2003/04 – 2005/06 REVISED SERVICE PLAN Ministry of Competition, Science, and Enterprise

Strategic Context

Ministry Overview

The Ministry of Competition, Science and Enterprise is the primary provincial agency responsible for initiatives and programs dedicated to creating a strong provincial economy in British Columbia. Activities within the Ministry are focused on building a competitive business environment that gives the private sector the confidence to invest, generate opportunities and create jobs throughout British Columbia.

The Ministry's responsibilities are to:

• Develop and Implement a comprehensive Provincial Economic Strategy.
• Encourage the development of regional economies, infrastructure and services by providing cross government leadership for the implementation of the Heartlands Economic Strategy.
• Assist in creating an environment that encourages investment and job creation.
• Provide strategic leadership that will facilitate economic growth and development throughout British Columbia by fast-tracking provincial regulatory approvals for significant economic projects.
• Develop and implement a Tourism Development Strategy for British Columbia, which maximizes tourism investment throughout the province.
• Promote the enhancement and development of all season resorts and resort municipalities.
• Establish a welcoming environment for small business by advocating on behalf of small business owners and prospective small businesses.
• Market British Columbia as an investment location, and develop and enhance national and international investment and trading relationships.
• Increase the amount of venture capital available in the Province.
• Provide up to date professional analysis of British Columbia's competitive advantages and disadvantages vis-à-vis international investment and business formation for each important industry sector and all regions.

The Ministry is also responsible, through the mandate of the Minister of State for Deregulation, for the deregulation initiative to achieve the New Era commitment to cut red tape and reduce the regulatory burden on businesses and consumers by one third within three years, beginning in 2001.

The Ministry has 122 staff positions, including staff in six regions. The Ministry delivers its services and programs through three divisions, Deregulation Office, and Deputy Minister's Office:

Competitive Economic Policy Office — is responsible for the development of the Province's Economic Development Strategy and Heartlands Economic Strategy to promote economic growth and diversification of British Columbia's economic base. The division continually monitors business and economic developments affecting British Columbia and provides up to date analysis of the province's competitive advantages in every region, and in all industry sectors, to determine the best strategies for British Columbia to improve its economic performance.

In addition, the division ensures that key cross-government projects, which are significant economic drivers, or have potential for significant economic impact on the province, are managed successfully. Also, the division is responsible for international and internal trade policy.

Economic Development Division — leads the cross-government implementation of the Provincial Economic Development Strategy. The division, through its regional presence, identifies potential projects that support the Provincial Economic Development Strategy and the Heartlands Economic Strategy, uses expert business case analysis to recommend projects for fast-track designation, and monitors these projects through provincial government review and approval processes to ensure timelines are met.

The division is also the driver for expanding the tourism industry through the implementation of the Tourism Development Strategy and working to enhance and develop all season resorts and resort municipalities. The division will also work with industry to identify and fast-track tourism projects. The division supports Heartlands communities by providing local economic development agencies and small business associations with information, education and other tools to assist with small business start-ups.

Finally, the division administers the project funding for the Canada-British Columbia Infrastructure Program, and Western Economic Partnership Agreement.

Management Services Division — provides financial, human resources, records management and information systems support to the Ministry.

Deregulation Office — provides policy advice and supports the Minister of State for Deregulation's mandate to set the framework and oversee the government-wide commitment to cut red tape and the regulatory burden by one third within three years.

Deputy Minister's Office — a number of branches report directly to the Deputy Minister, including Investment Capital, British Columbia Film Commission, International Relations, and Corporate Investment and Location Service. Collectively, they position British Columbia as a preferred place for new and expanded investment. International Relations Branch plans and manages trade missions that provide the Premier and ministers with opportunities to increase British Columbia's profile in key markets. Investment Capital Branch manages tax policy programs to assist small and medium sized businesses throughout the province to gain access to equity capital for business start-up and expansion. Corporate Investment promotes international awareness of British Columbia's investment climate and provides potential investors with business location information and services.

In addition, the British Columbia Film Commission supports regional film commissions and coordinates marketing British Columbia to the film and television industry.

Planning Context

The planning context is an assessment of strengths, challenges and internal forces that can have a significant impact on the Ministry's ability to deliver results. It provides the Ministry with specific information to prepare for future actions.

Key Opportunities

• Tourism and Resorts: British Columbia has some of the most temperate and dramatic topography in the Pacific Northwest offering significant investment opportunities for the further development and enhancement of British Columbia's tourism and all-season resort industries.
• Investment Promotion: British Columbia has some of the most abundant natural resource opportunities in the world, but these alone will not attract investment even in a strong economy. Information about the changes being made to ensure British Columbia is globally competitive needs to be aggressively marketed to the investment community.
• Small Business Sector: British Columbia's small business sector comprises over 97 per cent of British Columbia's businesses and is the primary source of job creation in the province. There is broad recognition that the development of the small business sector boosts local economies, sustains healthy communities and provides diverse employment opportunities.
• 2010 Olympic and Paralympic Winter Games: the 2010 Winter Games will open up new opportunities for tourism through increased visitation and international profile. In addition, infrastructure investments leading up to the Games will create approximately 228,000 direct and indirect person years of employment, and inject billions of dollars into the provincial economy.

