Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Printed by order of the House of Assembly
Submitted by The Honourable Peter J. Christie Minister of Finance
Province of Nova Scotia © Crown copyright, Province of Crown Corporation Business Plans Nova Scotia, 2004 Crown corporation business plans are Designed and published by printed under authority of Section 73 of the Communications Nova Scotia Provincial Finance Act:
ISBN: 0-88871-796-2 73 Commencing April 1, 1997, a crown corporation shall annually This document is available on the Internet (a) submit to the House of Assembly for at http://www.gov.ns.ca/tpb/publications approval during consideration of the Estimates its business plan and any proposed public financing; and
(b) table in the House of Assembly audited financial statements for the preceding fiscal year
The public presentation, annually, of Crown corporation business plans will increase the accountability to the House of Assembly of organizations generally accepted to be in the public sector but outside the direct control of government. Business plans define key elements of Crown corporations such as their mission, strategic goals, and core functions as well as give indication of performance, priorities, outcome measures, and budgets.
Organizations included in this volume are designated as Crown corporations by their enabling legislation, by Order in Council, or by application of the criteria established under Section 70 (Crown Corporations) of the Provincial Finance Act.
The approval of business plans as required by clause (a) will be sought through the Estimates Resolutions. Compliance with clause (b) will be achieved throughout the fiscal year as audited financial statements become available. Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Table of Contents Art Gallery of Nova Scotia...... 5 Halifax-Dartmouth Bridge Commission ...... 23 InNOVAcorp ...... 37 Nova Scotia Business Incorporated ...... 51 Nova Scotia Crop and Livestock Insurance Commission ...... 79 Nova Scotia Farm Loan Board...... 87 Nova Scotia Film Development Corporation ...... 103 Nova Scotia Fisheries and Aquaculture Loan Board ...... 121 Nova Scotia Gaming Corporation...... 133 Nova Scotia Government Fund Limited ...... 149 Nova Scotia Harness Racing Incorporated...... 153 Nova Scotia Housing Development Corporation...... 161 Nova Scotia Liquor Corporation...... 173 Nova Scotia Municipal Finance Corporation...... 191 Nova Scotia Power Finance Corporation...... 205 Rockingham Terminal Incorporated ...... 211 Sydney Environmental Resources Ltd./Sydney Steel Corp...... 213 Trade Centre Limited...... 225 Waterfront Development Corporation Limited...... 239 Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Art Gallery of Nova Scotia Business Plan 2004–2005 Table of Contents Mission ...... 7 Planning Context ...... 7 Strategic Goals ...... 7 Core Business Areas ...... 8 Priorities for 2004–2005 ...... 9 Budget Context ...... 14 Outcomes and Performance Measures ...... 16
Crown Corporation Art Gallery of Nova Scotia Business Plans
Mission Strategic Goals • Implement the recommendations and To bring awareness of the arts of the actions of the AGNS strategic plan. world to Nova Scotia while promoting awareness of the art and scholarship • Attain a balanced operating budget and of Nova Scotia to the world. aspire to create a surplus that can be used to grow the permanent collections.
• Make significant landmark acquisitions to build the perceived value of the Planning Context AGNS collection as the principal art collection of Atlantic Canada. The Art Gallery of Nova Scotia (AGNS) is the principal art museum of the province of • Attract, create, or host important major Nova Scotia, and the largest and most exhibitions of international, national, significant in Atlantic Canada. It serves the and regional art that are recognized to province and the people of Nova Scotia be unique and the most significant through the accumulation, creation, and offered in Atlantic Canada. dissemination of knowledge through the • Improve the quality of art information arts. Distinct from other related public arts offered to visitors and users of AGNS. institutions, the AGNS has the responsibility to acquire, maintain, conserve, research, • Increase the numbers of persons publish, and make accessible the Crown’s attending the AGNS by 25 per cent. art collection in trust on behalf of the people • Increase awareness of the quality of AGNS of Nova Scotia. The principal activities of programs through marketing, public the AGNS are the acquisition, preservation, relations, and website improvements. and research of arts collections; the creation • Improve the environmental conditions of knowledge through research; and the safeguarding the artworks in our care. dissemination of these resources through exhibitions, publications, public lectures, • Increase the profitability of AGNS presentations, and education programs. It ancillary operations—gift gallery, facility assists the people of Nova Scotia and rental, and cafe—by exploring cost researchers internationally by maintaining reductions and increasing revenue outstanding publicly accessible study potential. centres, archives, libraries, records, and resources pertaining to the visual arts. 7 Art Gallery of Nova Scotia
Core Business 4. Conservation and Care • to ensure that the collection belonging to Areas the Province of Nova Scotia is preserved and maintained in an environment that 1. Accumulation of meets museum standards, while Knowledge in the Arts conducting conservation and restoration • to acquire artworks for the permanent treatments using accepted practices of collection consistent with the mandate research, examination, analysis, and of the acquisition policy documentation
• to maintain related library, film, and video and resource support materials, 5. Lifelong Learning along with institutional archival records • to provide excellent art education pertaining to collections, exhibitions, programs for learners of all ages by and institutional history working in partnership with individuals
• to ensure proper management of the and community groups, schools, collection by documentation, teachers, and artists maintenance of records, and research 6. Auxiliary Services
2. Creation of • to provide auxiliary services that Knowledge in the Arts benefit visitors and members while
• to provide support for individuals to increasing funding for the gallery— conduct research in the arts: staff, membership and volunteer programs, students, interns, researchers, volunteers, Art Sales and Rental, Gallery Shop, members, docents, and visitors facility rental, and Cheapside Café
3. Dissemination of 7. Administration and Knowledge in the Arts Financial Management
• to make accessible to the public art • to maintain personnel and systems to collections, special exhibitions, support the goals of the AGNS publications, lectures, films, and events and to maintain accessible library, archives, and study materials
• to market awareness of these services to 8 increase audiences served
Crown Corporation Art Gallery of Nova Scotia Business Plans
• Assess the library collections and create Priorities for an action plan to enhance holdings 2004–2005 pertinent to the collection and major program directions of AGNS. 1. Accumulation of Knowledge in the Arts 2. Creation of Knowledge in the Arts • Seek a major international acquisition that inspires audiences in Atlantic • Provide support for individuals to Canada. conduct research in the arts: staff, students, interns, researchers, volunteers, • Add diversity and strength to its members, docents, and visitors. permanent collections via donations and targeted purchases, as per • Concentrate research time on priorities identified by the collections enhancing records and knowledge assessment document. concerning principal permanent and long-term displays, key artists, and key • Seek contemporary art transfers from masterworks in the AGNS collection. the Canada Council Art Bank collection to complement the gifts • Focus docent and volunteer research made from Art Bank in 2003–2004. upon key long-term displays.
• Acquire artworks to complement • Strive to add new junior researchers primary collections such as The Art of through internships and work-study Nova Scotia and Art of Atlantic programs. Canada, Canadian Historical, and • Enter and/or update location data in Canadian Contemporary. Collection Inventory. • Attract senior artists to gift to AGNS from • Clean up and update data from iO to region, nationally and internationally. CHIN to insure the integrity of the data, • Begin the process of acquiring works to including consistency of format. represent the international artists • Produce digital imaging scans of the resident in Cape Breton. collections and transfer these images to • Pursue complementing international CHIN for collection records. acquisitions via donations.
9 Art Gallery of Nova Scotia
3. Dissemination Directors Organization, the Association of Knowledge in the Arts of Art Historians of Atlantic Canada, and the Speaker of the House event for • Increase audiences at AGNS by 25 per Atlantic Canada Members of Parliament cent. • Circulate a nationally touring • Improve key permanent and long-term exhibition of the art of Alex Colville, displays by adding interpretation with a national marketing campaign. panels and audio-guides. • Concentrate our efforts, budgets, and • Provide more interpreters in the gallery resources upon major exhibitions to improve visitor satisfaction, unique to Atlantic Canada. The encouraging growth in attendance highlights will be from new audiences. – CATS: the exhibition • Create collection focus exhibitions and publications featuring collection – Richard Serra
strengths, new collections scholarship, – Gary Hill and interpretation. – Masters of the Sea, in conjunction • Refurbish galleries to enhance visitor with Maritime Museum of the satisfaction. Atlantic in recognition of Tall Ships
• Seek a new site for the library, archives, – Sobey Art Award 2004 and resource centre functions. – Rodin: A Magnificent Obsession • Implement the enhanced collections database, iO, which will greatly expand 4. Conservation and Care the AGNS’s current limited capability for collections and records management. • Remove fluorescent lighting from First Nations Galleries, to be replaced by • Complete the site inventory of art works incandescent. in the AGNS permanent collection, as well as in the NSCAD, study, and loan • Replace lighting systems in third floor collections. and first floor by seeking capital grant to better protect and display works in • Attract important regional, national and the galleries. international groups to AGNS to hold meetings, symposia, and conferences. In • Ensure as priority, that key works 2004–2005, AGNS will host major needed for permanent displays are gatherings by the Canada Council for ready for public display. 10 the Arts, the Canadian Art Museum Crown Corporation Art Gallery of Nova Scotia Business Plans
• Continue work on paintings by Frances and teacher/student resource material Bannerman Jones for an exhibition of on the website. the artist’s work. • Evaluate the docent program. • Carry out preventive measures and • Research, develop, and deliver a 30- conservation treatments as required. hour credit art education course to • Investigate new technologies and early childhood educators; design and materials as they relate to the field of deliver a train-the-trainer art education fine art conservation. course at AGNS for educators working with children in their early years that is • Cover windows, remove excessive doors being funded externally. in exhibition galleries. • Continue to develop the in-gallery ECE 5. Lifelong Learning program and art education kits to be made available as a model for early • Provide excellent art education childhood educators regionally and programs for learners of all ages by nationally. working in partnership with individuals and community groups, schools, • Develop partnerships with ECE teachers, and artists. institutions and funding organizations.
