013, and 2014.

RECOMMANDATIONS DU RAPPORT

Que le Comité des finances et du développement économique recommande au Conseil :

1.         D’approuver le plan de mise en œuvre de la stratégie de développement économique, y compris le plan de dépenses connexe pour 2011, tel que présenté dans le présent rapport; et

2. De donner au personnel la directive de continuer à peaufiner ses scénarios concernant les options d’investissement en consultation avec les intervenants internes et externes et de présenter ses recommandations dans le cadre du processus d’établissement du budget préliminaire de 2012, 2013 et 2014.

EXECUTIVE SUMMARY

Assumptions and Analysis:

Economic Development is about taking a long-term view to competing for investment dollars, enhancing our tax base, engaging our own resources and talents toward social and environmental innovation, and contributing to the quality of place where we live, work, and play.  With this objective in mind, in July 2010, Council approved a five-year economic development strategy (Partnerships for Prosperity) and directed staff to prepare an implementation plan by Q4 2010.

Since then, the Economic Development Branch has engaged its many stakeholders (including the Ottawa Centre for Regional Innovation, Ottawa-Gatineau Film and Television Development Corporation, Ottawa’s Countryside, Business Improvement Areas, Algonquin College, Carleton University, La Cité collégiale, Ottawa Tourism, Ottawa-Gatineau Hotel Association, Social Planning Council, Causeway Work Centre, Ottawa Community Loan Fund, Chambers of Commerce, University of Ottawa, Ottawa International Airport Authority, the Province of Ontario, Le Réseau de développement économique et d'employabilité, and others) to identify priorities and develop a concrete list of economic development activities for 2011 and beyond. These consultations were undertaken in tandem with a review and analysis of various best practices to provide a clear picture for future Economic Development investments.

The Economic Development Branch looked at several international studies and rankings assessing high-potential communities around the world including Global Cities Index 2010, PWC’s City of Opportunities Index, Deloitte Top 50 emerging technology index and others.  Our review uncovered some serious deficits.  Our research has shown that Ottawa, unlike other Canadian municipalities (including Toronto, Vancouver and Montreal), and North American cities of similar scale, is notably absent from many of these benchmarks.

In light of this research and identified priorities, the Economic Development Branch prepared a series of proposed initiatives to increase Ottawa’s prominence as an economically prosperous and sustainable City.  In order to evaluate the benefits of these initiatives for Ottawa, the Economic Development Branch adopted the Treasury Board’s business case template, allowing for a systematic analytical process of arriving at investment conclusions. Taken in their entirety, the business cases articulate the totality of the proposed economic development program, including the additional investments recommended throughout this term of Council.  Given the existing fiscal constraints faced by all municipalities, including the City of Ottawa, staff have also prepared two investment scenarios.  The first of which assumes a stable base funding of $5.5M for the years 2012 through 2014.  The second scenario maps out those program areas where Council could choose to invest additional resources.

In this report, every major item in the implementation plan is discussed with a summary of proposed initiatives. Individually, all of the projects and actions may seem quite distinct; however, each one is a critical component of a comprehensive economic development program for the City of Ottawa – a program that is recommended to be implemented as a whole over the next five years in order to respond to the identified challenges, leverage our existing strengths and deliver on the strategic priorities set forth in the Partnerships for Prosperity plan. 

The sequence of implementation actions is intended to facilitate an effective transition of the City to the new economic development program.  The $2 million investment approved in the 2011 Budget, along with the existing Economic Development budget, will be used to ‘target’ smart, high-impact, job creating initiatives.  Some of the initial work will entail preparation for further critical investments in 2012 and subsequent years. The main priorities for 2011 include focusing efforts on trade development and investment attraction activity through “Invest Ottawa’’ while continuing to deliver important sector development, BIA support, major event attraction, entrepreneurship programming, and creative industries support.

The following is a summarized list of key strategic actions for each of the initiatives and suites of economic development tools that form the proposed comprehensive program.

Invest Ottawa

Overview

The program will create “Invest Ottawa”, which is envisioned to have two focused objectives: 1) diversifying the local economy through a proactive and progressive approach to attracting investments; and 2) expanding and retaining businesses in the city. In order to achieve these objectives, Invest Ottawa will focus on key industry sectors including: green energy, aerospace and defence, photonics, life sciences, digital media, and film and television. 

Key Strategic Actions

· Create “Invest Ottawa” and build on the strengths and expertise of the “Global Marketing” activities at OCRI;

· Market Ottawa to select international geographic regions that are most relevant to our local economy; and,

· Identify high potential companies currently present in Ottawa in each of the aforementioned industry sectors and work with them to ensure their long-term viability in Ottawa.

Business Improvement Areas (BIAs) Support

Overview

The program will expand the City’s support for Business Improvement Areas (BIAs).

Key Strategic Actions

· Facilitate the creation of a BIA association called Greater Ottawa BIA (GO-BIA);

· Using the economic development budget, reinstate the formation and research matching grants program for the current term of Council; and,

· Add a new matching grant program for façade improvements, murals and the hiring of co-op students to take placements within individual BIAs.

Community Economic Development (CED)

Overview

The program provides an expanded approach to the City’s relationship with certain non-profit organizations (e.g., entrepreneurial support agencies, environmental advocacy organizations, and arts/culture organizations).  The program also recognizes the importance of social enterprises (e.g., a business that operates as part of a non-profit organization in order to increase their revenue stream) and community economic development (CED) to any comprehensive Economic Development efforts.

Key Strategic Actions

· Proactively encourage local approaches to economic development through partnerships with communities and non-profit organizations; and,

· Allocate funding for CED initiatives, such as supporting organizations that provide assistance to entrepreneurs from vulnerable populations and create local economic opportunities and improve quality of life.

Creative Industries

Overview

The program will increase support for the local film and television industry, as well as new media industries, to promote increased business activity within the City of Ottawa.

Key Strategic Actions

· Increase funding to the Ottawa-Gatineau Film and Television Corporation (OGFT) by $115K to ensure film and television business development activities take place alongside other key emerging industry sectors in Ottawa.

Entrepreneurship Sector

Overview

The program addresses the evidence that start-ups, rather than existing firms, are responsible for most job creation. Investments in the entrepreneurship sector respond to the reality that without new entrepreneurship tools and supports, Ottawa’s ability to attract and develop talent will diminish.

Key Strategic Actions

· Enhance the existing Entrepreneurship Centre and the existing Regional Innovation Centre, and have them co-locate with a new business incubation centre;

· Sponsor local capacity to develop, market, and manage industry or sector “keystones” to foster increased collaboration;

· Support Ottawa “challenge” competitions among students;

· Create a program of market research and analysis for entrepreneurs to help them identify business opportunities;

· Develop an online tool that would allow entrepreneurs to navigate the various programs and services available to them;

· Develop a procurement-supplier matching program to connect government agencies and departments on the one hand with local suppliers on the other;

· Create a campaign through media, presentations, events and competitions to encourage and promote entrepreneurship as a career option and a valuable employment asset;

· Co-ordinate program and service delivery to entrepreneurs from multiple sources to ensure accessibility to all entrepreneurs (including Francophone, vulnerable populations, social entrepreneurs, etc.).

Tourism Development and Major Events Office

Overview

The return on investment of supporting and hosting major events is significant, and there can be side-benefits ranging from enhanced national and international tourist market visibility to legacy sports and cultural infrastructure (additional, expanded or improved sports/cultural facilities for residents).  As such, the program will create and fund a new office whose role would be to attract and support large-scale cultural and sports events in the city. 

Key Strategic Actions

· Co-invest in a major event attraction office to be located within Ottawa Tourism; and,

· Create an annual fund dedicated for bids and major events attraction support.

Communication Tools

Overview

The program involves the development and implementation of new communications tools that will better position Ottawa in the knowledge economy. These tools seek to address Ottawa’s weak performance in economic development rankings and to market the business and tourism opportunities of Ottawa to both our own residents and external investors and visitors.

Key Strategic Actions

The Economic Development Branch will create a communications toolkit that will include:

· Enhancements to ‘Discover Ottawa’- smartphone application (launched in Mar-2011);

· A business information hotline;

· A sophisticated online business mapping tool aimed at site selectors.

Performance Measurement Tools

Overview

The program will involve the development and implementation of an up-to-date technology tool (an information scorecard) that will allow the City to continually gauge Ottawa’s economic indicators and compare them with those in other cities.

Key Strategic Actions

Currently, there is no performance measurement framework for economic development investments and activities. The proposed performance measurement toolkit would utilize a whole suite of methods and techniques to market the business and tourism opportunities of Ottawa to our own residents as well as foreign direct investors. This performance measurement toolkit will include:

· A web-based and comprehensive economic development scorecard; and,

· An annual independent business survey.

Economic Development Service Delivery Realignment

Overview

In order to be successful, the City’s proposed economic development program requires the collaboration of multiple stakeholders, each contributing towards achieving the vision that was outlined in the Partnerships for Prosperity plan. After examining best practices in cities around the world, staff have concluded that a hybrid service delivery model for economic development – one that keeps some functions at City Hall, but that also relies on external groups that can react to changing circumstances at the pace of business – will deliver the best results.

Key Strategic Actions

· Create a new “The Ottawa Partnership” (TOP) made up of key stakeholders, including the private sector, and co-chaired by the Mayor;

· Form an inter-departmental team led by the City Manager to create formal and regular opportunities for economic development discussion; and,

· Move from generalist roles within the Economic Development Branch to ones that specialize in the focus areas reflected in this implementation plan.

Proposed 2011 Economic Development Spending Plan

The following table shows the 2011 proposed allocations and investment required to implement the economic development program:

$000	2011
Invest Ottawa (including the Ottawa-Gatineau Film & Television Corporation) *	$  1,550
Entrepreneurship (Entrepreneurship Centre, Incubator, Regional Innovation Centre)	$  1,400
Major Events	$     505
BIAs	$     110
Grants and Contributions**	$     873
Communication / Performance Measurement	$     227
Economic Development Branch (Operating Budget)***	$     873
Total	$  5,538

* 2011 funding for Invest Ottawa will be provided to Global Marketing at OCRI under a Memorandum of Understanding (including the Ottawa-Gatineau Film & Television Corporation as part of Invest Ottawa)

**The Grants & Contributions budget will be assigned exclusively to Community Economic Development projects beginning in 2012.

*** The Economic Development Branch Operating Budget was increased by $200K in 2011 to be able to respond to unforeseen economic development opportunities such as unanticipated events and promotional tours.

These allocations include the $2M increase to the Economic Development Branch’s 2011 operating budget, as approved by Council.

These proposed investments will begin to remedy the deficiencies identified in Ottawa’s economic development arsenal. The report further shows the additional investments that are recommended over the next few years, and two investment scenarios have been developed.  Development work in 2011 will refine the timing and additional investments allocation required in future years.  Further investment decisions would then be made as part of the annual budget cycle for the years 2012, 2013 and 2014.

In today’s business environment, where both the knowledge-based work force and investment capital are highly fluid, the economic development challenge is to retain and relentlessly grow this knowledge resource.  By its nature, economic development is a long-term program of initiatives that must be considered both an investment in our city and a vote of confidence in our economic stakeholders (who create the bulk of wealth and jobs in our community). Moreover, the contribution of economic development to the resiliency of the city and its quality of life cannot be overstated, as economic prosperity is an important pillar of sustainability.

