Economic Development Partnership Program Grants

The Economic Development Committee recommends the adoption of the following report (March 11, 1999) from the Commissioner of Economic Development, Culture and Tourism:

Purpose:

The purpose of this report is to:

(a)provide information on the results of the grant allocations under the Economic Development Partnership Program (EDP Program), as requested by Council at its meeting of November 25, 26, 27, 1998;

(b)respond to the request made by Economic Development Committee on February 12, 1999 for a report to its meeting of March 26, 1996 meeting reviewing the Economic Development Partnership Program to determine if the Riverdale Tourism Initiative can be supported in the future;

(c)recommend a course of action to manage the EDP Program in 1999; and

(d)advise Committee members of the Economic Development Division's plans to evaluate the objectives and delivery of the EDP Program in the context of the City's emerging Economic Development strategy, and report on recommended refinements to the program at the September, 1999 meeting of the Economic Development Committee.

Funding Sources, Financial Implications and Impact Statement:

The Municipal Grants Review Committee and the Budget Committee have recommended that an amount of $337,000 from the 1999 Economic Development Grants budget be allocated to the Economic Development Partnership Program. This amount is equal to the 1998 Economic Development Partnership Program funding.

This amount is subject to approval by Council in the 1999 budget process.

Recommendations:

It is recommended that:

(1)the EDP Program be available to eligible applicants across the City of Toronto;

(2)the 1999 EDP Program application contain standardized performance indicators for the purpose of evaluating program outcomes;

(3)applicants be advised, in writing, that the program will undergo a review in 1999 that will include ensuring consistency with the City's emerging economic development strategy and that any changes effecting the program in the year 2000 will be communicated to client groups prior to December 1999;

(4)Economic Development Division staff be directed to consult with previous grant recipients while undertaking the review, and other key departmental client groups to determine the most effective and equitable means of delivering the EDP Program;

(5)the Commissioner of Economic Development, Culture and Tourism be requested to report in September 1999 to the Economic Development Committee on the outcome of theconsultations and recommendations for restructuring the program; and

(6)the appropriate City Officials be authorized and directed to the necessary action to give effect thereto.

Council Reference/Background/History:

At its meeting of November 25, 26 and 27, 1998 Council directed the Chief Administrative Officer to submit a report to the Economic Development Committee on the results of grant allocations under the Economic Development Partnership Program over the past few years.

On February 12, 1999 the Economic Development Committee heard a deputation from the Riverdale Community Business Centre concerning the a tourism initiative that was funded by the Economic Development Partnership Program. At that meeting the Committee directed staff to report back on March 26, 1999 with a review of the former grant programs which were made in the past to determine if the deputants would be eligible for support in the future.

This report responds to both requests for information and has been prepared in consultation with the Chief Administrative Officer.

Comments:

The Economic Development Partnership Program was established in 1995 by the former City of Toronto to provide seed funding to facilitate the start-up or expansion of projects that would provide substantial long term economic benefits to the City. The program provides for two categories of support: one time only projects; and developmental projects that are eligible for support for a maximum of five years, with the maximum support in the fourth and fifth year set at 50% and 25% respectively of the level of support provided in the third year.

Priority was given to projects with a strong potential of becoming self sustaining within the five year time frame of the program and which involved substantive partnerships with the private sector or other levels of government. Applicants were required to submit a business plan and detailed budget demonstrating an ability to attract corporate support for the initiative.

Summary of the Results of EDP Program Grants:

Since its inception in 1995, the EDP Program has provided grants to more than 30 organizations covering a broad range of interests, including, but not restricted to: the Toronto International Film Festival Industry Centre, Toronto Dragon Boat Race, Canadian Music Week, Heritage Skills Co-op Bakery, Contact Photography Association, the Canadian Aboriginal Festival, and the Riverdale Tourism Marketing Initiative. A full list of organizations that have received funding is attached as "Appendix A" to this report.

Given the diversity of purposes for which funds were used by each organization and the diverse nature and maturity of the organizations funded, the outcomes and method of reporting results varied from recipient to recipient. While the former City of Toronto staff and Council were diligent in their efforts to evaluate each application, there were no formal performance measures in place that would provide a meaningful comparative evaluation of the results achieved.

In an effort to collect information for this report, Economic Development staff selected 13 of the previously funded programs at random and conducted telephone interviews with the staff from these organizations. Interviewees are shown on the list provided in "appendix A". While much of the information is anecdotal, the interviews confirmed that in each instance the City's broad objectives in providing the funds were met. Applicants used the funds for the purpose intended and advanced the goals of their organizations as stated in their requests for funding.

Interviewees consistently report that:

-seed funding provided by the EDP Program allowed the organization to test or launch new initiatives;

-City participation helped groups leverage additional senior government and private sector support;

-existing activities or events were expanded to reach larger audiences; and

-community partnerships were established, new community networks were developed.