• Create interpretation to assist visitors in • Develop AGNS outreach programs with their appreciation of major permanent a focus on youth with special challenges.
collection display. • Grow the numbers of persons served by • Make information and educational public program classes by ensuring interpretative material accessible via that participation is priced for cost- AGNS website. recovery so that more sections can be offered. • Create audio-tour programs for major continuing displays and major • Host a series of lectures for adults; offer exhibitions. adult studio workshops; and expand programs to new audiences; all of • Review, revise, and expand the AGNS which will be based on cost recovery Visually Yours school program, focusing on adding value to the existing • Integrate AGNS education services onto programs for school groups, teachers, the website.
and community educators and • Establish a teen council to advise AGNS incorporate school program information concerning youth issues and the AGNS. The council will promote teen volunteers 11 Art Gallery of Nova Scotia
and increased visitation and involvement • Stabilize the sponsorship program by with AGNS by youth audiences. targeting opportunities for continuing annual sponsorships for repeat • Publish a collaborative arts education functions. Enlist ongoing commitments handbook for children based on the from named gallery sponsors such as permanent collection and core Royal Bank, Scotiabank Aliant, Craig programming ideas. Gallery, Windsor Foundation Lecture Theatre, Laufer, and so forth. 6. Auxiliary Services Encourage each to identify one • Increase visitor satisfaction by continual program function and annually fund improvements to visitor services. the same objective for a predictable • Seek to have the content, philosophy, repeating level of sponsorship. and values of the AGNS accurately • Seek named sponsors for key public reflected by the products and programs programs: Thursday lectures, Sunday of the Gift Gallery and Art Sales and programs, children’s art classes, and so Rental. forth
• Seek means to increase volunteerism. • Increase earned revenue from self- • Showcase Nova Scotia in all areas of generated sources: admissions, profit the AGNS operation: Nova Scotia centres, grant agencies, sponsorships— products in use at our cafe, gift shop, private and corporate—by dedication receptions, and catering; Nova Scotia to changes and actions designed to performers and music at events. improve profitability. • Undertake a revision of the 7. Administration and organization chart in recognition of Financial Management changed personnel numbers and shifting responsibilities, increasing staff • Improve financial reporting and harmony and efficiency. decision making by developing more useful forecasting tools and financial • Dramatically increase revenues and management systems. audience numbers through focusing resources on major exhibition projects, • Develop audience survey capabilities invigorated marketing, increased and forecasting methodologies to help public perception of the quality of in the decision-making process to AGNS programs. assess the feasibility of major exhibitions and programs. 12 Crown Corporation Art Gallery of Nova Scotia Business Plans
• Contribute to the growth of tourism in the province by partnering with area organizations to create larger, multi- venue projects drawing additional media interest and promoting the idea of these as major events and thereby a major destination.
• Reduce costs of publications and associated mailings; streamline the proliferation of small printed publications and mailers by consolidating them within one larger more cost-effective solution.
• Continue to revise and upgrade electronic systems; new phone system for visitor information.
• Invest time and resources to create a digital workplace served through the website and Internet. Strengthen and increase the usefulness of the website as an information tool to disseminate information to members and visitors, archive our activities and services. These will bring cost savings while increasing service and effectiveness of marketing objectives.
• Create a cash-flow monitoring system to track forecast revenues and costs.
13 Art Gallery of Nova Scotia
Budget Context
Art Gallery of Nova Scotia Operating Budget Fiscal Year 2004–2005
REVENUE Estimate Forecast Estimate 2003–2004 2003–2004 2004–2005 ($) ($) ($)
Provincial Funding Allotment 1,310,000 1,173,800 1,180,000 1,310,000 1,283,800 1,180,000
Forecast Revenue Admissions 130,000 148,800 150,000
Programming Recoveries 70,000 89,000 70,000
Membership 55,000 65,900 70,000
Advertising 10,000 2,800 8,000
Cost Centres - Rent 45,000 45,000 45,000
Rental Space Recoveries 35,000 33,700 35,000
Sobey Art Award – 20,000 30,000 Interest 2,000 1,700 2,000 Grants 145,000 145,400 200,000 Salary Recoup - Shop 74,000 74,300 74,000 Donations/Miscellaneous Income 30,000 43,200 30,000 596,000 669,800 714,000 Anticipated Fund Raising Direct Mail/Major Gifts 75,000 19,600 25,000
Artsmarts – 82,700 110,000
Early Childhood Education – 30,900 30,000
Yarmouth Grants & Donations 61,000 – 10,000 Special Events 60,000 11,500 30,000 Business Development 200,000 165,200 200,000 Total 396,000 309,900 405,000
Projected Revenue 2,302,000 2,263,500 2,299,000 14 Crown Corporation Art Gallery of Nova Scotia Business Plans
EXPENDITURES Estimate Forecast Estimate 2003–2004 2003–2004 2004–2005 ($) ($) (cont.) ($) Salaries and Benefits 930,000 910,000 985,000 Building Operations/Administration Utilities 250,000 210,000 210,000 Security/Interpreters 185,000 201,000 185,000 Climate Control-HVAC 80,000 125,000 125,000 TPW-Gallery South 123,000 – – Yarmouth Gallery 205,000 85,800 50,000 Bldg Maintenance & Cleaning 50,000 128,000 90,000 Insurance 45,000 61,000 61,000 Elevator Maintenance 15,000 12,000 12,000 Stationery, Postage 53,000 44,000 42,000 Admin Promotional 4,000 3,800 2,000 Telephone 31,000 25,000 25,000 Travel 35,000 33,000 33,000 Professional Fees 20,000 20,000 20,000 Equipment Leases & Maintenance 20,000 21,300 20,000 Memberships—Professional 8,000 5,000 6,000 Delivery & Shipping 2,000 700 1,000 Technology 10,000 8,000 10,000 Staff Development & Training 7,000 1,000 5,000 Bank/Visa Charges 4,000 4,800 5,000 Miscellaneous 3,000 1,300 1,500 Total 1,150,000 990,700 903,500 Programming Exhibitions 368,000 430,000 252,200 Education 80,000 90,000 79,500 McConnell Artsmarts – 85,000 110,000 Sobey Art Award – 35,000 30,000 Early Childhood Education – 30,900 30,000 Permanent Collection 5,000 18,000 10,000 Vehicle 7,000 5,500 5,000 Collection Management 5,000 200 4,500 Conservation Lab 5,000 3,000 4,500 Workshop Supplies 10,000 1,200 7,000 Total 480,000 698,800 532,700 Development Development 50,000 74,000 40,000 Communications Communications & Marketing 80,000 95,000 102,500 TOTAL EXPENSES 2,690,000 2,768,500 2,563,700 Net Surplus/Net Loss (388,000) (505,000) (264,700) Transfer from Other Funds Endowment Contribution 215,000 215,000 215,000 Special Endowment Transfer 250,000 Phase II Contribution 123,000 – – Gallery Shop 50,000 40,000 50,000 Total 388,000 505,000 265,000 15 SURPLUS/DEFICIT – – 300 16
Outcomes and Performance Measures
Core Business Area 1 Accumulation of Knowledge
Outcome Measure Target Strategies to Achieve
Increase in major Number of works collected 10% • Board assistance—one-on-one meetings with donors international acquisitions
Core Business Area 2 Creation of Knowledge
Outcome Measure Target Strategies to Achieve
Critical information service Use by researchers, teachers, artists, members 10% • Seek donors to provide books, journals, periodicals Crown Corporation Business Plans our Colville exhibition with national marketing campaign Apply for funding from national granting agency Mount exhibitions that have wide appeal Provide interpreters in exhibition areas T Collaborate with renowned galleries nationally and internationally to lend major exhibitions to AGNS Strategies to Achieve • Strategies to Achieve • • • • y arget arget T First and third floors, Galler North T 25% 6 e vation and Car Conser Dissemination of Knowledge Measure Number of world-class exhibitions presented New lighting system Measure Number of individuals Core Business Area 4 Core Business Area 3 Outcome Outcome Improved lighting More major exhibitions Increased audiences 17 18
Core Business Area 5 Lifelong Learning—Interpretation
Outcome Measure Target Strategies to Achieve
Increased knowledge of Written and oral feedback from visitors Increase number • Design and produce written guides available in gallery for various audiences permanent collection of visitors and (e.g. family guide, adult guides) and special exhibitions satisfaction of their visit
Richer and deeper Increased number of visitors 15% increase of • Design and produce audio guide script/material for permanent collection understanding and visitors to website and special exhibitions appreciation of the arts and the role of the gallery
Ability to make connections Funds generated by rental of audio guides • Apply for grants for implementation of website material on Art of Atlantic Canada between art historical movements and the collection—visitors will have greater choice in how they access information about the collection (e.g., audio guides, written materials)
Improved services to Number of hits on the website • Design and produce website on permanent collection, including interactive auditory and visual learners materials for students and educational resource materials for educators