The types of investment proposed in this plan recognize the importance of economic development and are ultimately aimed at helping Ottawa earn its way toward the top of the list of the world’s leading economic regions.

Financial Implications:

Funding for the Economic Development 2011 Spending Plan is available within existing resources, as approved through the 2011 Operating Budget.

Funding requirements for the Additional Investment Opportunities outlined within the report, Scenario 2: Capitalizing on Additional Investment Opportunities, 2012 and beyond, will be subject to the Term of Council Priorities process, and approval through future-year budget processes.

Public Consultation/Input:

Since the approval of ‘Partnerships for Prosperity’ report by Council in July 2010, staff members from the Economic Development Branch have engaged the many stakeholders in both one-on-one consultations, as well as group meetings. Staff also utilized all formal forums organized by external stakeholders to gain feedback on the economic development implementation possibilities. Some of the consultation activities that were undertaken are listed below:

Organization	Topic
Algonquin College Dean Faculty of Business Dean Faculty of Media and Design Mark Hoddenbagh Director Applied Research & Innovation	Incubation Centre, Digital Media Lab, entrepreneurship sector collaborations, student internship programs
The Ottawa Network General Membership base at an economic development focused speaking engagement	Incubation Centre, entrepreneurship sector collaborations
BIA Executive Director Forum All 17 BIAs	BIA Best Practices and future programming/funding opportunities
Private Sector Firms Research In Motion Sanmina IBM Wesley Clover Nordion InMotion Knight Enterprises	Role of economic development in assisting the medium/large size firms in Ottawa
City of Toronto Various economic development staff	Learn best practices around the delivery of economic development services
Kingston Economic Development Corporation President & CEO	Learn best practices around investment attraction, entrepreneurship sector development
Tourism Leadership Council Ottawa Senators NCC Airport Authority Ottawa Tourism Ottawa Gatineau Hotel Association Ottawa Chamber of Commerce Ottawa Convention Centre	Tourism sector development projects including major events attraction
Business Advisory Committee	General economic development discussion and feedback on direction of the economic development implementation plan
Ministry of Economic Development & Trade	Entrepreneurship Centre
Ontario Media Development Corporation Film Commissioner	Film and television sector development efforts
Calgary Economic Development Film Commissioner	Film and television sector development efforts
RDÉE Ontario	Partnership opportunities on projects focused on the francophone community

RÉSUMÉ

Hypothèses et analyse

Le développement économique consiste à adopter une vue à long terme dans le but d’obtenir des crédits d’investissement, d’améliorer l’assiette fiscale, de mettre à profit ses ressources et ses talents en faveur de l’innovation sociale et environnementale et de contribuer à la qualité du lieu où nous vivons, travaillons et amusons. Dans cette optique, le Conseil a approuvé en juillet 2010 une stratégie de développement économique quinquennale (Partenariats pour la prospérité) et a mandaté le personnel de préparer un plan de mise en œuvre avant le quatrième trimestre de 2010.

Depuis cette date, la Direction du développement économique a fait appel à ses nombreux intervenants (y compris le Centre de recherche et d’innovation d’Ottawa, la Société de développement du film et de la télévision d’Ottawa-Gatineau (OGFT), l’Ottawa’s Countryside, les Zones d’amélioration commerciale, le Collège Algonquin, l’Université Carleton, La Cité collégiale, Tourisme Ottawa, l’Association des hôtels d’Ottawa-Gatineau, le Conseil de planification sociale, le Causeway Work Centre, la Société de financement communautaire d’Ottawa, la Chambre de commerce, l’Université d’Ottawa, l’Administration de l’aéroport international d’Ottawa, la province de l’Ontario, Le Réseau de développement économique et d'employabilité et d’autres) afin d’établir les priorités et de dresser une liste concrète des activités de développement économique pour 2011 et les années qui suivront. Ces consultations ont été entreprises en tandem avec un examen et une analyse des meilleures pratiques en vue d’obtenir une idée claire des investissements du développement économique futur.

La Direction du développement économique a procédé à l’examen de plusieurs études et classements internationaux qui évaluaient des collectivités à potentiel élevé dans le monde, y compris l’indice Global Cities de 2010, l’indice « City Of Opportunities » de PricewaterhouseCoopers, l’indice des 50 meilleures entreprises du domaine des nouvelles technologies de Deloitte et d’autres. L’étude a démontré des lacunes  importantes. Elle indique qu’Ottawa, contrairement à d’autres municipalités canadiennes (dont Toronto, Vancouver et Montréal) et villes nord-américaines de taille similaire, est remarquablement absente d’un bon nombre de ces points de comparaison.

À la lumière de cette étude et des priorités établies, la Direction du développement économique a préparé une série d’initiatives visant à augmenter la prédominance d’Ottawa à titre d’une ville prospère sur le plan économique et viable. Afin d’évaluer les bienfaits de ces initiatives pour la Ville d’Ottawa, la Direction du développement économique a adopté le modèle d’analyse de rentabilisation du Conseil du Trésor, ce qui lui a permis d’en arriver à un processus analytique systématique en vue de tirer des conclusions  sur le plan des investissements. Dans leur ensemble, ces analyses de rentabilisation représentant l’ensemble du programme de développement économique envisagé, en plus des autres investissements recommandés au cours du mandat du Conseil. Compte tenu des contraintes financières vécues par toutes les municipalités, y compris la Ville d’Ottawa, le personnel a préparé deux scénarios d’investissement. Le premier présume un financement stable des activités de base de l’ordre de 5,5 millions de dollars de 2012 à 2014. Le deuxième fixe les domaines de programme où le Conseil pourrait choisir d’investir des ressources supplémentaires.

Dans ce rapport, tous les points principaux du plan de mise en œuvre sont abordés avec un résumé des initiatives projetées. Pris individuellement, les projets et les mesures peuvent sembler distincts; toutefois, chacun constitue une composante cruciale d’un programme complet de développement économique de la Ville d’Ottawa, que l’on recommande de mettre en œuvre dans son ensemble au cours des cinq prochaines années en vue de relever les défis établis, de miser sur nos forces et de donner suite aux priorités stratégiques énoncées dans le plan de Partenariats pour prospérité. 

La série de mesures de mise en œuvre cherche à faciliter la transition de la Ville vers le nouveau programme de développement économique. L’investissement de 2 millions de dollars approuvé dans le budget de 2011 accompagné du budget existant de développement économique servira à cibler des initiatives intelligentes de création d’emplois à fortes retombées. Une partie du travail initial nécessitera la préparation en cas d’investissements supplémentaires cruciaux en 2012 et au cours des années qui suivront. Les principales priorités en 2011 viseront à canaliser les efforts vers le développement commercial et l’attraction d’investissements au moyen de l’initiative « Investissement Ottawa » tout en poursuivant un développement sectoriel important, un soutien aux zones d’amélioration commerciale, aux attractions de grands événements, un programme en entreprenariat et un soutien aux industries créatives.

Les pages qui suivent présentent un résumé des mesures stratégiques clés de chacune des initiatives ainsi qu’une série d’outils de développement économique qui forment le programme complet envisagé.

Investissement Ottawa

Aperçu

Le programme créera « Investissement Ottawa » qui comporte deux objectifs ciblés : 1) diversification de l’économie locale en adoptant une approche anticipatoire et graduelle pour attirer des investissements et 2) l’expansion des entreprises situées dans la ville ainsi que leur maintien en place. Pour atteindre ces objectifs, Investissement Ottawa se penchera sur des secteurs industriels clés, dont l’énergie verte, l’aérospatial et la défense, la photonique, les sciences de la vie, les médias numériques, le cinéma et la télévision. 

Mesures stratégiques clés

· Créer « Investissement Ottawa » et miser sur les forces et l’expertise des activités de commercialisation mondiale au Centre de recherche et d’innovation d’Ottawa;

· Commercialiser Ottawa auprès de certaines régions géographiques internationales qui sont les plus pertinentes pour l’économie locale;

· Désigner les entreprises à haut potentiel qui sont déjà présentes à Ottawa dans chacun des secteurs industriels susmentionnés et collaborer avec elles pour assurer leur viabilité à long terme à Ottawa.

Soutien aux zones d’amélioration commerciale

Aperçu

Le programme élargira le soutien de la Ville aux zones d’amélioration commerciale.

Mesures stratégiques clés

· Faciliter la création d’une association des zones d’amélioration commerciale appelée Zone d’amélioration commerciale du Grand Ottawa (GO-BIA);

· À l’aide du budget de développement économique, rétablir le programme de subventions de contrepartie destiné à la formation et à la recherche pour le mandat actuel du Conseil;

· Ajouter un nouveau programme de subventions de contrepartie pour les améliorations de façade, les murales et l’embauche des étudiants de programmes d’enseignement coopératifs pour qu’ils travaillent dans  chacune des zones d’amélioration commerciale.

Développement économique communautaire (DEC)

Aperçu

Le programme prévoit une approche élargie concernant la relation de la Ville avec certains organismes sans but lucratif (p. ex. organismes de soutien entrepreneurial, organismes de défense environnementale, organismes artistiques et culturels). Le programme reconnaît aussi l’importance des entreprises sociales (entreprise créée par un organisme à but non lucratif afin d’augmenter son revenu) et du développement économique communautaire (DEC) dans toute initiative de développement économique se voulant exhaustive.

Mesures stratégiques clés

· Encourager de façon proactive les approches locales de développement économique grâce à des partenariats conclus avec des communautés et des organismes à but non lucratif;

· Allouer des fonds pour les initiatives de DEC, comme celles visant à soutenir des organismes qui offrent de l’aide aux entrepreneurs venant de groupes vulnérables, à créer des possibilités économiques dans la région et à améliorer la qualité de vie.

Industries créatives

Aperçu

Le programme accroîtra le soutien à l’industrie cinématographique et télévisuelle locale ainsi qu’aux industries des nouveaux médias afin de favoriser une plus grande activité commerciale dans la Ville d’Ottawa.

Mesures stratégiques clés

· Augmenter le financement à la Société cinématographique et télévisuelle d’Ottawa-Gatineau de 115 000 $ afin d’assurer que des activités de développement des entreprises cinématographiques et télévisuelles aient lieu parallèlement à d’autres secteurs industriels émergents à Ottawa.

Secteur de l’entreprenariat

Aperçu

Le programme traite du fait que ce sont les nouvelles entreprises et non celles qui sont déjà installées qui créent la plupart des emplois. Les investissements dans le secteur de l’entreprenariat correspondent à la réalité selon laquelle qu’en l’absence de nouveaux outils et soutiens en entreprenariat, la capacité de la Ville d’Ottawa d’attirer et de perfectionner les talents diminuera.