Key Challenges

• World and Local Events: recent global events such as the outbreak in March 2003 of Severe Acute Respiratory Syndrome (SARS), and the on-going war on terrorism, combined with regional events such as a single case of mad-cow disease in Alberta, and forest-fires in British Columbia, have combined to depress the number of visitors to the province this year.
• Economic Expansion: the effects of continued weakness in the forestry industry as a result of the ongoing softwood lumber dispute with the US, as well as poor business performance by the US and Japanese economies will contribute to British Columbia's expected GDP growth of less than two per cent in 2003.
• Strengthening Canadian Dollar: The dollar climbed as much as 20 per cent during the first 10 months of 2003. The sharp appreciation in the dollar could affect some of British Columbia's export dependent industries such as forestry and high-tech. The strengthened dollar has also exposed some uncompetitive companies that have relied on a competitive exchange rate to sell their products abroad. The appreciation of the Canadian dollar could stimulate some companies to invest in productivity improvements to counteract any further increases in the Canadian dollar.
• Productivity: a key factor to improving living standards is increasing productivity, generally measured by output per worker per hour. Productivity in Canada has traditionally lagged behind the US and the average of the industrialized countries that make up the Organization for Economic Cooperation and Development.¹ In one study by the Center for the Study of Living Standards, Canadian manufacturers' productivity has slipped to less than 70 per cent of their US competitors. Closing the productivity gap would fuel economic growth and raise British Columbia's standard of living.
• Demographics and Skill Shortages: In 2002 and early 2003, the province conducted skills shortage surveys with major employers in British Columbia. While results of the surveys indicated no general skill shortages at this time, there were some shortages identified in management occupations, professional occupations and technical, paraprofessional and skilled occupations². Employers also indicated some concern over future skills shortages due to the aging workforce, lack of post-secondary education and competition for the same workers from other jurisdictions and countries. The Ministry will continue to work with other ministries and the business community to ensure that training programs respond to employers' needs.

Risk Assessment

Risk assessment addresses both the internal and external risks the Ministry might face over the next three years in attempting to meet its objectives. The following factors will influence the degree to which the Ministry achieves its objectives:

• Commodity price volatility.
• World economic growth, especially the growth of the US economy.
• Economic fundamentals such as interest rates, stock market performance, exchange rates etc.
• First Nations issues and land access restrictions.
• Concerns regarding the implementation of the Kyoto Protocol.

In order to manage the uncertainty resulting from changes in the external economic factors facing British Columbia, the Ministry will become the British Columbia competitiveness expert. The Ministry is undertaking SWOT (strengths, weaknesses, opportunities, and threats) analyses of the province, each region and key sectors. The purpose of the SWOTs is to keep a finger on the pulse of changing economic and business conditions to identify factors and major trends to be considered when developing effective strategies for the province, regions and sectors.

Furthermore, the Ministry will lead economic development initiatives in the following sectors: tourism (including resorts), science and technology (through Leading Edge British Columbia), film industry, small business and venture capital to ensure British Columbia has a competitive environment that encourages investment and job creation.

New Directions and Major Changes
from the Previous Plan

The Ministry refocused its activities between April and July 2003 resulting in significant changes to both the Ministry's operational structure and its goals and objectives.

There have been two key shifts in the Ministry's mandate: the development and implementation of the Provincial Economic Strategy and the cross-government leadership of the Heartlands Economic Strategy. The Provincial Economic Strategy will create and drive the economic vision for the province and will establish a framework within which government polices and initiatives relating to economic development can be assessed and evaluated. The Heartlands Economic Strategy will focus on and drive the economic expansion and diversification of British Columbia's regional economies. Both strategies are living documents that will be reassessed and updated periodically.

Refocusing the Ministry's mandate has also resulted in changes to the Ministry's goals. The table below identifies former goals and current goals.

Former Goals	Current Goals
• Establish a competitive investment climate • Efficient and effective management and regulation	• Improving our competitive position in the national and international economy
• Promote economic growth	• Increasing economic development throughout British Columbia, particularly in the Heartlands
• Innovation, science and technology transfer	• Marketing British Columbia as a preferred place to live, visit, invest and do business

The new goals put greater emphasis on improving British Columbia's competitiveness relative to key competing jurisdictions and fostering economic growth in all regions and sectors. They also reflect an increased focus on marketing and promoting British Columbia's advantages and opportunities.