Broadened local, national, • Continue with implementation of interpretive team in the various galleries and internal audience through use of the Internet Crown Corporation Business Plans y basis y y and post-secondar y ough Secondar Design and implement tours for alternative education groups (e.g., home schoolers) Design website material focused on the Art of Atlantic Canada students as well specialized tours Expand website to highlight all education programs being offered at AGNS Revise and expand art education kits made available throughout the province Provide hands-on studio workshops for Early Childhood Educators on a cost-recover Continue to integrate interpretive team into training of docents Continue to use interpretive team for tours with secondar Establish a homework hotline Design and implement further school tours studio workshops for special upcoming exhibitions (e.g., Rodin) Offer special evening tours for teachers prior to exhibitions Strategies to Achieve eschool thr • • • • • • • • • • , , regionally vices arget T Increase communication with the Department of Education Greater visibility locally and nationally Increase number of school visits Increase number of teacher workshops including in- ser ogramming for Students, Pr Lifelong Learning—Pr ritten and oral feedback from docents Number of requests for ECE art education kits W Measure Number of school visits in comparison to previous years Evaluation response forms completed by teachers and students y young ces offered y students Core Business Area 5 Outcome Deeper understanding and appreciation of the arts Better communication to students/educators about variety of resour by AGNS More relevant programming for preschool through secondar audience Introduction to the arts/art appreciation to ver Greater involvement with students/teachers/, boards of education, and Department of Education 19 Further develop means to access new audiences Further develop various lines of communication to publicize programs and special events Continue to provide Thursday evening talks and Sunday afternoon films/lectures/tours Offer more adult studio workshops Strategies to Achieve • • • • arget T Meet requests for studio workshops by adults Increased visitation by adults/lifelong learners Increase range of opportunities for visitors ogramming Lifelong Learning—Public Pr ritten and oral feedback Numbers of registrants for classes Measure Number of participants attending lectures and special workshops W y y has Core Business Area 5 Outcome Greater investment of public into their provincial galler Encouragement of lifelong learning in the community Greater understanding of important role galler 20 Knowledge of permanent collection and special exhibitions will increase Crown Corporation Business Plans Continue with established studio workshops youth and young adults mental illness; homeless youth; IWK art initiatives Further develop relationships with groups/institutions working teens to help access needs and programming possibilities Develop teen council with first initiatives presented this summer and fall Begin arts education handbook based on programs already established Strategies to Achieve • • • • each arget T Increase visitation by young people Increase links with community through partnerships Lifelong Learning—Community Access and Outr ritten and oral feedback Increased partnership programs Measure W eens offered opportunities Core Business Area 5 Outcome T for leadership and input in planning (e.g., employability skills, life skills) Provide supportive informal learning environment for young people with special challenges Increase range of visitation Greater visibility of AGNS as agency contributing for the good of the community 21 chase software that will provide required timely reports vey and have visitors members complete y more crafts that are produced by Nova Scotian craftspeople Actively recruit for volunteers at AGNS gatherings and external functions Assist new committee in developing methods for securing sponsors Carr Partner with other tourist attractions to provide joint projects/programs Develop/pur Develop sur Combine various publications, reduce amount of information sent out to members, provide more information in electronic form Strategies to Achieve Strategies to Achieve • • • • • • • arget arget T T 25% 25% 5% 5% New software 50% response 10% vices y Ser Auxiliar Administration and Finance vey New products produced Increase in tourists Sur Measure Measure Saved dollars Number of new volunteers Funding secured Accurate, timely financial reports y products Core Business Area 6 Core Business Area 7 Outcome Outcome Showcase Nova Scotia in galler Contribute to tourism growth Increased number of volunteers Stabilized, successful sponsorship program Audience assessment Improved forecasting tools 22 Decrease costs of publications/mailing Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Halifax-Dartmouth Bridge Commission Business Plan 2004–2005 Table of Contents Mission ...... 25 Planning Context ...... 25 Strategic Goals ...... 27 Core Business Areas ...... 28 Priorities for 2004–2005 ...... 29 Budget Context ...... 31 Outcomes and Performance Measures ...... 32 Halifax-Dartmouth Bridge Commission Crown Corporation Business Plans
The MacKay Bridge resurfacing and Mission waterproofing completed in September 2001 was another large project for the To provide safe, convenient, commission. The purpose of a project of this and reliable passage for our calibre is to maintain the integrity and patrons at an appropriate cost. safety of the bridge structure.
During 2003, the Macdonald and MacKay bridges carried approximately 31.8 million Mandate vehicles, from which approximately $23 The Halifax-Dartmouth Bridge Commission million in revenue was generated. On a per (the commission) was created in 1950 by a capita basis, the Macdonald and MacKay statute of the Province of Nova Scotia. With bridges continue to be among the most the approval of the Governor in Council, frequently used toll bridges in North the commission has the power to construct, America. maintain, and operate bridges and the From a fiscal management perspective, the necessary approaches across Halifax commission continues to achieve financial Harbour and the Northwest Arm, or either stability and meet its obligations to of them. The commission is a self- bondholders. In 1997, the commission supporting entity, which operates two toll issued a $100-million Toll Revenue Bond bridges, the Angus L. Macdonald and the A. Series 1 (maturing December 4, 2007) at an Murray MacKay. annual interest rate of 5.95 per cent. At the same time, a $30-million line of credit ($23 million outstanding) was arranged with the Planning Context province. The Toll Revenue Bond Series 1 is In recent years, the commission has secured by an assignment of the undertaken projects that have increased commission’s revenues and is not capacity, improved traffic flow, and guaranteed by the Province of Nova Scotia. expanded healthy transportation These bonds are rated AA (low) by alternatives. Among these projects are the Dominion Bond Rating Service Limited and addition of the third lane, sidewalk, and A+ by Standard & Poor’s Ratings Group. bicycle lanes on the Macdonald Bridge, the construction of the Barrington Street ramp, Strengths and the introduction of electronic toll The commission’s strengths are identified as collection (MACPASS). experience with, and knowledge of, the maintenance and operation of two 25 Halifax-Dartmouth Bridge Commission
suspension bridges, as well as electronic toll replace the wearing surface on the collection and other intelligent approaches in 2004. This involves replacing transportation systems, such as variable 148 metres (486 feet) on the Halifax side message signs and dynamic weather stations. 436 metres (1432 feet) on the Dartmouth In addition, the commission’s significant and side of the Macdonald Bridge. The wearing growing traffic volumes equate to overall surface replacement program will revenue flow. These collective attributes allow commence in May, and the completion is the commission to successfully achieve its expected by Labour Day. The schedule for mission, which is to provide safe, convenient, the replacement of the wearing surface on and reliable passage for our patrons at an the approaches will focus on minimizing appropriate cost. disruption to the travelling public and other stakeholders. Any loss of revenue is not The third lane on the Macdonald Bridge expected to be material, as it is anticipated and MACPASS are visible contributors to the that traffic will shift to the MacKay Bridge efficient handling of traffic on the bridges. during the replacement program. MACPASS usage now represents approximately 43 per cent of all traffic volume on both bridges. Opportunities As the commission focuses on continuous Risks improvement and the fulfilment of its mission, ongoing opportunities are In 2001, the commission identified that the identified through MACPASS and the wearing surface installed on the Angus L. maintenance program. Macdonald Bridge during the third lane reconstruction project was not performing MACPASS has continually offered the as anticipated. The material used for the opportunity for the commission to convert wearing surface has demonstrated cash and token users to a more efficient toll waterproofing failure, and debonding from payment method, which reduces toll plaza the steel deck on the approaches has congestion. Currently, MACPASS represents occurred. This premature failure was 43 per cent of total traffic volume. The investigated, and short-term repairs have commission’s cost-effective marketing been conducted during the past three years. programs contribute to the growing success The commission is confident that the and increase in MACPASS usage. The results Macdonald Bridge deck is not compromised of a toll payment survey conducted in 2003 as a result of this problem. will assist with the direction of the commission’s future marketing programs. In order to protect the integrity and safety of Also, further promotion around online 26 the structure, the commission has decided to Crown Corporation Halifax-Dartmouth Bridge Commission Business Plans
access to MACPASS enrolment and account Increased traffic due to economic activity information will continue to enhance can be considered as both an opportunity customer satisfaction as it relates to for the commission in terms of increased MACPASS. revenue and a threat in terms of increased congestion. At the same time, the From a maintenance perspective, the commission’s toll revenue is reliant upon commission’s purchase of a main cable bridge travel; thus, an economic slowdown access platform (cable crawler) in 2003 could have an impact on the commission’s creates long-term maintenance cash flow. opportunities. The maintenance of the bridge cables involves the removal of existing paint, inspection, and repainting of the cables, which both protects and Strategic Goals increases their longevity. Essentially, the In order to carry out its mission, the cable crawler is a mobile work platform, commission has defined the following goals which can be utilized interchangeably at as strategic: both bridges for improved and safe access • Maintain public and employee safety for staff and engineers to virtually all areas through ongoing review and of the bridge cables. implementation of the commission’s The commission has a vested interest in policies, operations, and initiatives. contributing to efficient regional • Maintain the bridges and approaches transportation systems and initiatives in superior condition through a within Halifax Regional Municipality, and proactive maintenance program. with this, the commission is open to exploring opportunities to both expand its • Maintain convenient and reliable mandate and demonstrate its expertise in passage by working with stakeholders the area of electronic toll collection. to identify access and egress improvements, which will assist future Threats capacity requirements.