Mesures stratégiques clés

· Améliorer le Centre d’entreprenariat et le Centre d’innovation régional actuels et les regrouper sous un même toit avec un nouveau centre d’incubation des affaires;

· Commanditer la capacité locale pour qu’elle crée, commercialise et gère des piliers industriels ou sectoriels  en vue de favoriser une collaboration accrue;

· Appuyer les compétitions Défis d’Ottawa chez les étudiants;

· Créer un programme d’études et d’analyse des marchés pour les entrepreneurs afin de leur permettre de cerner des possibilités d’affaires;

· Créer un outil en ligne qui permettra aux entrepreneurs de naviguer vers divers programmes et services qui leur sont offerts;

· Créer un programme d’appariement acheteur-fournisseur pour mettre les organismes et les ministères gouvernementaux en contact avec les fournisseurs locaux;

· Créer une campagne par l’intermédiaire des médias, des présentations, des événements et des compétitions afin d’encourager et de promouvoir l’entreprenariat à titre d’option de carrière et atout d’emploi précieux;

· Coordonner la prestation de programmes et de services à l’intention des entrepreneurs provenant de sources multiples afin d’assurer l’accessibilité à tous les entrepreneurs (y compris les francophones, les populations vulnérables, les entrepreneurs sociaux, etc.).

Développement touristique et bureau des grands événements

Aperçu

Le rendement du capital investi dans le soutien et l’organisation de grands événements est important et il peut y avoir des avantages secondaires allant d’une plus grande visibilité du marché touristique national et international aux infrastructures sportives et culturelles patrimoniales (des installations sportives ou culturelles supplémentaires, élargies ou améliorées pour les résidents). À ce titre, le programme créera et financera un nouveau bureau dont le rôle sera d’attirer et de soutenir des événements culturels et sportifs à grande échelle dans la ville. 

Mesures stratégiques clés

· Coinvestir dans un bureau d’attraction de grands événements qui se situerait dans le bureau de Tourisme Ottawa;

· Créer un fonds annuel consacrés aux soumissions et au soutien visant l’attraction de grands événements.

Outils de communication

Aperçu

Le programme comporte l’élaboration et la mise en œuvre de nouveaux outils de communication qui positionneront mieux la Ville d’Ottawa dans l’économie du savoir. Ces outils cherchent à corriger la faible performance de la ville dans les classements de développement économique et à mettre en valeur les possibilités d’affaires et de tourisme auprès des résidents d’Ottawa, des investisseurs externes et des visiteurs.

Mesures stratégiques clés

La Direction du développement économique créera communications une trousse à outils qui comprendra :

· des améliorations à l’application de téléphone intelligent « Découvrir Ottawa » (lancée en mars 2011);

· une ligne téléphonique d’information commerciale;

· un outil de cartographie commerciale sophistiqué en ligne visant les sélecteurs de sites.

Outils de mesure du rendement

Aperçu

Le programme comportera l’élaboration et la mise en œuvre d’un outil technologique à jour (un tableau de bord d’information) qui permettra à la Ville de jauger continuellement les indicateurs économiques de la Ville et de les comparer à ceux dans d’autres villes.

Mesures stratégiques clés

À l’heure actuelle, il n’y a aucun cadre de mesure du rendement pour les investissements et les activités en matière de développement économique. La trousse à outils proposée de mesure du rendement renfermerait toute une série de méthodes et de techniques pour mettre en valeur les possibilités d’affaires et de tourisme auprès des résidents d’Ottawa et des investisseurs directs étrangers. Cette trousse à outils de la mesure du rendement comprendrait:

· Un tableau de bord de développement économique complet et basé sur le Web;

· Un sondage annuel indépendant des entreprises.

Remaniement de la prestation de services en matière de développement économique

Aperçu

Pour réussir, le programme proposé de développement économique de la Ville exige la collaboration d’une multitude d’intervenants, chacune contribuant à la réalisation de la vision décrite dans le plan Partenariats pour la prospérité. Après avoir examine les meilleures pratiques à la grandeur du monde, le personnel a conclu qu’un modèle hybride de prestation de services en matière de développement économique – l’un qui conserve certaines fonctions à l’hôtel de ville, mais qui dépend également des groupes externes qui peuvent réagir face à des circonstances changeantes au rythme des affaires – donnera les meilleurs résultats.

Mesures stratégiques clés

· Créer un nouveau « Partenariat d’Ottawa » composé des principaux intervenants, y compris le secteur privé, qui serait coprésidé par le maire;

· Former une équipe interservices dirigée par le directeur municipal afin de créer des possibilités officielles et habituelles aux fins de discussion sur le développement économique; et,

· Changer les rôles actuellement généralistes au sein de la Direction du développement économique pour des rôles spécialisés dans les domaines de priorité pris en compte dans ce plan de mise en œuvre.

Plan proposé de dépenses du développement économique 2011

Le tableau suivant présente les allocations proposées et les investissements requis en 2011 pour mettre en œuvre le programme de développement économique.

$000	2011
Investissement Ottawa (y compris l’Office régional du film d’Ottawa-Gatineau)*	1 550 $
Entreprenariat (Centre d’entreprenariat, Incubateur, Centre d’innovation régionale)	1 400 $
Grands événements	505 $
Zones d’amélioration commerciale	110 $
Subventions et contributions**	873 $
Communication / Mesure du rendement	227  $
Direction du développement économique (budget d’exploitation)***	873 $
Total	5 538 $

*     Le financement de 2011 pour Investissement Ottawa sera accordé à Global Marketing au Centre de recherche et d’innovation d’Ottawa dans le cadre d’un protocole d’entente (y compris l’Office régional du film d’Ottawa-Gatineau).

**   Les fonds pour les subventions et contributions seront attribués uniquement aux projets de développement économique communautaire à partir de 2012.

*** Le budget de fonctionnement de la Direction du développement économique s’est accru de 200 000 $ en 2011 pour permettre de s’adapter aux possibilités de développement économique imprévues, comme des événements inattendus et des tournées de promotion.

Ces allocations comportent une augmentation de 2 millions de dollars au budget d’exploitation de la Direction du développement économiques 2011, comme elle a été approuvée par le Conseil.

Ces investissements proposés commenceront à combler les lacunes établies dans l’arsenal de développement économique d’Ottawa. Le rapport fait état en outre des investissements supplémentaires qui sont recommandés au cours des prochaines années et deux scénarios concernant les investissements ont été mis au point.  Le travail de développement en 2011 mettra au point le facteur temps et l’allocation des investissements supplémentaires qui sera requise au cours des prochaines années. D’autres décisions d’investissement seront ensuite prises dans le cadre du cycle du budget annuel pour les années 2012, 2013 et 2014.

Dans le contexte des affaires d’aujourd’hui où la main-d’œuvre à base de savoir et le capital d’investissement sont hautement fluides, le défi du développement économique est de maintenir et de faire fructifier sans cesse cette ressource du savoir. Par sa nature, le développement économique est un programme d’initiatives à long terme qui doit être considéré comme un investissement dans notre Ville et un vote de confiance à l’égard de nos intervenants économiques (qui créent l’essentiel de la richesse et des emplois dans notre collectivité). En outre, la contribution du développement économique à la résilience de la ville et à sa qualité de vie ne peut pas être surestimée, car la prospérité économique est un pilier important de la durabilité.

Les types d’investissements proposés dans le présent plan reconnaissent l’importance du développement économique et visent en dernier ressort à aider la Ville d’Ottawa à frayer son chemin au faîte de la liste des régions économiques prépondérantes dans le monde.

Répercussions financières

Le financement du plan de dépenses du développement économique de 2011 est disponible dans le cadre des ressources existantes, comme il a été approuvé par le budget d’exploitation de 2011.

Les besoins en financement relatifs aux options d’investissement supplémentaires, présentés dans le rapport dans la section du deuxième scénario concernant les options d’investissement pour 2012 et les années subséquentes, seront assujettis au processus des priorités du mandat du Conseil et à l’approbation dans le cadre des processus budgétaires des prochaines années.

Consultation publique et Input

Depuis l’approbation du rapport de « Partenariats pour prospérité » par le Conseil en juillet 2010, les membres du personnel de la Direction du développement économique ont sollicité la participation de nombreux intervenants à des consultations sur une base individuelle ainsi qu’à des réunions de groupe. Le personnel a aussi utilisé tous les forums officiels organisés par les intervenants externes afin d’acquérir une rétroaction sur les possibilités de mise en œuvre du développement économique. Certaines des activités de consultation qui ont été entreprises sont énumérées ci-dessous.

Organisation	Sujet
Collège Algonquin Doyen de la faculté du commerce Doyen de la faculté des médias et de la conception Mark Hoddenbagh Directeur de la recherche appliquée et de l’innovation	Centre d’incubation, laboratoire de médias numériques, collaborations du secteur d’entreprenariat, programmes de stages étudiants
Le réseau d’Ottawa Base générale des membres lors d’une activité d’allocution axée sur le développement économique	Centre d’incubation, collaborations du secteur d’entreprenariat
Forum du directeur exécutif des zones d’amélioration commerciale Toutes les dix-sept zones d’amélioration commerciale	Les meilleures pratiques des zones d’amélioration commerciale et possibilités de financement futures des programmes
Entreprises du secteur privé Research In Motion Sanmina IBM Wesley Clover Nordion InMotion Knight Enterprises	Rôle du développement économique dans l’aide aux grandes et moyennes entreprises à Ottawa
Ville de Toronto Divers membres du personnel du développement économique	Apprentissage des meilleures pratiques axées sur la prestation de services du développement économique
Kingston Economic Development Corporation President & CEO	Apprentissage des meilleures pratiques axées sur l’attraction des investissements, le développement du secteur de l’entreprenariat
Conseil de leadership en tourisme Sénateurs d’Ottawa CCN Autorités aéroportuaires Tourisme Ottawa Association des hôtels d’Ottawa- Gatineau Chambre de commerce d’Ottawa	Projets de développement du secteur touristique, y compris l’attraction des grands événements
Comité consultatif des affaires	Discussion générale sur le développement économique et rétroaction sur l’orientation du plan de mise en œuvre du développement économique
Ministère du Développement économique et du commerce	Centre d’entreprenariat
Société de développement de l’industrie des médias de l’Ontario Commissaire aux films	Efforts de développement du secteur du film et de la télévision
Développement économique de Calgary Commissaire aux films	Efforts de développement du secteur du film et de la télévision
RDÉE Ontario	Occasions de partenariats dans des projets orientés vers la communauté francophone

BACKGROUND

Economic Development is a critical component of any municipality’s long-term decision making process.  There is a significant role for economic development to help shape the creation and implementation of policies across the organization, and to move the City towards sustainability by increasing quality of life and community prosperity.  The proposed implementation plan represents a significant opportunity to shift the City’s thinking and actions on economic development to be more consistently and clearly focused, aligned with directives from Council as articulated through its approved economic development strategy.

On July 14, 2010, City Council considered a report titled “Refresh of the Economic Development Strategy” (ACS2010-ICS-CSS-0007) wherein the City’s economic development strategy document – Partnerships for Prosperity – was approved. 

As part of the report, Council directed staff to review Ottawa’s economic development service delivery model against best practices employed by other municipalities.  Additionally, staff was directed to immediately move forward on the following initiatives:

· Explore the feasibility of a business services information hotline;

· Assist with the integration requirements of local chambers of commerce;

· Facilitate effectiveness and collaboration among entrepreneurial service delivery agents;

· Increase the capacity of BIAs to respond to local economic development issues; and,

· Advance the development of an economic development scorecard.