It should be noted that in most instances the applicants had ongoing client relationships with the former City of Toronto Economic Development Office and the program for which grant funding was requested was aligned with the office's strategic priorities. The organizations were, for the most part, well known to the staff and the proposals were evaluated and approved in the context of their ongoing activities with the City.

The absence of standardized performance indicators for the grants program makes it difficult to provide the Committee with additional details of the outcomes of the program. Staff have identified this matter as a weakness of the program and have ensured that performance criteria will beset out in the 1999 program guidelines.

1999 Economic Development Partnership Program Delivery:

The Economic Development Division is currently undergoing a process that will lead to the development of an Economic Development Strategy for Council's consideration in the spring of 1999. While the EDP Program in it's current form is a valuable tool for the Division, it is anticipated that findings of the strategy may lead to some changes in the grant program to better support the priorities of the strategy.

Given that there are 15 applicants that are eligible for funding under the previous program guidelines, many of which have time sensitive funding requirements, staff are recommending that the 1999 EDP Program continue on the same basis as in 1998 subject to the following refinements:

(a)the program be available to applicants across the new City of Toronto;

(b)two application deadlines be set; one in April, 1999 and one in September 1999;

(c)new program funding be aligned with the key sectors that are served by the Division i.e. Medical/Biotechnology, Food Processing, Information Technology / Telecommunications / New Media and Tourism;

(d)applications include a requirement to monitor projects through standardized performance indicators dealing with matters such as, but not restricted to, number of jobs created, number of local suppliers used, funds leveraged, long term benefits of the project; and

(e)at least $50,000 of the program budget be reserved to fund new initiatives submitted by new applicants to the program.

With the 1998 guidelines in place, groups such as the Riverdale Tourism Initiative would be eligible to apply for funding in 1999, however , as in previous years the projects funded are determined by the quality of the proposal as well as the number of applications received. A copy of the 1999 application form has been attached as "Appendix B" to this report.

The EDP Program for 2000 and Beyond:

The EDP Program has been a useful economic development initiative for the former City of Toronto and every effort will be made to ensure that the program continues to support the economic development priorities of the amalgamated City of Toronto in the future.

The current staff in Economic Development have had limited experience with the EDP program thus far, however, several questions have emerged and will be answered as part of the ongoing program review in 1999, for example:

(a)What elements of the program might be revised to prove closer linkages with the ongoing sector development work being conducted by the Economic Development Division. For example, currently there are no projects being supported in the Medical/Biotechnology or New Media/Information Technology or Telecommunications Sector.

(b)Should greater emphasis be placed on funding projects that have measurable city-wide benefits, as opposed to local community economic development initiatives?

(c)What are the most appropriate performance measures for the program?

(d)Should the maximum eligibility of 5 years for each applicant be reduced to 3 years, in order to accelerate and promote self sufficiency of the organizations?

(e)Should private organizations continue to be eligible for funding under this program? Currently there are no private organizations being funded, however, under the current guidelines they would be eligible.

(f)What is the best process for evaluating applications? In the former City of Toronto, a sub- committee of the Economic Development Committee reviewed applications and made recommendations to Council. In 1998, applications were reviewed internally by staff. Should there be a process of peer review or should existing sector networks (TBI, Smart Toronto, FILC etc.) be asked to provide input and guidance?

(g)Should the program be restructured to allow ongoing funding for organizations? The EDP Program was established to provide seed monies to get projects off the ground and provide the opportunity for other revenue sources to be developed. However, there are some organizations in the program, such as the Toronto International Film Festival, Cinematheque Ontario, and the Toronto Theatre Alliance that provide pivotal activities to the City and warrant ongoing funding.

(h)What are the most appropriate application deadlines? In 1998 there was a spring and fall funding cycle, with limited resources to manage the program. It may be prudent to limit the application deadline to once per year.

(i)What are the most effective means of marketing the program city-wide?

To effectively answer these questions staff propose that consultations be conducted with Economic Development Division clients representing a wide range of sector associations as well as past and potential future applicants. The findings will be reported to the Economic Development Committee to ensure that any revisions to the program can be made in ample time for past recipients to be notified of changes and to communicate the program to organizations city-wide prior to the 2000 funding cycle.

Conclusions:

The review of the results of the Economic Development Partnership Program has confirmed that the funds provided by the City were used for their proposed purpose and the Economic Development Division believe that the program has been useful.

In the short term, for 1999, Economic Development Division staff recommend that the existing program requirements remain in effect, subject to additional reporting requirements by applicants on the results of initiative for which they have received funding. In the coming year further analysis will be conducted on the program to determine how best to align it with the City's new economic development objectives.

The Chief Administrative Officer has been consulted in the development of this report.

Contact Name:

Eva Pyatt

Manager, Sector & Strategic Partnerships

Economic Development

Telephone: 392-3378

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(A copy of Appendix A and Appendix B attached to the foregoing report was forwarded to all Members of Council with the March 29, 1999 and April 6, 1999 agenda of the Economic Development Committee and a copy thereof is on file in the office of the City Clerk.)