Because the commission is an integral • Continue to market electronic toll component of the regional transportation collection (MACPASS) in order to system, the commission plans to work with decrease traffic congestion and Halifax Regional Municipality on a accommodate future traffic growth. capacity study to further identify potential • Ensure the commission’s financial contributions to transportation stability through efficient financial improvements. planning and management. 27 Halifax-Dartmouth Bridge Commission
To ensure the safety of bridge patrons, the Core Business commission utilizes roadway ice detection Areas systems and maintains 24-hour-a-day maintenance staffing during the winter As identified in our mission, “to provide months, as bridges develop ice faster than safe, convenient and reliable passage for other roadways. This allows for prompt our patrons at an appropriate cost,” safety, attention to ice and snow removal on the maintenance, efficient transportation, and structures and approaches. fiscal management continue to be the focus of the commission’s core business. 2. Maintenance
1. Safety A detailed and attentive maintenance program is essential to ensuring the safety The safety of the travelling public is of the travelling public. The commission’s protected through a number of ongoing maintenance programs and initiatives programs and initiatives, including, but include, but are not limited to the following. not limited to the following: The commission’s staff and consulting Continuous monitoring of bridge traffic engineers conduct ongoing monitoring and through video surveillance, patrolling of thorough annual inspections of the bridges the bridges and approaches, and providing and approaches to identify immediate and prompt response to collisions are important long-term requirements. These requirements tasks that are the responsibility of the Corps are incorporated into the commission’s of Commissionaires (commissionaires). maintenance schedule and capital The commissionaires conduct speed improvements program. enforcement on the bridges to reduce vehicle In 2003, for the tenth consecutive year, the speed. Mobile radar units have been utilized commission conducted a major concrete in patrol vehicles at both bridges since 2002. repair program. The commission currently These units enable staff to be more proactive commits approximately $200,000 to this with speed enforcement during bridge annual program. Also in 2003, the patrols. In addition, the commissionaires commission gave the cable crawler a trial. conduct monthly speed surveys to determine This platform will allow for a much more the impact that enforcement has on vehicle thorough and cost-efficient inspection and speed. Collision summaries are also painting of the main cables. produced quarterly to determine if the collision ratio is reduced as a result of speed enforcement and/or other factors. 28 Crown Corporation Halifax-Dartmouth Bridge Commission Business Plans
3. Efficient Transportation adequate and appropriate insurance coverage for the protection of its assets and The efficient management of bridge traffic revenue stream are also fundamental to is a constant focus. In recent years, great fiscal management. The commission also strides have been made to improve traffic works to ensure the most effective use of flow on the bridges. The provision of long-term borrowing and investment efficient cross-harbour transportation is capabilities. achieved through programs and initiatives such as the third lane on the Macdonald The commission’s strong dedication to the Bridge, MACPASS, and the constant maintenance of its assets, as well as the monitoring of bridge traffic. effective collection of tolls for over 31.8 million vehicles annually, significantly The commission promotes and distributes contributes to the commission’s sound MACPASS via its online customer service financial position. centre,
Constant monitoring and effective response 2004–2005 by the commissionaires to collisions and weather conditions helps to ensure efficient Safety Priorities travel and also raises the level of customer The commission’s safety priorities for service provided by the commission. 2004–2005 are as follows:
• enforce speed limits and take measures 4. Fiscal Management to reduce collisions to ensure safe Sound financial management and fiscal passage for bridge patrons stability are achieved through various • conduct a vulnerability assessment of policies, programs and initiatives the commission’s property, which will including, but not limited to the following. guide the improvement of security at The commission continually reviews, the bridges develops, and implements policies, plans, • continue to develop and implement the and a budgeting process to support annual emergency response plan operating costs and capital projects. The commission’s cohesive system of internal • continue to develop and implement a controls is vital to its successful fiscal public safety manual management. Assessing risk and obtaining 29 Halifax-Dartmouth Bridge Commission
Maintenance Priorities • increase MACPASS usage through further marketing and promotional The commission’s maintenance priorities campaigns for 2004–2005 are as follows: • test a new multi-protocol reader and • carry out the wearing surface transponder for electronic toll replacement program on the collection to determine the feasibility of Macdonald Bridge approaches a more cost-efficient transponder • paint the cables on the Macdonald Bridge Fiscal Management Priorities
• upgrade the ice cast weather system in Through the review, development, and order to provide more comprehensive implementation of policies, plans, and information and to allow enhanced budgets, the commission will continue to accessibility • effectively collect tolls, both • continue with the concrete refurbishing electronically and mechanically program on the Macdonald Bridge • maintain the reliability of internal • continue conversion to “pre-wet” salt control systems application to allow for a reduction in • meet obligations to bondholders the volume of salt used for ice control on the bridges • meet capital project requirements
• carry out trough fatigue analysis and • manage the operating, maintenance, repair program on the MacKay Bridge and administration budget
• use the commission’s cash flow for Efficient Transportation Priorities capital expenditures and investment The commission’s efficient transportation for the reduction of debt priorities for 2004–2005 are as follows:
• in conjunction with the Halifax Regional Municipality, conduct a study to determine the current capacity of the bridges and identify potential access and egress improvements
• implement web cameras for both bridges to allow patrons to view the status of bridge traffic online 30 Crown Corporation Halifax-Dartmouth Bridge Commission Business Plans
Budget Context Forecast Budget Year Ended Year Ended Dec. 31, 2003 Dec. 31, 2004 ($ ,000) ($ ,000)
Total Program Expense—Gross Current 18,110 19,134
Net Program Expenses—Net of Recoveries (6,618) (5,707)
Salaries and Benefits 1,365 1,580
Funded Staff (FTEs) 28.0 30.0
Forecast Budget Year Ended Year Ended Dec. 31, 2003 Dec. 31, 2004 Core Business Areas ($ ,000) ($ ,000)
Safety 692 717
Maintenance 1,456 1,786
Efficient Transportation 1,098 1,165
Fiscal Management 14,198 14,725
Administration 666 741
Total Gross Current 18,110 19,134
Total Program—Expenses Net of Recoveries (6,618) (5,707)
Salaries and Benefits 1,365 1,580
Funded Staff (FTEs) 28.0 30.0
31 arget . This measure more cement program s property ehicle Snow Removal Program Improved signage at the tolls Enhanced driver education V Maintain speed enfor Enhanced driver education Strategies to Achieve T • • • • • s arget 2005 .24/ 100 000 VKT As close to the posted speed limit as possible T s , vehicle damage, or harm to the commission’ y arget 2004 .25/ 100 000 VKT As close to the posted speed limit as possible T s ear 2003 MacKay: 78.4 km/hr Posted speed limit: 70 km/hr Macdonald: 62 km/hr Posted Speed Limit: 50 km/hr (See Note 2) vey data were changed to more accurately reflect areas of jurisdiction. Base Y .26/100 000 VKT (See Note 1) • • mance Measures for y or property loss s. veys Measures Reduction of collisions resulting in personal injur Reduction of the average speed as per monthly sur Safety s) verage speed of Indicator Number of collisions per 100 000 vehicle kilometres traveled (VKT A vehicles on the bridges y and property damage Core Business Area 1 Outcomes and Per Outcome Decreased number of collisions involving personal injur Compliance with posted speed Note 1: During 2003, the recording procedures for collisions were changed to reflect only involving personal injur 32 accurately reflects the number of collisions per 100 000 VKT Note 2: During 2003, the locations where statistics are gathered to provide speed sur Crown Corporation Business Plans arget ch new coating systems The commission has routinely completed major concrete repairs for the last 10 years and expects this to continue for at least 5 more years Use of cable crawler for painting and inspections Annual painting program Resear • • Strategies to Achieve T • • arget 2005 87% complete 65% complete T arget 2004 80% complete 30% complete T ear 2002 66% complete 0% complete Painting staff take three painting seasons (May to September) to complete the bridges Base Y s annual s annual s annual Measures Engineer’ inspection report Engineer’ inspection report Engineer’ inspection report Periodic thickness testing Maintenance Indicator Elimination of concrete spalling Minimal flaking and cracking of main cable coating Minimal loss of steel Cables Piers Main structures Core Business Area 2 Bridges maintained in superior condition: Outcome 33 arget ASS-only lanes as usage through continuous usage ASS ASS MACP MACP Increase marketing and increased distribution Increase Add additional MACP volume allows • Strategies to Achieve T • • arget 2005 72,000 52% 4 vehicles 3 vehicles T arget 2004 64,000 48% 4 vehicles 3 vehicles T ear 2001 36,000 30% 12 vehicles 6 vehicles Base Y usage ASS ASS centage of total viced lanes otal number of Measures per month (as a per usage) Greater usage of MACP T transponders on the system MACP Reduced number of vehicles lined up during peak periods Ser Automatic lanes ransportation ASS MACP chases and Efficient T Queues for token pur change Queues for automatic toll lanes Indicator Number of transponders in use • • Core Business Area 3 Outcome Increased number of transponders on the system 34 Reduced toll plaza congestion Crown Corporation Business Plans arget the bridges in superior condition efficiency of crossings effective toll collection good internal controls effective budget management good cash management Strategies to Achieve T Maintain: • • • • • • arget 2005 0 Maintain baseline $5 million/ year T arget 2004 0 Maintain baseline $5 million/ year T ear 2001 0 Bond ratings AA (low) and A+ $5 million/ year Base Y Measures Number of times the line of credit is utilized Continuance of positive bond ratings Accumulation of capital and sinking funds Fiscal Management Indicator Sufficient funds to run business, preventing the use of bank line credit Fulfilment of trust indenture covenants and meeting interest payment requirements Capital and sinking funds Core Business Area 4 Outcome Meet obligations to bondholders Positive cash flow Reduced net debt 35 Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
InNOVAcorp Business Plan 2004–2005 Table of Contents Mission ...... 39 Planning Context ...... 39 Performance in 2003–2004 ...... 40 Strategic Goals ...... 43 Core Business Areas ...... 44 Priorities for 2004–2005 ...... 46 Budget Context ...... 47 Outcomes and Performance Measures ...... 48 Crown Corporation InNOVAcorp Business Plans