Subsequently, staff prioritized a list of actions that together make up a comprehensive economic development program and set the proposed timelines for their implementation over the next five years.  This report outlines the recommended implementation plan and related resource implications.

External Scan – Best Practices, Performance Rankings and Other Municipalities

A scan of how Ottawa places nationally and internationally as an economic/business centre is revealing: 

· Ottawa is noticeably absent from the “Global Cities Index 2010” that lists 65 high-potential municipalities, while Toronto and Boston are listed. The index ranks metropolitan areas based upon 25 metrics across five dimensions including: business activity, human capital, information exchange, cultural experience, and, political engagement (http://www.foreignpolicy.com/node/373401). 

· The Brookings Institution think tank, in partnership with the London School of Economics and Deutsche Bank, has published a 2010 list of 150 cities from around the world to measure their economic performance.  The locations in the report were selected for high-value economic activity in their respective nations and world regions.  While the listing is nearly inundated with capital cities, there is no mention of Ottawa anywhere in the 52-page document that lists other Canadian cities including Montreal, Vancouver and Toronto  

(http://www.brookings.edu/~/media/Files/rc/reports/2010/1130_global_metro_monitor/1130_global_metro_monitor.pdf).

· A study published in 2010 by PricewaterhouseCoopers called “Cities of Opportunities: A look at the world’s hubs of finance, commerce, sustainability and culture” does not mention Ottawa in its listing of cities that are forward-looking for business opportunities.

· Despite 20 per cent of Ottawa’s GDP being focused on technology, Ottawa is lagging in its representation on Deloitte’s list of top 50 emerging technology firms with just five firms making the list.

· The Conference Board of Canada in its “Winter 2011 Metropolitan Outlook” report has placed Ottawa at the bottom of the list of major Canadian centres when it comes to GDP growth for the next four years. Furthermore, this same report estimates a sizeable loss in public sector jobs, as well as continued weakness in the local high-tech sector.

· Ottawa-Gatineau’s diversity index (http://www.conferenceboard.ca/documents.aspx?did=4067) is reported by the Conference Board of Canada as 0.35 (1.0 being highly diverse and 0.0 being not diverse).  Lack of diversity puts Ottawa’s economy at risk if the sectors of concentration (high tech and public administration for Ottawa) suffer negative impacts. The following table shows Ottawa-Gatineau’s economic diversity index in context with other major Canadian municipalities. 

Municipality	Conference Board of Canada Diversity Index
Halifax	0.88
Quebec City	0.77
Montreal	0.89
Ottawa-Gatineau	0.35
Toronto, CMA	0.88
Calgary	0.77
Edmonton	0.90
Vancouver	0.92

· Ottawa does place highly in other rankings of smart and innovative cities. In 2010 Ottawa was included amongst the top seven most intelligent communities by the Intelligent Community Forum (http://www.intelligentcommunity.org/index.php?src=news&refno=433&category=Partner+News&prid=433.)

The aforementioned rankings provide a compelling case for the need to transition the City’s existing economic development efforts to a more comprehensive economic development program.  That having been said, Ottawa also has a number of key strengths, which are important strategic advantages that will enable Ottawa to successfully compete globally for business and human capital.

· Ottawa is recognized as a city with many high-value quality of life features.  In fact, just recently, Ottawa was named as one of the ‘best places to live’ (MoneySense, 2011).

· Ottawa’s economic development anchor is the federal government presence that brings talent, the seat of national policy development, cultural assets and international linkages. The City’s proposed economic development implementation plan leverages these advantages to maximum benefit while also diversifying the economy to protect against downturns in the public sector.

· With a high concentration of university graduates residing in the city, Ottawa has the highest level of employment in “creative” occupations in Canada at 43 per cent. Five post-secondary institutions, hundreds of government and academic research centers, and an estimated $3 billion in total public and private research and development funding spent in the city every year attest to our knowledge strengths and a strong innovation infrastructure.  With one of the highest concentrations of “creative class” workers in Canada and North America, Ottawa is poised to lead and dominate in the new knowledge-based economy.

· Social enterprises contribute to local economies by actively engaging with and providing opportunities for those facing significant barriers to employment. Ottawa has a rich history of citizen-led innovation in responding to community needs that are not met by the market or by the state. Social enterprises can also have a considerably positive effect on quality of place while reducing public spending on social services.

· Micro and small businesses in Ottawa (self-employed and businesses with less than 10 employees) account for more than 21 per cent of all businesses in Ottawa and represent a substantial part of the city’s economy. Just as arts and culture and social enterprises develop a city’s quality of place, so too do micro enterprises through the provision of retail, finance and insurance and accommodation and food services. In many instances, these businesses are supported through Ottawa’s Chambers of Commerce and Business Improvement Areas. Entrepreneurs, who are starting a new venture or commercializing a new idea, may require additional supports through business start-up and expansion. Networking among entrepreneurs can also help these smaller firms to grow and prosper.

· The fact that Ottawa is also the capital of a G-8 nation brings a unique focus to this region and its distinct advantages. International embassies and consulates in Ottawa offer international trade and investment opportunities. Our population is ethnically diverse with links throughout the globe, and we have a high concentration of bilingual residents.  As Canada’s capital city, the National Capital Commission ensures that we represent the nation with natural and cultural assets befitting our stature.

· Ottawa is a city that is not just a hot spot for emerging technologies, research and education but also a magnet for people from around the country who play an active role in Canada’s political system. This has led to a significant critical mass of policy makers, industry associations and a wide variety of non-governmental groups based in this city. Ottawa is truly a key decision centre for economic issues, as well as matters that affect all parts of Canadians’ lives.

Best practices studies have indicated that recommendations for improving economic development in Ottawa should consider the following factors:

· Clear lines of responsibility;

· Municipal leadership;

· Focus;

· Realistic collaborations; and

· Performance measurement.

The need for municipal leadership and focus is echoed by the historical trend of investments in economic development activities.  The graph below illustrates the ebb and flow of investments in economic development by the City of Ottawa since 2001.  Despite an increasing population – a rise of more than 10% in population since 2000 – it illustrates that investment in Economic Development by the City of Ottawa has fluctuated during that period.  In order for economic development activities to be successful, there must be a focused and committed strategic vision to ensure Ottawa will benefit in the long-term – while it is important to be reactive to activities and circumstances that may emerge, the resiliency of Ottawa as an exceptional place to live, work and play depends on the presence of proactive measures as well. 

DISCUSSION

The following paragraphs provide a background summary of the aforementioned components, initiatives, and proposed economic development tools, as well as a list of key strategic actions and benefits associated with these activities.  Together, these components represent the proposed comprehensive economic development program that is being recommended for implementation during this term of Council. The different components of the program include:

· Creation of Invest Ottawa;

· Business Improvement Areas Support;

· Community Economic Development;

· Creative Industries Development;

· Entrepreneurship Sector Support;

· Tourism Development and Major Events Office;

· Communications Tools; and,

· Performance Measurement Tools. 

Moreover, the necessary modifications to the service delivery model are also discussed.  Internally, the Economic Development Branch requires staff to move from generalist roles to specialist roles in order to align with the components of the proposed comprehensive economic development program.  Externally, there is a need to build on the strengths of existing stakeholders, while responding to trends and the need to diversify the city’s economy.  As such, proposed modifications include the creation of “The Ottawa Partnership” (TOP), which will be made up of key stakeholders, including the private sector, and co-chaired by the Mayor.

Invest Ottawa

Background
The proposed economic development program focuses on key industry sectors that have the greatest opportunity for growth and provides additional supports to small- and medium-sized enterprises in order to enable strategic investments in Ottawa’s local economy.

In this light, Invest Ottawa is envisioned to have two focused purposes: 1) diversifying the local economy through a proactive and progressive approach to attracting investments; and 2) expanding and retaining local business.  Such an organization would build on the strengths and expertise of the “Global Marketing” at OCRI and will be the foremost voice in assisting with both inward investments and trade development. Invest Ottawa will be non-membership based and focused on key industry sectors. Further, it will market Ottawa to select international geographic regions that are most relevant to our local economy.

The City of Ottawa will work closely with OCRI’s board and management to create Invest Ottawa. All efforts will be made to create a program that not only captures the vision of Invest Ottawa described above, but also utilizes OCRI’s existing relationships with international partners.  As part of the negotiations with OCRI, staff will work to focus services to meet priorities specified in Partnerships for Prosperity in alignment with the principles of Invest Ottawa.

Without predetermining the organizational structure of Invest Ottawa, staff will ensure that the aforementioned key elements of effective service delivery, clear lines of responsibility, municipal leadership, focus, realistic collaborations and performance measurement are considered. (Examples of sample organizational structures for an Invest Ottawa type organization were reviewed in the Service Delivery business case). Where feasible, the Chambers of Commerce will also be requested to participate in providing feedback on the creation of Invest Ottawa.

1) Investment Attraction (IA)

IA will be all efforts that are geared towards securing investments into Ottawa. These investments can be in the form of investment capital for the local companies, as well as opening up of a local facility of a company previously not present in Ottawa.

IA would include targeted marketing of Ottawa as an investment location to both other parts of Canada, as well as internationally in key geographic markets.

Further all IA activities will be restricted in certain specific industry sectors including: Green Energy, Aerospace & Defence, Photonics, Life Sciences, Wireless Technologies, Digital Media, Advanced Manufacturing, Financial Industry, Communications Enabled Applications, Advanced Manufacturing & Film/Television.

It is proposed that each of the sectors identified above would be managed by a business development expert. A typical business development expert would identify key geographic regions and shortlist potential IA attraction targets in each of these regions. The business development manager would then build a relationship with those firms and work towards making the case of Ottawa as a potential market for these national/international companies.

Outreach activities for national/international IA targets would utilize all methods of communications including in-person meeting of high potential opportunities. A reasonable target would be established for each business development manager to identify and close on deals with the understanding that major investment deals can take 24 to 36 months.

2) Business Retention and Expansion (BRE)

BRE is the process of identifying high potential companies currently present in Ottawa in each of the sectors identified above and working with them to ensure their long-term viability in Ottawa.

BRE would involve two distinct client groups: (a) existing firms in Ottawa that are looking to relocate to another part of Ottawa (expanding/downsizing) and would require assistance, such as site selection; or, (b) local companies looking to increase exports and looking for national/international opportunities. This would involve understanding the company’s expansion/trade development goals, identification of partners in their export markets, linkages of local companies with help resources abroad (DFAIT, international economic development agencies, etc.).

Performance metrics for BRE would include targets for outreach to local companies (e.g., visiting and maintaining contacts with 25 local firms for each sector in a 12-month period).

The economic opportunity for Ottawa is significant. All of these sectors represent a natural fit for Ottawa’s knowledge based industries; they are high growth areas and have major competition from both Canadian and international cities.

All work done in both IA and BRE would be focused and related to individual companies.

Benefits

In addition to the clear focus and realistic collaborations that Invest Ottawa will provide the City, benefits and opportunities will accrue for each of the sectors that Invest Ottawa will target.  A few examples are noted below.