Two goals that appeared in the previous Service Plan have been removed from the current plan. The goal for innovation, science and technology transfer has been dropped. Instead, the arm's-length Leading Edge British Columbia society has assumed responsibility for science and technology issues and will develop its own Service Plan. Also, the goal for efficient and effective management and regulation has been dropped as its corresponding objectives have either been incorporated within other goals or have been largely completed. For example, the objective of cutting regulations by one-third in three years is a competitiveness issue and is retained under the goal of improving our competitive position. The former objective relating to moving the Ministry to a shared services model is now complete as implementation of the government's shared services model is well underway in the Ministry of Management Services.

The Ministry's refocused mandate has also resulted in the establishment of new program areas. In addition to the development of the Province's Economic Strategy, and corporate leadership of the implementation of the Heartlands Economic Strategy, the Ministry will lead the development and implementation of a Tourism Development Strategy to maximize the advantages and expand the opportunities of British Columbia's second largest industry. As well, the Ministry has been tasked with facilitating the development and expansion of all-season resorts and resort municipalities.

Finally, the Ministry has established a new project fast-track process. This will be a key tool for the Ministry to facilitate regional growth and diversification. Through this process, the Ministry will identify regional economic projects, make recommendations on projects selected for fast-track designation and make sure all approved projects proceed through government's regulatory approval processes in a timely fashion.

Science and technology remain a vital component of economic development and the Ministry has established Leading Edge British Columbia, an arm's length organization, which has assumed the Ministry's science and technology responsibilities (see Appendix I). The principal mandate of Leading Edge British Columbia is to enhance investment, partnerships, alliances and recruitment in British Columbia's technology sectors. This will be achieved through marketing, branding, and investment attraction programs that promote British Columbia's competitive business environment for technology enterprise and specific technology opportunities available in British Columbia to select audiences outside the province. The society will work with relevant stakeholders to create and implement a vision for provincial science and technology marketing policy and funding. In the third quarter of 2003/04, the society will review current initiatives and funding commitments and the provincial agencies that deliver these services. The result will be a broad, inclusive, industry-supported strategy for science and technology in British Columbia.

The Ministry has redeployed a number of functions that are no longer core to achieving the Ministry's mandate. The Immigrant Investor program was consolidated in the Ministry of Community, Aboriginal and Women's Services. Following the Ministry's completion of the government-wide fee and licenses review, responsibilities for ongoing management of requests for fee changes has been transferred to the Ministry of Finance. The loan portfolio was transferred to the Ministry of Provincial Revenue. Finally, responsibility for development and implementation of the youth employment strategy was transferred to the Ministry of Skills, Development and Labour.

As a result of these program changes, the Ministry's FTE count is 122, including staff in six regional offices in Cranbrook, Kamloops, Nanaimo, Prince George, Smithers and Williams Lake. The Ministry transferred in 15 FTEs from the Ministry of Sustainable Resource Management to undertake tourism functions, including the development of the tourism strategy, and all seasons resort strategy.

The Ministry's estimated operating budget is $114.7 million. This is up from the 2002/03 budget of $51.3 million. The increase is largely attributable to the Province's contributions to fund the Vancouver Convention and Exhibition Centre project of $67 million, $62 million, and $69.5 million in each fiscal year 2003/04 to 2005/06 (see Appendix I).

Ministry Vision, Mission and Core Values

1. Vision

The Ministry of Competition, Science and Enterprise envisions a vibrant economy where British Columbians have access to a diversity of job opportunities throughout the province, and where investors have confidence in the province's economic growth and prosperity.

2. Mission

The Ministry of Competition, Science and Enterprise promotes strategic leadership in government to create a strong, prosperous and diverse economy in all regions.

3. Core Values

The following values define the Ministry's management style and govern the way it makes decisions. They guide Ministry staff in interacting with each other, other government agencies, the private sector and other stakeholders.

CORE VALUES
Competitiveness	The Ministry works towards making British Columbia the most attractive investment location in North America.
Results-Based	The Ministry is a results-based organization that measures performance at both the corporate and individual level.
Shared Responsibility	The Ministry is committed to working with other ministries and agencies to develop and implement actions to bring growth and prosperity to British Columbia.
Accountability	The Ministry is accountable to government and the public and strives to ensure its activities deliver the targets outlined in this Service Plan.
Efficiency	The Ministry delivers its programs in the most efficient manner to enhance British Columbia's competitiveness as an investment location.
Continuous Improvement	The Ministry is committed to developing new and better approaches.
Professionalism	The Ministry is committed to maintaining the highest standards of innovation, quality, teamwork, and developing an entrepreneurial attitude in the professional public service.
Responsiveness	The Ministry strives to respond to the needs of its stakeholders in a timely and effective manner.