capitalist. It is a respected partner in a Mission growing number of strategic areas of life sciences and information technology. To enable Nova Scotia companies Since its inception InNOVAcorp has realized to accelerate the commercialization that small businesses (SMEs) are a key of their technologies and increase segment of the economy, fuelling new jobs, competitiveness in export markets. sales, and exports, and can play a significant role in closing the productivity gap. However, without assistance, roughly Planning Context 65 per cent of these businesses fail at the early stages of development due to the lack It is a fact that productivity accounts for the of resources to assemble a well-seasoned and real gap between the Canadian and US diverse management team. Consequently, economies today. Both the provincial and the business struggles with developing and federal economic growth strategies implementing strategies to access finance, highlight the important role innovation secure a market position, and manage needs to play in both driving the economy financial and human resources. Another and accelerating the closing of this contributor to failure is isolation from other productivity gap. There is a continuing entrepreneurs and professionals who could need to provide targeted and leveraged provide valuable advice to the management investments in infrastructure to enhance team. Experience indicates that business the ability of the private sector to adopt and owners with access to focused management commercially develop new technologies skills and business and technical that improve productivity and intelligence dramatically increase their competitiveness. InNOVAcorp, a provincial chances for success. InNOVAcorp has Crown corporation, is Nova Scotia’s created a high-performance incubation investment in catalysing the growth of this system using both face-to-face and online segment of the economy and is very proud tools that give entrepreneurs access to of its role. critical business advisory resources to InNOVAcorp provides an important overcome these challenges. component of the innovation and Since the inception of the corporation’s first commercialization function of the public incubator in 1987, more than 70 businesses sector. It operates two technology incubators, have graduated from our facilities. Further, provides a mentoring and relationship more than 84 per cent of our clients remain management network for growing operational in Nova Scotia after graduating entrepreneurs, and is an active venture 39 InNOVAcorp
from our high-performance incubation commercialization process. The corporation process, resulting in an ongoing positive is also examining ways to raise more economic impact on the region. capital for investment and for expansion of its partnering activities with other venture InNOVAcorp’s key growth opportunities for capitalists and financial institutions. incubation include developing a grow-out business incubator at 101 Research Drive The 2004–2005 Business Plan continues to for companies that have progressed beyond focus the corporation’s strategic direction early stage incubation, allowing on providing access to a grow-out incubator InNOVAcorp to optimize occupancy at the and specialty incubation space, evolving Technology Innovation Centre and the InNOVAcorp’s network of mentors and BioScience Enterprise Centre and increasing business advisors and online mentoring promotion of services to resident and platform, and increasing venture affiliate clients. investment activities through leveraging and new funds. The past few years have been challenging in the venture capital industry in Atlantic InNOVAcorp will continue to make a Canada and throughout North America. significant difference in the technology We are pleased the NSFF’s portfolio sectors and the broader economic growth of performance and investment activity have Nova Scotia by accelerating technology- been similar to the experience of other based companies through the venture capital investment managers in commercialization process. Canada and the United States.
During the 2003–2004 fiscal year, the Province of Nova Scotia invested a further Performance in $8 million in the NSFF to support the 2003–2004 investment activities of InNOVAcorp’s high- InNOVAcorp achieved many significant performance incubation strategy. This objectives and milestones in the 2003–2004 investment makes available the capital business year. required to invest in companies at or near the commercialization stage, in • We hosted the announcement of the information technology, life sciences, and Premier’s Advisory Council on knowledge-related sectors of the province’s Innovation, a council of independent economy. With additional investment experts advising government on how to funds, InNOVAcorp has the experience and stimulate the best conditions for relationships to substantially increase its innovation in Nova Scotia. The event included a mini trade show highlighting 40 venture investment activities in the Crown Corporation InNOVAcorp Business Plans
some of the province’s existing working with the province’s biosciences innovative companies and the public industry association, BioNova, on an launch of Innovative Nova Scotia, a industry conference, BioPort 2003. We policy to increase the use of knowledge- also worked with the Nova Scotia Bio based innovation to levels that match or Industries Team to ensure a strong exceed those found in the nation’s presence at BIO 2003 in Washington, leading regions. DC, the world’s largest biotechnology conference and exhibition. Further, we • We participated in policy development led the creation of Atlantic Innovation activities affecting the province’s Day, an event honouring and knowledge sectors, ensuring that Nova encouraging innovation in Atlantic Scotia companies remain competitive Canada, focusing on the 2003 Manning globally. Award winners. • We chaired a Voluntary Planning Sector • We represented Nova Scotia’s Committee, a community-based task innovation agenda at the 28th Annual force to examine and assess Nova Scotia’s Conference of New England Governors economic performance, productivity, and and Eastern Canadian Premiers in competitiveness and to identify Connecticut, the first APEC Incubator opportunities for improvement. The task Forum in Taipei, and the UK Business force has created a system to monitor and Incubator Conference. track economic performance in urban and rural communities. • We partnered with a number of private and public organizations to develop • We were one of four recipients of Nova Scotia’s knowledge sectors, creating Canada’s prestigious Manning an environment where local companies Innovation Awards for our work on an can thrive and be more competitive. automated processing machine that Some of the organizations include removes meat from crab legs. The Air Greater Halifax Partnership, BioNova, Chamber Crab Processor replaces Information Technology Industry traditional machines that required Association Nova Scotia (ITANS), Telecom workers to hold the crab legs while a Applications Research Alliance (TARA), burst of compressed air forced out the NovaKnowledge, Business Development meat and often led to a respiratory Bank of Canada (BDC), Nova Scotia condition called “crab asthma.” Business Inc.(NSBI), Life Science • We played a lead role in the Development Association (LSDA), development of several major initiatives Atlantic Canada Opportunities Agency in the life sciences industry, including 41 InNOVAcorp
(ACOA), Industry Canada, Waterfront new locations, these graduates Development Corporation, World Trade continue to fuel the creation of new Centre, Nova Scotia Film Development jobs, innovative products and services, Corp., Nova Scotia BioIndustries Team, sales, and exports. ACBA, Dalhousie University, Acadia • We maintained our partnership with a University, University College of Cape local commercial training company, to Breton (UCCB), National Research offer specially structured and priced Council, and Canarie. professional development sessions to our • We continued to progress in our plan to clients. With sessions happening on site convert our facility at 101 Research at our incubators, clients benefited from Drive into a grow-out business expertise in areas such as prospecting for incubation facility for companies that new clients, high-performance have progressed beyond early stage leadership, negotiation selling, and incubation. We secured an anchor effective communications skills. tenant for 101 Research Drive. A local • We extended our partnership with nutritional product company is Entrepreneurs’ Forum, a local relocating its research and development organization that fosters the growth laboratories from the BioScience and development of knowledge-based Enterprise Centre and its management companies by providing ongoing and administrative team, currently support, educational opportunities, based in Bedford, NS, to the facility. and mentoring. • We incubated 75 companies, both • We held more than 70 additional resident and affiliate, at our three sites information sessions, training seminars in Dartmouth and Halifax; 75 new and networking events for our clients. employees were hired by these firms. Ranging from formal opportunities to • We maintained an average occupancy meet with visiting trade delegations to rate of 80 per cent at the Technology casual, fun social gatherings, these Innovation Centre and the BioScience initiatives were rich with important Enterprise Centre. business information. The gatherings also allowed client entrepreneurs to • Four clients graduated from our avoid the isolation that often resident incubation program, which accompanies early stage business means they reached business development and to connect with development milestones that made people who could help them grow their them ready to move from our premises companies. 42 into commercial real estate. From their Crown Corporation InNOVAcorp Business Plans
• We continue to play a leading role in the • We continue to expand our strong Canadian Association of Business network of venture capital companies Incubators (CABI), serving on the to provide multi-investor deals. This association’s Board of Directors, chairing approach has enabled the Nova Scotia the international relations committee, First Fund (NSFF) to leverage its and managing the CABI newsletter. investment in excess of 10 times, when other venture capitalists, investors, and • We attracted two technology patent government funds are included, and to agents as InNOVAcorp affiliate clients to participate in larger and later-stage serve Atlantic Canadian innovators. transactions. The result is a more • We continue to proactively engage the diversified approach to investment risk. outside business community to assist clients in strategic planning and execution. We also played an active Strategic Goals role in helping to secure potential lead In 2000 the Province of Nova Scotia sales and industry partnerships for released its economic growth strategy, several organizations. Opportunities for Prosperity (OfP), • We provided online business guidance recognizing innovation as one of the to over 50 companies from across the fundamental pillars of our overall province. economic framework. It also identified the • Fifty-five information inquiries were growth of emerging industries such as life handled through the Industrial Research sciences, energy, advanced manufacturing, Assistance Program (IRAP) supported and the learning and digital economies as information specialist through the one of its key strategies.