Green Energy

The 2010 Clean Energy Trends Report (sponsored by Bloomberg & Deloitte) shows a global revenue base of $144.5B from solar, wind and bio-fuel industries. This number is expected to reach $334B by 2019. These sectors contribute to 830,000 jobs worldwide today and this number is estimated to reach 3.3 million by 2019. A separate 2008 United Nations Report (UNEP: Green Jobs) estimates the total value of clean/environmental industry is roughly $1.3T and is expected to hit $2.2T by 2020. Industry Canada estimates a near term revenue target of $10B in renewable energy businesses in Canada.

In light of the Province of Ontario’s current commitment to own a big piece of the global green energy sector, Ottawa is well-positioned to use its knowledge-based work force to capture the higher end of the clean energy supply chain.

Aerospace and Defence Industry

The Aerospace and Defence industry in Canada employs 105,000 people and generates annual revenue of $26.5B (Statistics Canada, November 2009) including over a billion dollars spent on R&D. Ontario controls $9B of the total Canadian market share with 37,000 people employed with an estimated 200 companies in Ottawa.

The existing size of the global aerospace industry is in the neighbourhood of $450B according to a recent study by Aero Strategy Management Consulting firm done for the Aerospace Industry Association of Canada (AIAC).

An important point is that 85 per cent of the Canadian aerospace output is for exports.  This represents an opportunity for Canada/Ottawa because there is future international growth expected in this sector.

Photonics

DFAIT estimates the current size of the global photonics industry at $710B. It spans a broad range of industry applications. The Optoelectronics Industry Development Association (OIDA) forecasts an annual industry size of $1.2T by 2017.

The Canadian Photonics Consortium (CPC) estimates that the Canadian industry accounts for $4.5B in annual revenue and 20,000 in jobs. According to the Centre for Photonics at the Ontario Centres of Excellence (OCE), the photonics sector employs around 10,000 people in Ontario. These jobs are high-value, predominantly in R&D (41%) and manufacturing (32%) with R&D spending around $500M. The CPC estimates Ontario commands $3B of the national market. Ottawa boasts about 70 firms producing products primarily destined for export.

With Ottawa already a leading Canadian centre for photonics, a unique opportunity exists to build upon the existing expertise and capture further global market share.

Life Sciences

Ontario’s life sciences industry employs more than 40,000 people and generates annual revenues of more than $15B. More than 30 per cent of the industry output is destined for international markets. With 11,000 industry jobs and several research institutes, Ottawa is well-positioned to convert its expertise into further penetration of the global market.  In particular, biotechnology represents an excellent growth opportunity with Canada representing $2.1B of the $79B global market (Ernst & Young: Global Biotechnology Report 2010).  With Ottawa’s enviable knowledge base, any efforts to grow this sector can be expected to be well-rewarded.

Digital Media

The Digital Media industry sector is experiencing one of the fastest growth rates in the world. An industry worth over $350B today is expected to grow to $2.2T in the next 10 years.  

Ontario Media Development Corporation (OMDC) estimates that Ontario controls just over a billion dollars of the total $5B Canadian digital media industry.

Today, Ottawa captures a fraction of the Canadian digital media market, which is in turn a fraction of the global industry. However, an exciting potential exists to diversify Ottawa’s technology base by leveraging the existing knowledge-based work-force and supporting SMEs to capture a much greater market share.

Film and Television

Total film/television production volume in Canada for 2008 stood at $5.28B, with Ontario’s share at $1.9B. 2009 saw an increase in domestic production in Ontario by 24 per cent while foreign production increased by 114 per cent. The above statistics come from Ontario Media Development Corporation and illustrate the opportunity for Ottawa. In 2009-2010, the Ottawa region saw an average of 500 film shooting days that translated into approximately $50 million of production of which $20 million was spent directly in the local economy. In fact, 40 per cent of this amount was generated by local companies.

The opportunity for Ottawa to capture a much bigger share of Ontario’s film/television sector will be realized with increased resources and by including these activities in Invest Ottawa.

Business Improvement Area Support

Background
The proposed economic development program expands the City’s support for Business Improvement Areas (BIAs).  Ottawa’s 17 BIAs (the most recent was created in late 2010 and the number is expected to grow further within a few years) now represent some 4,000 businesses. They are associations of business or property owners who form city-supported entities to stimulate business within defined neighbourhoods and play a critical role in the city’s economic life.

To date, the city has supported BIAs mostly by helping fund their creation, setting their boundaries, and collecting a special tax or levy and transferring that money to the BIAs to use in accordance with their approved budgets. However, there has been no coordination between BIAs, and some programs that support their activities ended in tandem with the mandate of the 2006-2010 Council. Hence, there is a need to re-assess the BIA structure. 

Key Strategic Actions

Enhanced support of BIAs will stimulate local economic activity, making the city more liveable and supporting key elements of Ottawa’s five-year investment strategy for sustainable economic development.  This can be accomplished through the following strategic actions:

· Reinstate assistance programs (the BIA formation grant and the research grant program);

· Create GoBIA (Greater Ottawa BIA Association), a new body that would increase efficiencies of the BIA system by creating a much-needed coordination mechanism;

· Fund co-op students to work in support of BIAs;

· Provide new economic development programs to improve façades and murals; and,

· Repurpose one existing Economic Development staff member as a dedicated BIA specialist.

These efforts would allow BIAs to more effectively do their job of acting as agents for economic stimulation at the community level. Since BIAs also often contribute to community cohesion through beautification projects and neighbourhood activities, this would lead to a strengthening of Ottawa’s overall vitality as well as its economic competitiveness. Enhanced support also contributes to the City’s long-term sustainability objectives. 

Benefits
The City’s increased assistance is expected to lead to measurable improvements in retail sales in BIA areas. This in turn is expected to produce other signs of economic prosperity such as increased property values and rents in the same five-year period, compared to neighbourhoods without a BIA. The increase in property values and corresponding rental rates is difficult to predict, but by way of anecdotal evidence to demonstrate this effect, it has been noted that retail rentals in the Westboro BIA have increased from an average of $12.00 per square foot to a current offer of $50.00 per square foot within the past decade, when BIA activity has had tremendous beneficial impact.^[1]

Since BIAs invest in improvements to streetscapes and physical environments, ensuring their sustainability and increasing both their efficiency and effectiveness guarantees that they will continue in this activity and help the City of Ottawa better showcase our city to our residents and visitors.

Community Economic Development

Background

The proposed economic development program includes an expanded approach to the City’s relationship with non-profit agencies, including entrepreneurial support agencies, environmental advocacy organizations, arts/culture organizations and social services organizations by focusing on the development of “social enterprises”.

Social enterprises (SEs) offer the potential to diversify the revenue streams of non-profit organizations (NPOs) by bringing products and services to market. The surplus revenue generated is applied to the organization’s primary mission rather than returned to investors. The revenue-generating activities of the NPO may employ their target populations for even more benefit. Social entrepreneurs themselves offer innovative approaches to social, environmental, arts, culture and economic development issues.  The vulnerable population segment of Ottawa society is significant. Aboriginal peoples, people with disabilities, youth, new immigrants, visible minorities, Francophones and women all disproportionately bear economic hardships that leave Ottawa’s economy performing below its aggregate potential.

Key Strategic Actions

· Match non-profit organizations that run, or plan to run, social enterprises with business students to help develop the concept, strategy, execution and knowledge transfer to the NPO;

· Identify procurement opportunities for social enterprises and facilitate their participation in the bidding process;

· Coordinate the activities and initiatives of agencies and organizations across Ottawa by contracting an external partner that will also act as a liaison to the City;

· Form an internal leaders table across City Branches and Departments to coordinate the City’s response to CED agents and organizations;

· Fund demonstration projects through one-time or seed investments in support of quadruple-bottom line initiatives;

· Gauge the effectiveness of the City’s investment in CED and SE activities through performance measurement and program evaluation; and,

· Establish relationships with appropriate provincial and federal government ministries, departments, and agencies to support CED and SE development and capacity building in Ottawa.

Benefits

By enhancing programs and services delivered through local community organizations, this program will facilitate the integration of groups who face disproportionate barriers to their full participation into the local Ottawa economy. 

In addition, this initiative will contribute to improving the quality of life of our residents while establishing relationships with appropriate provincial and federal government ministries, departments, and agencies, as well as the non-profit sector.

Creative Industries

Background

The proposed economic development program includes increased support for the local film and television industry through a new business and support model that includes investing in an industry-led consortium and lab to support the digital media industry.

Film, television and digital media are important components of the creative economy, which have been identified as strategically important in the City’s five-year economic strategy, Plan for Prosperity. Professor Richard Florida, a leading authority on the knowledge economy, estimates that 43 per cent of Ottawa’s workforce is employed in the creative industries – one of the highest percentages in the world.  However, there is currently no concerted economic development effort focused on investing in Ottawa’s creative industries sector.  As a consequence, this sector and its economic potential are underdeveloped. 

Ottawa is exceptionally well-placed to participate in the creative economy, but it has failed so far to take advantage of its assets and as a result is falling behind other cities in film, television and digital media. Primarily, Ottawa is not able to attract its share of productions because facilities and funding are lacking. For example, Ottawa is one of the only major cities in Canada without proper film production facilities.

Key Strategic Actions

1. Increase funding to the Ottawa-Gatineau Film and Television Corporation (OGFT) by $115K, and integrate OGFT with Invest Ottawa to ensure film and television business development activities take place alongside other key emerging industry sectors in Ottawa.

If future funding was available, another potential area of investment within the Creative Industries sector is the creation of an industry-led digital media lab.

Digital media can be defined as the creative convergence of digital arts, science, technology and business for human expression, communication, social interaction and education.  It refers to screen-based content, such as gaming, that interacts with the user through a full spectrum of platforms including the Internet, handheld devices and television. 

There are a number of digital media labs throughout Canada.  Some of these labs are not-for-profit, industry-led consortiums like the one proposed as part of this program, while others are run by universities and colleges. The two not-for-profit, industry-led consortiums are Kitchener-Waterloo’s Communitech Hub and Banff’s Banff New Media Institute. The Communitech Hub is similar to what is being proposed for Ottawa: it serves as an accelerator for digital media companies, ideas and innovation. Its focus is to bring together early stage companies, enterprise partners, and government and academic organizations to focus on commercial development, job and wealth creation as well as building tomorrow's technology giants.

As Ontario’s secondary digital media hub, Ottawa is well positioned to take a leadership role in this market and obtain a significant market share by 2018 if it were to have a digital media lab.

The LRT provides an additional opportunity to showcase digital media in Ottawa: the Economic Development Branch is currently working with the LRT office to explore if one of the future LRT stations will be dedicated to highlighting and showcasing the strengths of the local creative industries sector with a focus on digital media technologies.

Benefits

Total film/television production volume in Canada for 2008 stood at $5.28B, with Ontario’s share at $ 1.9B. 2009 saw an increase in domestic production in Ontario by 24% while foreign production increased by 114%. The above statistics come from the Ontario Media Development Corporation (OMDC) and illustrate the opportunity for Ottawa. In 2009-2010, the Ottawa region saw an average of 500 film shooting days that translated into approximately $50 million of production of which $20 million was spent directly in the local economy. In fact, 40 per cent of this amount was generated by local companies.  The opportunity for Ottawa to capture a much bigger share of Ontario’s film/television sector will be realized with increased resources.

Investments in an industry-led digital media consortium and lab would further elevate Ottawa’s stature and economic growth potential in the creative industries.  The digital media studio will be equipped with the leading edge technology necessary to support high-end media production including, advance motion capture systems, high definition quality cameras, high-end software for video, audio and visual effects, as well as 3-D printers and scanners used for rapid prototyping and reverse engineering. The studios and sound stages will provide space for producing virtual sets and will be acoustically controlled and equipped with lighting controls and fixtures able to adapt to different scenes and sets. The studios will also be equipped with advance recording technology for voice and instrument arrangements.

Entrepreneurship Sector

Background

The proposed economic development program addresses the need for Ottawa to attract and develop new businesses.  Making Ottawa a competitive global hub for innovative, knowledge-based talent, businesses and organizations is a key element of Partnerships for Prosperity, the City’s five-year economic strategy. Moreover, research shows that start-ups that develop organically are virtually the only drivers of job growth; consequently, economic development policies need to be aimed at them.  If Ottawa fails to expand its economic base, the city will be dependent on its major employer: the federal government.  Consequently, the centrepiece of the program is the co-location (under one roof) of an entrepreneurship centre, a regional innovation centre and a business incubator.

While Ottawa has programs and information to assist entrepreneurs wishing to start businesses, there are no “pathways” to help these individuals navigate through the multiplicity of programs to find the ones that are most relevant to their specific needs. It takes considerable effort, persistence and determination to take full advantage of the wide range of assistance available.

Currently, the Ottawa Centre for Regional Innovation (OCRI) primarily leads the entrepreneurship efforts in the City with municipal and provincial support.  OCRI operates the Entrepreneurship Centre at City Hall, with satellite facilities in Orléans, Kanata and Barrhaven and a roving consultant to respond to consultation requests. Other programs such as the Lead-to-Win program at Carleton University are supported on an ad hoc basis.  However, the proposed economic development program presents an expanded suite of services including greater market research and the creation of an incubation centre.

Key Strategic Actions

There are eight measures which together make up a suite of initiatives that mutually reinforce each other and create a dynamic environment for entrepreneurship and innovation. These are:

· Enhancing the existing Entrepreneurship Centre and the existing Regional Innovation Centre and having them co-locate with a new 14,000-square-foot business incubation centre. Governance measures for the co-located centres remain to be worked out; several different models are possible.

· Sponsoring local capacity to develop, market, and manage industry or sector “keystones” to foster increased collaboration and business transactions.

· Supporting Ottawa “challenge” competitions among students by building on past competitions led by OCRI TalentBridge program participants.

· Creating a program of proactive and reactive outreach to the city’s businesses to provide them with assistance, facilitation, problem-solving, referral and advocacy, as appropriate.

· Creating a program of market research and analysis for entrepreneurs to help them identify business opportunities.

· Developing a tool that would allow entrepreneurs to navigate the various programs and services available to them.

· Developing a matching service to connect government agencies and departments on the one hand, with local suppliers on the other.

· Creating a campaign through media, presentations, events and competitions to encourage and promote entrepreneurship as a career option and a valuable employment asset.

Benefits

If approved, the 2011 investment would:

· Fund enhancements to entrepreneurial consulting and programming,

· Foster challenge events for students and entrepreneurs,

· Support Francophone entrepreneurs,

· Fund programs to encourage students to consider entrepreneurship careers (e.g. Junior Achievement),

· Enable increased access to micro-loans and other capital; and,

· Develop collaboration tools and methods (e.g. ecosystem models).

2011 would also see preparation work undertaken (including organizational structure and governance) for the new incubation centre and its co-location with the Entrepreneurship Centre and the Regional Innovation Centre. Subject to further budget approvals, 2012 to 2014 would see investments in the co-location centre itself with inherent increases to entrepreneurship programming offered across the city.

Tourism Development and Major Events Office

Background

This proposed economic development program will bring a much needed focus on tourism development and the attraction of major events through the creation and funding of a Major Events Office.

Sport and cultural tourism is a rapidly growing niche within the tourism industry in Canada, worth $3.4 billion in annual spending (Statistics Canada, 2008) by domestic travellers. Hosting events related to those sports is a major opportunity. In 2010, Ottawa was recognized as a World Festival and Event City by the International Festivals and Events Association – a recognition that speaks to the potential of investing into cultural and major events.

Cities in Canada and abroad increasingly use special events offices or sports commissions to attract and support major events. Many organizations will not consider having events in cities that do not have such an office to support bids.  The creation of such an office in Ottawa will allow the City to capitalize on opportunities that it may have missed in the past.

With no dedicated event development staff, Ottawa’s penetration into the national and international sporting event marketplace has been somewhat limited given its potential for hosting events. The current role of the City of Ottawa’s Economic Development Branch in attracting major events has been limited to working with local sports associations or event rights holders who approach the City to help develop and fund bids.  The City’s Event Central Unit also helps to facilitate the needs of events operators including logistics and other support.

The City of Ottawa engaged an external expert to complete a major events strategy in the fall of 2010. This strategy confirmed the economic potential of major events for Ottawa – if Ottawa was able to host annually as many major events as Hamilton, the economic impact could be approximately $67M.  As such, this major events strategy formed the basis of the recommendations that are part of this component of the comprehensive economic development program.  The return on investment in major events attraction is significant, and there can be side benefits ranging from enhanced visibility to legacy sports and cultural installations.

Currently, the Economic Development Branch is pursuing the following major events:

· 2012 JUNO Awards

· 2013 IIHF World Women’s Hockey Championship (awarded)

· 2014 FIFA U-20 Women’s World Cup

· 2015 FIFA Women’s World Cup

Key Strategic Actions

The creation and funding of a new Major Events Office under Ottawa Tourism is the primary key strategic action. The office would require hiring a full-time staff resource, co-funded between Ottawa Tourism and the City’s Economic Development Branch.

In parallel, this initiative aims to create a major events fund that would underwrite the cost of attracting, bidding on and promoting these major events.  If approved, this fund would require $505,000 in 2011.  

The major events office would:

· Take guidance from a formal group of tourism stakeholders called the “Tourism Development Council”.  Council members include  the City, Ottawa Tourism, the Ottawa Chamber of Commerce, OCRI, the Ottawa International Airport Authority, the Ottawa Convention Centre, the Ottawa-Gatineau Hotel Association, the National Capital Commission, and the Ontario Ministry of Tourism

· Attract events and provide resources to support bid proposals

· Work closely with stakeholders in tourism, government, sports and the private sector to ensure coordinated action

· Work with partners to champion efforts to make Ottawa the major events capital of Canada, in accordance with the City’s stated policy objectives

· Co-ordinate a centralized calendar of events for the region that maximizes facility usage (e.g. the “Rink of Dreams”), capitalizes on marketing activity and benefits from economies of scale

Benefits

Studies consistently show there is a good return on investment for sports and culture events. For example, the City provided $200,000 to support the hosting of the 2009 World Junior Hockey Championships. Based on Canadian Sport Tourism Alliance and Ontario Ministry of Tourism research, this would have resulted in over $56 million in direct visitor spending in Ottawa, or a return of $280 for every dollar invested by the City (Canadian Sport Tourism Alliance, Economic Impact Assessment, 2009).

Aside from attracting tourist dollars, major cultural or sports events also often leave behind improved infrastructure and facilities. For example, by hosting the 2010 IAAF World Junior Track and Field Championships, the City of Moncton was able to leverage an investment of $5 million and partner with the Government of Canada, the Province of New Brunswick and the University of Moncton to build a 10,000-seat, $22.5 million track and field stadium. Ultimately, Ottawa would get better facilities, underwritten by additional visitor expenditure – thereby improving the quality of life of its residents. 

Communication Tools

Background
The proposed economic development program also includes the development and implementation of six new communications tools that will better position Ottawa in the knowledge economy.

In an increasingly global competitive environment, the availability of so-called “creative class” workers has become a huge factor in how companies succeed and why they locate where they do. In that context, prosperity now depends on the ability of a community to attract and retain talent, to attract visitors and to stimulate economic growth. Ottawa’s ability to communicate its unique assets and its benefits as a place to live, visit or do business depends on having the tools to do so effectively.

The Economic Development Branch seeks to achieve long-term sustainable development and economic growth by ensuring that the city is shown in its best light and that its key assets and advantages are communicated to our various audiences: residents, the business community and the global market.

Nonetheless, you cannot sell yourself as a cutting-edge city if you are using outdated communications tools.  For example, the skyrocketing popularity of Smartphone apps means that cities without them are labelled as “behind the times.”

Having up-to-date communication tools allows Ottawa to retain its competitive edge and showcase itself to visitors and potential investors, while at the same time better serving its residents (both of these goals are among City policy objectives).

Key Strategic Actions

This initiative responds to the current competitive business environment, which is demanding change, by developing and implementing new economic development communication tools:

· Enhancements to ‘Discover Ottawa’- smartphone application (launched in Mar-2011);

· A business information hotline;

· A sophisticated online business mapping tool aimed at site selectors;

Taken together, these tools will keep Ottawa on the radar for businesses and tourists, while better serving its residents. The implementation of this “communications toolkit” will require coordination with a number of partners including Ottawa Tourism.  The Economic Development Branch will work with the City’s Information Technology Branch to ensure synergy.

Benefits
This suite of communication tools will increase Ottawa’s profile as a tourist destination and a place to do business while showcasing its potential as a centre of innovation.  The smartphone application provides strong evidence of these benefits: as of early May, “Discover Ottawa” had been downloaded more than 4000 times, and has stayed in the top 100 for social networking applications at the App Store, and users have rated the app at 4 out of 5 stars.  Clearly, these communication tools offer great exposure of Ottawa as a place to live, work, and play.

Performance Measurement Tools

Background

This proposed economic development program includes the development and implementation of an up-to-date technology tool (an information scorecard) that will allow the City to continually gauge Ottawa’s economic indicators and compare them with those in other cities.

In order to assess the state of its economy and better compete with other cities, Ottawa needs to know how its economy is performing. Currently, the City of Ottawa monitors between 22 and 56 different categories of metrics, and many more metrics for the greater Ottawa area. However, many of these metrics are not examined through an economic development lens, and are not benchmarked against national and international competition.

Key Strategic Actions

1. The creation of a specific economic development scorecard that captures key performance indicators will enable the Economic Development Branch to look at a number of measurements that show the type and level of development activity occurring in the region. A scorecard is a Web-based product that consolidates data taken from different sources, or provides different perspectives on a single data source and presents the information as a series of highly visual charts and tables.

2. In addition to measuring quantifiable key performance indicators, best practices also reveal the importance of compiling local business sentiment. An annual business survey will capture opinions on the economic landscape for Ottawa and local industry sectors, the outlook for Ottawa as a place for business expansion, organizational plans for hiring and capital budgets. The survey will be carried out by an external party and the findings captured, explained and presented along with the rest of this economic development scorecard.

Benefits

A scorecard will allow the City to see, at a glance, how well it is doing in the area of economic development relative to the past, as well as compare how well it is doing relative to benchmarked cities. The initiative will continue to position the City as a leader in the use of information technology as a way of communicating and connecting with constituents, the local business community and investors.