partnership between InNOVAcorp and the In June 2003, the Premier reinforced the National Research Council (NRC). commitment to innovation by unveiling a • We continue to operate an active venture new policy, Innovative Nova Scotia—An capital fund, the Nova Scotia First Fund Innovation Policy for the Nova Scotia (NSFF), a provincially based venture Economy, and announced the formation of capital fund. This year our efforts have a 16-member council to provide been directed toward growing our government with independent advice on existing portfolio. We currently manage how to stimulate the best conditions for 11 investments, consisting primarily of innovation in Nova Scotia and implement investments in information technology the innovation policy. and software and life sciences sectors. 43 InNOVAcorp
InNOVAcorp is committed to support the Province of Nova Scotia’s economic growth Core Business strategy and its innovation agenda and is Areas focused on the following strategic goals:
• Work collaboratively with public and High-Performance Incubation private partners to champion and InNOVAcorp is building an environment implement Nova Scotia’s innovation that provides entrepreneurs with access to strategy by providing leadership on crucial intellectual and physical matters related to technology infrastructure that in most ways affords commercialization. small companies with support systems
• Enhance the growth of knowledge- comparable to those of much larger based industry sectors by accelerating organizations. InNOVAcorp’s core business technology-based companies through function is high-performance incubation, the start-up and development stages of and we do this by offering a network of the commercialization process. critical business resources, including business incubation, mentoring, and • Build and foster a dynamic and stable investment. entrepreneurial culture by providing the environment where entrepreneurs Business Incubation can grow and prosper through shared experience and strategic relationships. InNOVAcorp manages two technology incubators, which currently host over 50 InNOVAcorp’s strategic goals align with the high-technology companies. The Technology government priorities of building greater Innovation Centre in Dartmouth targets prosperity and fiscal responsibility and companies in the information and accountability as outlined in the telecommunications technology and the government blueprint. engineering industries. The BioScience Enterprise Centre in downtown Halifax focuses on companies in the life sciences industry. Both facilities offer a comprehensive mix of business incubation services that include flexible leasing of lab, industrial, and office space and shared administrative support.
44 Crown Corporation InNOVAcorp Business Plans
A third facility, the former Nova Scotia Investment Research Foundation at 101 Research Drive Investment, in concert with business in Dartmouth, is being transformed into incubation and mentoring, support another business incubator, focusing on promising entrepreneurs from start-up to companies that have progressed beyond first-stage expansion through innovative early-stage incubation but are still financing. InNOVAcorp manages the Nova progressing towards commercial Scotia First Fund (NSFF), which is an early- sustainability. stage source of capital for Nova Scotia InNOVAcorp is also actively involved in the businesses. The NSFF was formed by the growth of other incubators in the province. Government of Nova Scotia in 1989, and InNOVAcorp was mandated to manage the Mentoring portfolio in 1997. InNOVAcorp currently manages 11 investments, which consist The mentoring program helps primarily of investments in the entrepreneurs find a faster and less information, technology, and life sciences expensive path to success by leveraging the sectors. The NSFF provides venture corporate knowledge base developed by investment in the range of approximately InNOVAcorp and the experiences of others $500,000 in early-stage, fast-growing within the business community. It helps companies that meet the following criteria: identify and remove business obstacles and bottlenecks, keeping the entrepreneur • an operational base in Nova Scotia focused on the business and moving in the • a viable financial and business model right direction towards success. • a fully developed business plan Every company and entrepreneur has unique requirements for assistance. • a commercially viable product or process InNOVAcorp delivers a suite of services that • capable management with a proven can be tailored to meet the unique track record characteristics of each company as it InNOVAcorp’s uses the same investment progresses through the stages of growth. A criteria as traditional venture capital firms. key component of the mentoring program It targets early-stage companies from start- is the provision of a fluid, collaborative, up to the development stage. and open environment where entrepreneurs can also benefit from the experiences of one another.
45 InNOVAcorp
Priorities for 2004–2005 For 2004–2005 InNOVAcorp’s priorities include the following:
• Support the implementation of Nova Scotia’s innovation strategy by providing advice to the Premier’s Advisory Council on Innovation and other federal and provincial initiatives.
• Maintain current occupancy rates at the Technology Innovation Centre and the BioScience Enterprise Centre.
• Complete the transformation of 101 Research Drive into a grow-out business incubation facility.
• Provide tailored advice that will help promising entrepreneurs meet their specific business goals.
• Continue to develop a pool of mentors and business advisors to support InNOVAcorp’s high- performance incubation activities.
• Identify new opportunities for equity investments in life sciences and knowledge-based companies in Nova Scotia and make follow-on investments in existing venture portfolio companies to preserve and grow the value of our investments.
46 Crown Corporation InNOVAcorp Business Plans
Budget Context
Estimate Forecast Estimate 2003–04 2003–04 2004–05
Revenue
Provincial Funding 2,195,000 2,151,000 2,195,000
Program Revenue and Recoveries 2,664,400 1,343,100 2,276,400
4,859,400 3,494,100 4,471,400
Expenses
Total Operating Expenses 4,854,900 4,265,900 4,346,000
Income before Other Items 4,500 (771,800) 125,400
Other Items
NSFF Gains (Losses) 202,000 78,300 154,900
Amortization (595,000) (369,300) (731,100)
Interest Income(Expense), 1,000 (31,700) (55,200) Dividends, & Capital Gains (Losses)
Income (Loss) (387,500) (1,094,500) (506,000)
47 arget ch Drive into a grow-out corp offering A NOV rack number of jobs created in incubation Incorporate the online mentoring platform into In Provide an integrated approach to clients in growing their businesses T companies Provide an integrated approach to clients in growing their businesses Expand 101 Resear business incubation facility for companies that have progressed beyond early-stage incubation Continue to develop a pool of mentors Strategies to Achieve T • • • • • • . arget Maintain or exceed baseline year Maintain or exceed baseline year Maintain or exceed baseline year Maintain or exceed baseline year 50% increase T 2004–2005 No baseline available 85 new employees 4 No baseline available No baseline available 2004) 2003–2004 (as of Feb 25, ear 2002–2003 Base Y Measure No baseline available 226 jobs in incubated companies (at Dec 31, 2002) 2–4/year No baseline available No baseline available mance Measures for ved outside Halifax ving on boards Measures Number of companies ser Metro Economic impact (jobs) Number of graduated companies Specialty incubation space Number of business advisors and mentors ser formane Incubation High Per Indicator Clients, companies, in incubators, who exhibit growth Smart incubation Access to business advice cialization process echnology-based Core Business Area Outcomes and Per Outcome (benefit/impact) 48 T companies accelerated through the 2nd/3rd stages of growth the commer Crown Corporation Business Plans arget rack the number of jobs created in existing Maintain or increase the leverage ratio Invest in partnerships with existing and new venture capitalists Increase occupancy within 3 incubators New investment/follow-on investment T and new investments. Maximize the value of investments under management Strategies to Achieve T • • • • • • arget Maintain or exceed baseline year Space increase above baseline Maintain or exceed baseline year Increase above baseline 2004–2005 T 13.7 60% 3 follow-on 172 jobs in the investment companies (at Dec 31, 2003) 19 total (at Dec 31, 2003) 2004) (as of Feb 25, 2003–2004 ear 2002–2003 Measure Base Y 12.9 58.5% 2/year average 159 jobs in the investment companies (at Dec 31, 2002) 19 total (at Dec 31, 2002) verage leverage ratio otal investments Measures A % of leased space Follow-on investments Economic impact (jobs) T formane Incubation corp A High Per NOV Indicator Financial return to In Core Business Area (benefit/impact) Outcome Maximize shareholder value 49 Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Nova Scotia Business Incorporated Business Plan 2004–2005 Table of Contents Mission ...... 53 Planning Context ...... 53 Strategic Goals ...... 57 Core Business Areas ...... 58 Priorities for 2004–2005 ...... 61 Organization ...... 72 Budget Context ...... 73 Outcomes and Performance Measures ...... 74 Crown Corporation Nova Scotia Business Incorporated Business Plans
Eighty-six per cent of businesses in the Mission province remain somewhat or very optimistic about their business outlook over To deliver client-focused business the next three years: 86 per cent plan to solutions that result in sustainable, increase sales, 59 per cent plan to hire value-added economic growth for additional staff, 52 per cent will introduce a Nova Scotia. new product or service, and 47 per cent plan to invest in facilities or equipment.
However, Nova Scotia is not without its Planning Context challenges. Only 65 per cent of businesses believe that Nova Scotia is an excellent or During its first full fiscal year, 2002–2003, very good place in which to do business, and NSBI met or exceeded its corporate objectives; they continue to believe that improvement is and projections to the end of fiscal year necessary in areas such as infrastructure, 2003–2004 indicate that the organization attracting new businesses to our province, continues on track. With customer and helping existing businesses grow. satisfaction at 90 per cent, and a highly Taxation, competition/maintaining market motivated, professional, and committed share, recruiting skilled workers, and the employee team, NSBI is poised for growth. economic climate were cited as the most And growth continues to be on the minds of important issues facing companies. The businesses throughout the province. most important issues facing small In preparation for the planning period, businesses in the province are NSBI commissioned research on training/upgrading employees, staying business/economic opinions from abreast of market trends, and gaining access businesses and the general public to capital—particularly for smaller throughout Nova Scotia to validate businesses and those operating in findings from its own regional business case knowledge-intensive industry sectors. analysis, feedback from account executives, NSBI also took the pulse of public opinion and a series of province-wide stakeholder on awareness and performance: 30 per cent feedback sessions. The results were of businesses and 23 per cent of the general encouraging. public were very familiar or somewhat Business optimism continues to remain familiar with NSBI—an increase over the high, despite SARS, the rising value of the results of the previous survey period. NSBI Canadian dollar, strained Canada/US also found that the majority of respondents relations, and weakness in the US economy. supported its role in assisting Nova Scotia 53 Nova Scotia Business Incorporated
businesses and attracting new business to • There is uncertainty about the the province and believed that it should sustainability of the US economy operate 100 per cent independent of beyond mid-2004. However, recent news government, with a cost-recovery mandate. of the sharp 8.2 per cent growth in third quarter GDP is encouraging.