Importantly, this program will ensure that the City is getting a return for its investment on its economic development programs and provide proxy metrics for the performance of its service delivery model.  Ultimately, this will allow the City to respond to the local economic situation and to re-purpose its programs or funding on an ongoing basis to enable prosperity.

The implementation of the scorecard will address some of the concerns and issues raised by the Auditor General’s office in their recent preliminary review of OCRI’s relationship with the City of Ottawa, to be tabled on September 8, 2011.

Economic Development Service Delivery Realignment

In order to be successful, the City’s proposed economic development program requires the collaboration of multiple stakeholders, each contributing towards achieving the vision that was outlined in the Plan for Prosperity.

To date, the staff report has articulated a proposed economic development program that responds to the challenges that have been identified while leveraging Ottawa’s many strengths.  The next section of the report speaks to the service delivery model that needs to be in place to successfully deliver the program.

As with most operational services provided by a municipality, there is a debate about whether a municipality should outsource its economic development completely, maintain a large economic development organization within City Hall or work within a hybrid model. It has typically been the practice of smaller/rural municipalities to perform all economic development activities in-house. Such an internal group would be quite small and perform business outreach, limited marketing functionalities and employment land development.

However, in larger urban centres, a hybrid model is often seen as a solution. A nimble external business development agency can respond to business queries at a pace the business community expects. Consequently, a much smaller internal economic development group can focus on micro-economic development issues within the City, research and analysis, economic intelligence, inter-governmental relations, performance measurement and stakeholder collaborations.

After examining best practices in cities around the world, staff have concluded that a hybrid service delivery model for economic development will deliver the best results.  The proposed modifications to the economic service delivery model were guided by a study of best practices for economic development in Canada, the U.S., Europe and Asia. As mentioned earlier in this staff report, a meaningful economic development service delivery model must include a number of key elements: clear lines of responsibility, focus, realistic collaborations, municipal leadership and performance measurement.  A failure to make changes in Ottawa’s existing economic development model will make the city vulnerable to falling behind in a world where competition for investment and workers has gone global.

Implementing the changes to the existing hybrid service delivery model is expected to generate progress on a number of fronts, including:

1. Improved responsiveness of the City of Ottawa to the needs of the business community;
2. Alignment and collaboration between various economic development stakeholders;
3. Clear understanding of roles and responsibilities;
4. Diversification of local industry sectors; and,
5. A proactive and progressive approach to attracting investments, as well as expanding and retaining local businesses.

The Economic Development Branch (Branch) is part of the Community Sustainability Department. The group consists of a manager, an administrative assistant that is shared with another branch and four economic development officers. These officers are generalists and respond to a broad range of internal and external queries.

The Branch is also responsible for monitoring OCRI’s performance, as well as managing a Grants and Contribution fund that is used to provide financial support to a variety of external economic development stakeholders such as Ottawa Gatineau Film & Television Corp. (OGFT), Ottawa’s Countryside, the Ottawa Community Loan Fund, etc.

The City of Ottawa should only be considered one of many facilitators of economic development. Some of the major stakeholders are briefly described below:

Ottawa Tourism: This organization provides industry leadership and destination marketing to attract visitors, tours and conventions to Ottawa. Founded in 1971, it is a not-for-profit, membership-based organization, with 350 tourism-related member businesses that work together to raise the profile of Ottawa and Canada’s capital region as a diverse and exciting place to visit. Recent provincially mandated changes have meant that Ottawa Tourism is now a Regional Tourism Organization (RTO) and as such is responsible for Ottawa, Prescott and Russell and United Counties.

Today, the Economic Development Branch has a seat at the Tourism Leadership Council, which is a group of external stakeholders to Ottawa Tourism that provides ongoing feedback and opportunities for collaboration in the tourism sector.

Local Real Estate Developers: A comprehensive municipal economic development plan will be incomplete if important enablers of economic activities, such as the local development community, are not part of the conversation. The Alliance for Building a Better Ottawa is a recently formed group consisting of the Ottawa Home Builders Association, the Building Owners and Managers Association, the General Contractors Association of Ottawa, the Ottawa Construction Association and the Ottawa chapter of Professional Engineers Ontario.

It is important to note that while members of the Planning and Growth Management Department meet with these groups, these meetings are operational and do not necessarily include an economic development focus.  Staff will proactively engage the development community and work with other departments, such as Planning Growth Management, to ensure the inclusion of a broader economic development perspective in regularly occurring conversations.

Ottawa International Airport Authority (OIAA): By connecting Ottawa’s local economy to national and international sources of tourists, workers, investments and students, the OIAA plays an integral role in facilitating economic development in Ottawa. Not only is it involved in moving millions of passengers every year, it is also focused on becoming the most important transportation hub for this region.

The Ottawa International Airport is recognized as an important economic enabler for our municipality. The Economic Development Branch will create and lead a joint Airport Task Force. Members of this group would include all relevant municipal departments and the airport focused on on-going and future initiatives such as planning, policy development, infrastructure projects and economic development. This task force will also be responsible for developing a draft airport vision for the City of Ottawa to be presented to Council for adoption in 2011.

Ottawa’s Countryside: This organization represents over 100 business operators focused on rural tourism.  Some of its core activities include the annual production of a successful “Visitor Guide,” which is distributed in Ontario, Quebec and the United States, and the creation of networking opportunities with rural tourism stakeholders.  The Economic Development Branch provided Ottawa’s Countryside with $60,000 from its Grants and Contribution budget in 2010 for operation and marketing.

Ottawa Gatineau Film & Television Corp. (OGFT): This is the only organization that provides support for film and television production in the national capital region. This agency operates on a minimal budget with no long term investment commitment from any of its funding partners (NCC, City of Ottawa and City of Gatineau). It also operates in isolation from any economic development activities being carried out for other industry sectors. A detailed analysis on OGFT is provided in the ‘Creative Industries’ business case.

The Economic Development Branch provided $85,000 from its Grants & Contribution budget for OGFT’s operating budget in 2010.  By increasing funding to OGFT, the City of Ottawa will play a much more proactive role in capitalizing on the opportunities in this emerging industry.

Business Improvement Areas (BIAs): The 17 BIA’s in Ottawa represent about 4,000 businesses. They have an operating budget of roughly $5M and a property tax base of $66M (20% of the commercial tax base). The Economic Development Branch is frequently involved as a liaison between individual BIAs and the City.

The City of Ottawa provides in-kind services specifically related to managing the finances of BIAs. A couple of grant programs ending in 2010 provided matching research grants, as well as funding for BIA formation.

It is expected that the formation of GO-BIA, as well as Council of BIA sessions led by the Mayor will assist in continuing the flow of information between the BIAs and the City of Ottawa.

Chambers of Commerce: There are four chambers of commerce active in Ottawa including Kanata, Orléans, Nepean and the Ottawa Chamber. Together they represent more than 1600 members and can be another channel for information exchange between the City of Ottawa and the business community. 

In October 2010, a joint chamber working group was started as a vehicle for information sharing and joint policy work with the Economic Development Branch. It is expected this joint chamber working group will meet regularly with the City to continue its exchange of information on economic development issues.

Academia: Ottawa is fortunate to be home to world class universities and colleges. Such institutions are an invaluable asset for Ottawa’s economic development efforts.

The Economic Development Branch has no formal channel of communications with local academic institutions.

Multinational Corporations: A number of multinational corporations have a significant presence in Ottawa. These global firms can play a major role in shaping the local economy both through their own operations and by participating in local economic development activities.

The Economic Development Branch has no formal channel of communications with the multinational firms located in Ottawa. Invest Ottawa, as part of its mandate, will be expected to engage the multinational corporations.

City of Ottawa Departments:  A municipal economic development program cannot realize its full potential by operating in isolation from other internal functions. There is no formal process to regularly engage internal stakeholders on economic development issues at the City of Ottawa.

One of the recommendations is to create an inter-departmental team led by the City Manager that will meet regularly to discuss and highlight economic development opportunities.

OCRI: The City of Ottawa has provided the Ottawa Centre for Regional Innovation (OCRI) with funding for a number of years. In return, the expectation is that OCRI will act as the external economic development agent for growing local employment, attracting foreign investments and increasing overall business success. A common misconception is that the City of Ottawa is the sole/primary funder of OCRI. As the table below illustrates, OCRI has a number of other funding partners:

2010 Funding Partners of OCRI (2010 Annual Report)

$000	2010
Corporate Funding	$2,737
Province of Ontario	$1,971
City of Ottawa (Economic Development Core Funding)	$1,865
City of Ottawa (Project Funding)	$1,083
Membership	$635
Government of Canada	$402
Other	$320
Total	$9,013

The figure below identifies OCRI’s broad spectrum of service offerings, which enable the organization to respond to the requirements of its many funders.  The shaded components represent those which are aligned with the City’s proposed economic development plans. 

Key Strategic Actions

· Create a new “The Ottawa Partnership” (TOP) made up of key stakeholders, including the private sector, and co-chaired by the Mayor;

· Form an inter-departmental team led by the City Manager to create formal and regular opportunities for economic development discussion;

· Move from generalist roles within the economic development branch to ones that specialize in key focus areas:  Intergovernmental relations; BIAs; Community economic development and entrepreneurship; Communication tools and emerging sectors; research, trend and policy analysis; and, performance measurement; and,

· Add two specialist economic development FTEs, over the next two years, to address gaps in intergovernmental relations and in performance measurement, research and trend analysis.  The creation of an intergovernmental relations position responds to Council’s approval on October 6, 2010 of a recommendation contained in Corporate Services and Economic Development Committee report number ACS2010-CMR-CSE-0021:

That Council approve the creation of an Intergovernmental Relations Economic Development Specialist position in the first phase of the Economic Development Strategy implementation, and that staff make efforts to accommodate this position within existing resources.

The requisite skill set for this position does not currently exist within the Economic Development Branch.  Efforts will be made to staff the new position from within existing City resources before turning to outside competition.

Spending Plan 2011

The following table shows the 2011 proposed allocations and investment required to implement the economic development implementation plan:

$000	2011
Invest Ottawa (including the Ottawa-Gatineau Film and Television Corporation)*	$  1,550
Entrepreneurship (Entrepreneurship Centre, Incubator, Regional Innovation Centre)	$  1,400
Major Events	$     505
BIAs	$     110
Grants and Contributions**	$     873
Communication / Performance Measurement	$     227
Economic Development Branch (Operating Budget)***	$     873
Total	$  5,538

* 2011 funding for Invest Ottawa will be provided to Global Marketing at OCRI under a Memorandum of Understanding (including the Ottawa-Gatineau Film & Television Office as part of Invest Ottawa)

**The Grants and Contributions budget will be assigned exclusively to Community Economic Development projects beginning in 2012

*** The Economic Development Branch Operating Budget was increased by $200K in 2011 to be able to respond to unforeseen economic development opportunities such as unanticipated events and promotional tours.

These allocations include the $2M increase to the Economic Development Branch’s operating budget as part of the 2011 budget approved by Council. 

Spending Plan beyond 2011 (potential scenarios)

This staff report is seeking approval of the economic development strategy’s spending plan for 2011; however, two scenarios are being provided for Council’s advanced consideration for 2012 and beyond.  Staff’s recommended approach, based on the business cases developed for each program is to provide incremental funding to the operating and capital budgets of the Economic Development Branch in order to realize the full benefits of these programs.  Nevertheless, there is a recognition that Council is under financial constraints as it strives to ensure fiscal stability for the City, and that it will be presented with many new funding requests for 2012.

In this light, the first scenario outlines how funds will be allocated without any further investment in economic development, and the second scenario outlines funding opportunities in order to obtain the maximum benefit from each project.

Scenario 1: No Further Increases to Operating and Capital Budgets, 2012-2014

Table 1 outlines how the Economic Development Branch would recommend reallocating its budgetary expenditures if Council was not able to provide additional funding for projects in 2012 and beyond in order to reap maximum benefit for its efforts.  The scenario functions under the following assumptions:

• Funding continues at 2011 levels without any increase to operating budget;
• Continuation of Regional Innovation Centre (RIC) core funding through OCRI;
• Sustained investment in Community Economic Development would create economic opportunities that address the needs of many groups identified in the City’s Equity and Inclusion Lens and enable their participation in the labour force;
• $550K is the minimum annual investment that the City would have to make if it wishes to compete in major events attraction in a proactive and systematic way through the creation of a Major Events Office with Ottawa Tourism and sharing an FTE;
• Invest Ottawa funding to supplement existing funding for Global Marketing (part of OCRI core funding);
• $200K increase in Economic Development Branch Operating Budget will allow the Branch to respond to unforeseen opportunities, events and promotional tours where a small resource investment may realize a large economic development benefit for the city; and,
• Spending plan for 2011 is realistic despite six months of the year having passed.

TABLE 1:
2012-2014 Funding Allocations without any additional funds

$000	2011	2012	2013	2014
Invest Ottawa (including the Ottawa-Gatineau Film and Television Corporation)*	$  1,550	$  2,265	$   2,265	$   2,265
Entrepreneurship (Entrepreneurship Centre, Incubator, Regional Innovation Centre)	$     1,400	$     1,400	$     1,400	$     1,400
Major Events	$     505	$     550	$     550	$     550
BIAs	$     110	$     110	$     110	$     110
Grants & Contributions**	$     873	$       240	$        240	$        240
Communications / Performance Measurement	$     227	$     100	$     100	$     100
Economic Development Branch (Operating Budget)***	$     873	$     873	$     873	$     873
Total	$  5,538	$  5,538	$   5,538	$   5,538

* 2011 funding for Invest Ottawa will be provided to Global Marketing at OCRI under a Memorandum of Understanding (including the Ottawa-Gatineau Film & Television Office as part of Invest Ottawa)

** The Grants and Contributions budget will be assigned exclusively to Community Economic Development beginning in 2012

*** The Economic Development Branch Operating Budget was increased by $200K in 2011 to be able to respond to unforeseen economic development opportunities such as unanticipated events and promotional tours.

The primary shift in expenditures in this scenario is the move of monies for grants and contributions to fill the gap in funding the business incubator, Invest Ottawa, and the Major Events Office.  The majority of the existing grants and contributions budget for 2011 has already been committed. The role of the Economic Development Branch should not be chiefly a granting agency amidst the need to diversify and strengthen Ottawa’s economy.  With this in mind, the goal is to phase out the generic grants and contribution budget in 2012 and divert funds to longer term priorities specified in the economic development plan. At the same time, funding will be reserved for community economic development initiatives that would be awarded on an annual basis to non-profit organizations exhibiting a strong economic development component to their projects.

In order to develop a successful service delivery model, as shown by the best practice research, clear lines of responsibility and focus must be present, and these can be achieved by concentrating our efforts on the aforementioned projects.

Other impacts of this scenario on the functions of the Economic Development Branch include:

• Two identified FTE pressures will not be filled; consequently, gaps in performance measurement, research and analysis and focused intergovernmental relations will continue to exist internally within the Economic Development Branch, and any intergovernmental relations efforts will be undertaken by the branch manager;
• A minimum annual major event fund of $550K will still allow the City of Ottawa to attract one international, three national and two provincial/regional events resulting in an estimated local economic impact of $29M per year;
• The City’s portion of OCRI funding would be tied to a memorandum of understanding with performance metrics and deliverables finalized following discussions about Invest Ottawa; and,
• In the interim, a short-term funding contract will be signed with OCRI.

Scenario 2: Capitalizing on Additional Investment Opportunities, 2012 and beyond

The business case methodology used to identify the best investment opportunities for the City indicates the optimal level of investment to realize the full potential of a comprehensive economic development program.  This scenario highlights the additional investment opportunities to maximize the City’s return on investment in these programs, and functions on the following assumption:

· No further additions to the base operating budget are required for the communication and performance measurement tools and the Entrepreneurship Centre beyond the level identified in 2011.

Table 2 shows the further investment opportunities beyond the current $5.538M base operating budget.

TABLE 2:

Additional Funding Opportunities to Maximize Return on Investment

$000	2011	2012	Further Investment Opportunity	New Total
Invest Ottawa (including the Ottawa-Gatineau Film & Television Office)*	$   1,550	$   2,265	$       1,100	$ 3,365
Entrepreneurship (Entrepreneurship Centre, Incubator, Regional Innovation Centre)	$     1,400	$     1,400	$      1,200	$    2,600
Major Events	$     505	$     550	$         350	$ 900
BIAs	$     110	$     110	$         100	$    210
Grants & Contributions**	$     873	$     240	$            260	$    500
Communication / Performance Measurement	$     227	$     100	$           70	$    170
Digital media ††	$        -	$        -	$         500	$    500
Economic Development Branch (Operating Budget) ***	$     873	$     873	$         220	$    1,093
Total	$   5,538	$   5,538	$       3,800	$ 9,338

* 2011 funding for Invest Ottawa will be provided to Global Marketing at OCRI under a Memorandum of Understanding (including the Ottawa-Gatineau Film & Television Office as part of Invest Ottawa).

** The Grants and Contributions budget will be assigned exclusively to Community Economic Development beginning in 2012.

*** The Economic Development Branch Operating Budget was increased by $200K in 2011 to be able to respond to unforeseen economic development opportunities such as unanticipated events and promotional tours.

†† In addition to the above Digital Media operating funding, a one-time capital investment of $1.5M in 2012 will allow the creation of a fully equipped digital media lab.

The funding opportunities in Table 2 would have the following positive impacts for the city’s residents, enterprises and visitors:

• An increased investment of $1.1M into Invest Ottawa will allow expanded programming to serve the industry sectors identified for Ottawa;
• An additional $100K into the BIA program will allow the City to enhance the matching grants program for façade improvements and murals undertaken by local businesses that ultimately improve our streetscapes;
• In order to close the gap in performance measurement and intergovernmental relations, the Economic Development Branch would use $220K for the addition of two FTEs;
• Additional investments ($1.2M) in enhanced entrepreneurship programming, the Regional Innovation Centre, and the business incubator would result in increased market research and analysis for entrepreneurs, online tools that would allow entrepreneurs to navigate various programs and services more easily, and better attraction of investment capital for those businesses;
• An additional investment of $260K into the Grants and Contributions budget would provide flexibility to the City of Ottawa to respond to economic development initiatives that are proposed by the community; and
• An additional $350K into the annual major event fund would allow the City of Ottawa to attract a further one international / two national and two provincial/regional events which would result in an estimated additional $16M in local economic impacts.

RURAL IMPLICATIONS

Continued support of Ottawa’s Countryside will assist with the promotion of Ottawa’s rural attractions as a tourist destination for both residents and visitors. Getting visitors to rural Ottawa will benefit Ottawa’s Countryside members, as well as other non-member rural businesses in the area.

The rural BIAs (Carp, Manotick and Carp Road Corridor) will benefit from the increased support/investment from the City for BIAs as well as using the GO-BIA association to learn best practices and to share experiences amongst the BIAs citywide.

CONSULTATION

Since the approval of ‘Partnerships for Prosperity’ report by Council in July 2010, staff from the Economic Development Branch have engaged the many stakeholders in both one-on-one consultations, as well as group meetings. Staff also utilized all formal forums organized by external stakeholders to gain feedback on the economic development implementation possibilities. Some of the sample consultation activities are listed below:

Organization	Topic
Algonquin College Dean Faculty of Business Dean Faculty of Media and Design Mark Hoddenbagh Director Applied Research & Innovation	Incubation Centre, Digital Media Lab, entrepreneurship sector collaborations, student internship programs
The Ottawa Network General Membership base at an economic development focused speaking engagement	Incubation Centre, entrepreneurship sector collaborations
BIA Executive Director Forum All 17 BIAs	BIA Best Practices and future programming/funding opportunities
Private Sector Firms Research In Motion Sanmina IBM Wesley Clover Nordion InMotion Knight Enterprises	Role of economic development in assisting the medium/large size firms in Ottawa
City of Toronto Various economic development staff	Learn best practices around the delivery of economic development services
Kingston Economic Development Corporation President & CEO	Learn best practices around investment attraction, entrepreneurship sector development
Tourism Leadership Council Ottawa Senators NCC Airport Authority Ottawa Tourism Ottawa Gatineau Hotel Association Ottawa Chamber of Commerce Ottawa Convention Centre	Tourism sector development projects including major events attraction
Business Advisory Committee	General economic development discussion and feedback on direction of the economic development implementation plan
Ministry of Economic Development & Trade	Entrepreneurship Centre
Ontario Media Development Corporation Film Commissioner	Film and television sector development efforts
Calgary Economic Development Film Commissioner	Film and television sector development efforts
RDÉE Ontario	Partnership opportunities on projects focused on the francophone community

COMMENTS BY THE WARD COUNCILLOR(S)

N/A

LEGAL IMPLICATIONS

The Economic Development Branch will work with staff from the City Clerk and Solicitor Department to ensure compliance with the relevant statutes and by-laws, including the Economic Development Services provisions in the Municipal Act, 2001, the Discriminating Business Practices Act and the City’s Purchasing By-law, among others, and to negotiate and enter into any contractual agreements with external stakeholders that may be required to implement the economic development strategy outlined in this report.  Aside from these matters, there are no legal implications associated with implementing the recommendations contained in this report.

RISK MANAGEMENT IMPLICATIONS

There are no risk implications.

CITY STRATEGIC PLAN

The implementation plan outlined in this report is consistent with the City’s Strategic Plan.

FINANCIAL IMPLICATIONS

Funding for the Economic Development 2011 Spending Plan is available within existing resources, as approved through the 2011 Operating Budget.

Funding requirements for the Additional Investment Opportunities outlined within the report, Scenario 2: Capitalizing on Additional Investment Opportunities, 2012 and beyond, will be subject to the Term of Council Priorities process, and approval through future-year budget processes.

TECHNOLOGY IMPLICATIONS

There are no technical implications associated with this report.

SUPPORTING DOCUMENTATION

N/A

DISPOSITION

Economic Development Branch staff will implement any direction received from Committee and Council with respect to this report.

Upon approval, staff will immediately move forward to execute the above outlined implementation plan.

Staff will report back to Finance and Economic Development Committee in Q4 2011 on the implementation of the economic development program and its progress to date.

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[1] Interview with Barry Nabatian A.A.S. B.Sc. M.Sc., principal Shore-Tanner & Associates