Economic Landscape • Uncertainty about likely changes in
Economic Update key global exchange rates and their impact on the Canadian economy will Some highlights: be felt more noticeably in 2004. • Economic growth prospects for Canada have been trimmed back somewhat— Nova Scotia expect 2 per cent or slightly lower In September 2003 the Nova Scotia overall GDP growth for 2003. Department of Finance presented a downward revision to Nova Scotia’s growth • Contributing factors to this weaker prospects for 2003. The forecast suggests growth picture include; the SARS, BSE, that provincial GDP will grow by 2.3 per and blackout shocks and inventory cent in 2003, with an uptake predicted to adjustments—a draw-down on existing the near 3 per cent range in 2004. An inventories rather than new earlier forecast had suggested provincial production. Some slack still remains in GDP growth in the 2.9 per cent range for manufacturing capacity. 2003. Employment is still on track to grow • On a positive note, consumer domestic by at least 1.5 per cent this year, reasonably demand remains strong and is good growth by Nova Scotia standards. expected to drive growth in 2004. A Uncertainty around the timing of offshore global recovery seems to be under way. gas development and its associated capital • Look for some strengthening in the expenditures is placing a drag on the Canadian economy in the third quarter forecast. As well, there has been somewhat of 2003 and through 2004. of a pullback in overall consumer spending • Core inflation is expected to stay below this year. Housing starts have been a source 2 per cent, at least until mid-2005. of strength. Starts are expected to tail off through the remainder of 2003 and into There are risks on the forecast horizon, 2004, but will still outpace national growth the foremost being the following: rates.
54 Crown Corporation Nova Scotia Business Incorporated Business Plans
Export Update the US dollar has eroded the exchange rate The latest export data (to end of August cushion and unmasked Canada’s 2003) shows Nova Scotia exports up 7.3 per competitive weaknesses dramatically. Cheap cent. The province continues to trail all labour is no longer enough. other provinces in Canada in exports as a In Industry Canada’s 2001 provincial and percentage of GDP. Destination of the industry comparisons of labour exports has not changed significantly, with productivity, Nova Scotia labour was just just over 80 per cent of exports going to the under 80 per cent as productive as the United States with approximately 44 per Canadian benchmark. It also indicated cent of this to New England and 22 per cent that Nova Scotia labour productivity has to the South Atlantic region. The next eroded slightly over the 1997–2001 period; largest exporting destination is the EU with so not only is Nova Scotia labour less approximately 7 per cent of total exports. productive than the Canadian standard, but the gap is widening. The Productivity Challenge “Canada’s lagging productivity is the main Nova Scotia companies must adapt in the driver behind the substantial income gap face of this productivity challenge. However, between Canada and the United States …” recent evidence collected by the Business “We are not talking about working people Advisory Team, which is supported by a harder; it’s about working smarter, which is recent Bank of Canada survey, shows that what productivity is about.” Nova Scotia companies are not making “Improve investment in machinery and adjustments to the rapid shift in exchange equipment, which will allow workers to rate. Companies are watching their ‘work smarter’ and achieve more through margins erode; adjustments in output and breakthroughs with technology.” employment will inevitably follow. (Conference Board of Canada) Competition for Foreign Competitiveness in the global market place, Direct Investment (FDI) and particularly long-term competitiveness, is tightly linked to productivity. In turn, Nova Scotia must compete intensely on the productivity is a key factor influencing world stage with more than 160 national prosperity. Recent empirical work shows that and 250 sub-national investment promotion there is a growing productivity gap between agencies working aggressively to attract the Canada and the United States along with the kind of FDI that can accelerate economic other G7 countries. What is more, the transformation. Some figures place the appreciation of the Canadian dollar against number of investment attraction agencies in the US in excess of 2,500, including state and 55 Nova Scotia Business Incorporated
city agencies, universities, and utility decreased from 16 per cent to 10 per cent. companies—all attempting to sell their The decline has been most pronounced in economic development story to a finite manufacturing industries. group of companies. FDI in Atlantic Canada amounts to no Given the size and wealth of its market, more than 5 per cent of the national total, North America is a magnet for transnational lower than the region’s share of GDP (6 per investors. Proximity, lower costs, and NAFTA, cent), investment (6 per cent), and which provides Canada with preferred access population (8 per cent). Nova Scotia’s to the US market, situate Canada as a portion of FDI is just under 2 per cent of the competitive alternative for North national total. The US is the largest source America–bound investment from Europe of investment in Atlantic Canada, followed and Asia. While the US is a major source of by the United Kingdom and other FDI in Canada, it is also Canada’s most European countries. This is the context in direct competitor for North America–bound which Nova Scotia is competing for its investments from Europe and Asia. share of FDI.
Foreign Direct Investment in Canada Nova Scotia’s Experiences in Fiscal Year 2002–2003 • Since 1998, cumulative net FDI inflows have increased by $245 billion, to raise Nova Scotia typically competes with those Canada’s stock of FDI to $349 billion regions and jurisdictions that boast similar (two-thirds is from the US). cost structures, infrastructure, and skilled workers. In 2002–2003, Nova Scotia faced • Europe accounts for 29.3 per cent of FDI competition from US states, other in Canada in 2002. The top five Canadian provinces, and Mexico. The European investors in Canada are following table identifies the primary France, the UK, the Netherlands, competition (by sector) that NSBI faced in Germany, and Belgium. the past year. • North America and Europe accounted Improving Nova Scotia’s for 94.6 per cent of the total FDI in Competitive Position Canada last year. The intensity of competition for investment Canada has been losing ground in the is increasing. Globalization and competition for FDI. Over the past decade, technological advances are breaking down Canada’s share of North America–bound borders previously believed to limit and FDI dropped from 6 per cent to 3.2 per cent, direct the flows of FDI. For example, once and its share of US direct investment abroad recognized as a sound location for contact 56 Crown Corporation Nova Scotia Business Incorporated Business Plans
Customer IT— IT— Energy— Life Manufacturing Contact Application Software LNG Sciences Centres Development Development opportunity & Outsourcing
Geographic US US New England Nova Scotia New England Europe Focus region
Primary Quebec, India, Quebec British Columbia, New Brunswick, Quebec, Competitors Prince Edward Alberta, New Maine Ontario Island, Brunswick, New Brunswick Quebec
centre operations, India is now regarded as The manufacturer built their plant in a viable low-cost alternative for IT; in Georgia, indicating that the reason they particular application development and proceeded was largely influenced by the outsourcing operations. commitment shown by the state and local municipality. Incentives are often the The level of incentives provided today deciding factor in the decision making for continues to reach extraordinary capital intensive and manufacturing proportions. As an example, in 2000 a situations. large tire manufacturer (Michelin) was given by the state of Georgia and the local municipality a number of incentives to set up a plant in their state. They provided to Strategic Goals the manufacturer the following: The concept of Nova Scotia Business Inc., a private-sector-led business development • 748 acres of land free of charge agency, was first introduced in 2000, with • a rail line ($5 million) and a road ($14 the release of Opportunities for Prosperity, the million) direct to the back of the plant province’s economic growth strategy. In (State-built specifically for the November 2001, NSBI became fully opportunity) operational and officially embarked on its • costs associated with all employee five-year mission by helping existing training (6 months in advance), businesses expand and attracting new investment to Nova Scotia. • a payroll rebate of 5 per cent for 15 years NSBI’s vision is to be the leading catalyst for • the costs associated with the construction business growth and the expansion of of the plant (the community increased economic opportunities throughout the the municipal sales taxes to pay for it) province—in other words, NSBI is the lead 57 Nova Scotia Business Incorporated
business development agency for the • Provide access to capital for province. The organization provides new/existing businesses in Nova Scotia, customized business-focused solutions aimed in order to enhance value-added at attracting companies to the province and growth for the province’s economy. helping existing firms grow through • Increase the visibility and recognition expansion and export development. of Nova Scotia—its business climate, NSBI prides itself on generating a return on advantages, and capabilities—at home investment for Nova Scotia taxpayers by and abroad. investing wisely in businesses that are • Develop an action-oriented, client- export and growth oriented, innovative, focused organizational culture that and sustainable. This requires the encourages, empowers, and supports organization to focus its resources in the high performance, entrepreneurial areas that offer the greatest potential for thinking, and professionalism. economic growth—over the short term and the long term. NSBI concentrates activity in NSBI will continue to focus its attention and five strategic sectors in varying degrees, resources on the achievement of these goals depending on their stage of development over fiscal year 2004–2005. and growth potential: life sciences, IT, energy, advanced manufacturing and learning industries. NSBI also focuses on Core Business traditional industries—in particular in Areas those sectors that provide opportunity for During the past fiscal year, NSBI continued value-added products. to refine its service offerings and streamline Five broad strategic goals drive the the corporation to better meet the needs of organization’s business activity: clients. As a result, a new business unit— • Promote the growth of new and existing Small Business Growth—was created by businesses in Nova Scotia by enabling combining the Business Advisory Team and them to exploit business opportunities Export Development Group. The following in both local and export markets. outlines the role of NSBI’s three core business areas—business attraction, small • Attract leading-edge, sustainable business growth, and financial services business investment to Nova Scotia with specific initiatives for fiscal year that will immediately and over the 2004–2005. long term provide ongoing economic benefits to the province. 58 Crown Corporation Nova Scotia Business Incorporated Business Plans
1. Business Attraction performance-based investment that is paid to companies as they achieve predetermined Bringing new, sustainable, and value- milestones. These investments continue to added business to the province is highly generate a positive return on investment and competitive as jurisdictions worldwide vie have proven to be a fiscally responsible way for opportunities that generate incremental to support Nova Scotia’s existing strong economic growth and employment. NSBI business case. However, business climate has established a targeted, aggressive issues, the regulatory environment, and approach to business attraction and shortages of highly skilled labour in certain identifies companies with the greatest sectors continue to be challenges for external opportunity for success and long-term investors. sustainability—companies that fit key target sectors. 2. Small Business Growth NSBI actively markets the Nova Scotia In Nova Scotia, more than 90 per cent of business case to prospective clients to businesses have fewer than 50 employees— illustrate the competitive advantages of which accounts for more than 51 per cent doing business in the province. In the past of total employment in the province and year, most effort was concentrated on the contributes significantly to economic US marketplace. This upcoming year will growth and prosperity. In order to better include prospecting for investment respond to the needs of growth-oriented, opportunities in Europe; in particular the smaller businesses in Nova Scotia, NSBI UK, Germany, Spain, and the Scandinavian realigned corporate resources, bringing the countries. For companies considering Nova expertise of the export development and Scotia as a relocation option for all or part business advisory teams together in the of their business, NSBI is a single point of Small Business Growth group, and further contact. NSBI provides a seamless solution supporting the provincial “Blueprint Book” to clients—one that covers all aspects of goal of strengthening assistance to small their requirements, from financing and real businesses through NSBI. estate, to labour and equipment—by harnessing the co-operation of appropriate According to recent NSBI-commissioned levels of government and private-sector research, there are a number of critically organizations. important factors for small businesses operating in the province that are not NSBI has utilized incentives through Strategic being adequately fulfilled by current service Investment Funds, to facilitate companies’ providers. In particular, small businesses expansions in the province. These incentives cite training/upgrading employees, help offset a portion of the costs through a 59 Nova Scotia Business Incorporated
keeping abreast of market trends, accessing 3. Financial Services growth capital, and developing exports to Capital is an essential ingredient of business be critically important to their continued growth and competitiveness. The Financial growth and success. Services group works to improve access to Further research with Nova Scotia capital for business in the province. NSBI companies through one-on-one meetings understands that businesses require different and client feedback confirms that types of capital—equity, subordinated debt, competitiveness and productivity term debt, or working capital—depending on improvements continue to be key areas of their stage of growth. Therefore, NSBI concern, affecting companies’ ability to win customizes financial solutions to meet clients’ business nationally and internationally. And needs, while filling financing gaps in the according to recent studies, Nova Scotia is a marketplace, often in partnership with other “productivity laggard” in comparison with a financial institutions. NSBI obtains the peer group of “like” provinces and US states. capital it invests in companies through two This productivity gap is being exacerbated funding sources: the Nova Scotia Business and unmasked by the rapid erosion of the Fund (an annual provincial allocation plus Canada/US exchange rate buffer. Cost- reinvested capital generated from NSBI’s effective labour and reliance on exchange portfolio) and Strategic Investment Funds rate advantage is no longer enough to create (customized financial assistance based on a competitive advantage for Nova Scotia projected tax returns to the province and a firms. Margins are eroding, and adjustments positive return on investment). in output and employment will follow. The organization targets businesses Importance to a Small Business operating in strategic and traditional Operating in the Province industry sectors with strong growth prospects, a solid management team, and
Training/Upgrading 77 employees 60 a significant commitment by the owners. Abreast of market trends 66 /business environment 56 This approach ensures that the businesses Access to 55 growth capital 46 financed offer the greatest opportunity for Assistance in increasing 49 amount of exports 24 generating a positive return on investment Assistance in increasing 48 diversity of exports 17 for the province. Communicating range of 47 support programs available 42 NSBI also takes a partnership approach in Access to publicly 42 funded support programs 29 its financing activities and requires 0% 20% 40% 60% 80% 100% business owners to make a significant General Public Business financial contribution that demonstrates 60 Source: General Public and Business their commitment and willingness to share Crown Corporation Nova Scotia Business Incorporated Business Plans
risk. NSBI collaborates regularly with other high-value jobs to Nova Scotia, and financial institutions in order to ensure that result in incremental growth provincial resources provide leverage—or • enhancing the service offerings of the attract further financing to support newly formed “in-province” Small business growth and development. Business Growth team: entrepreneurship Equity clients must demonstrate a development, export development, and sustainable competitive advantage, strong productivity enhancement market potential, experienced and • Developing new financial solutions to competent management, and a financial support productivity growth for Nova commitment from the founders and/or Scotia companies and the development principals. When taking an equity position of early-stage, knowledge-intensive in a company, NSBI prefers to invest as part companies in key strategic sectors (e.g., of an investor syndicate. A realistic exit life sciences, IT) strategy and appropriate valuation are key considerations. • continuing to generate a positive return on investment for Nova Scotia taxpayers Priorities for 2004–2005 Business Attraction Priorities NSBI has implemented a targeted, As NSBI enters the fiscal year 2004–2005 aggressive approach to business attraction planning period armed with a history of based on the characteristics of a successful, operating results and new feedback on its competitive business: flexible, creative, role and mandate, it is well positioned to responsive, professional, targeted, client develop and execute customer-focused focused, and proactive. Over the next fiscal services that clients need to grow and year, NSBI will continue to succeed in this globally competitive environment. In the coming fiscal year, • aggressively target potential clients NSBI will continue to adopt an aggressive and opportunities within key industries business development strategy by delivering • dedicate at least 25 per cent of effort three core services: business attraction, small and resources to targeting longer-term business growth, and financial services. innovative industries Priority areas include the following: • focus on developing industry channel • aggressively targeting new investment partners that are experts in attraction opportunities in key sectors understanding the commercial expansion 61 that match provincial strengths, drive opportunities of our target industries Nova Scotia Business Incorporated
• leverage relationships with Nova Scotia location. Canada is seen as a cost-effective companies to identify new alternative, in particular for projects where opportunities within these companies, constant communication is important. their partners, contacts and industries Client proximity and an understanding of business processes are critical for these types • work with university and college of projects, and Nova Scotia is perfectly faculties to ensure that industry positioned for this type of work. Large targeting is supported by the new outsourcers in the US are looking to relocate graduating workforces or set up operations in Canada to capture • continue to niche the Nova Scotia this part of the market, often referred to as Business Case to make it more relevant “nearshore outsourcing.” to individual businesses Similar to other jurisdictions that have Business Attraction Opportunities ramped up their employment in knowledge- Ten years ago the province of Nova Scotia based economies, Nova Scotia also needs to started to focus on the contact centre have a business attraction strategy that is industry. Today Nova Scotia has less cost sensitive and more innovation approximately 15,000 people employed in oriented. Nova Scotia like other successful this industry; however Nova Scotia’s labour economies builds its long-term investment pool will not sustain another 10 years of strategies with leading-edge research and continued growth. A new focus is needed not development at the university and college only to develop new jobs to increase the level levels. Nova Scotia is known internationally of employment, but also to target jobs that for its effort in GIS and is beginning to increase the average wage of Nova Scotians. develop an academic infrastructure around privacy and security. NSBI will continue to IT Sector work on targeting product-oriented The immediate opportunity in IT is in the companies from both the US and Europe in area of outsourcing. Corporate outsourcing these fields to complement and build on the is on the rise: more than 70 per cent of US innovation in these areas. firms are outsourcing at least some of their Energy Sector software development to offshore locations, fuelled by the need to decrease internal IT Although the level of offshore exploration costs. While many firms are looking at has decreased somewhat over the past year, locations such as India for low-cost NSBI has identified a role in supporting solutions, increasingly there is resistance to downstream opportunities in the energy sending mission-critical or security- sector. NSBI has been actively engaged in 62 conscious projects to an overseas distant the development of a potential LNG project Crown Corporation Nova Scotia Business Incorporated Business Plans
for the province and will continue to identify A targeted approach to business attraction complementary operations that could take requires an in-depth knowledge of the advantage of the additional supply of gas industry strengths that we have in Nova and the output from LNG activities. Scotia. Taking inventory of individual businesses and research efforts in the Manufacturing province allows NSBI the ability to be Manufacturing is an area where Nova proactive on new innovative opportunities. Scotia has lost ground in terms of recent This stocktaking exercise will be an ongoing foreign direct investment. NSBI is engaged practice to ensure that Nova Scotia takes in renewing Nova Scotia’s efforts to attract advantage of all possible inherent strengths. a new industrial base by focusing on Successful companies are often the best companies that move our abundant source of lead generation as they have natural resources up the value chain. The relevant partners and contacts, know the convergence with the natural gas sector Nova Scotia and global markets, and and our abundant natural resources is understand the best businesses and allowing NSBI to target companies in the business practices. Leveraging contacts food processing, aerospace, and advanced within successful Nova Scotia companies to building products industries. identify opportunities through their Life Sciences Sector partners and contacts continues to be a The life sciences sector is small, but major source of lead generation for NSBI. growing, in Nova Scotia. Capital Lead generation comes from a number of investment required to fuel growth is other sources as well, and NSBI will considerable, and significant support is still continue to use all of these sources to required to continue to develop the generate targeted leads that flow through a necessary infrastructure and support for sales qualification process to determine high-tech companies operating in this their “fit” for Nova Scotia. In particular sector. NSBI has identified specific business NSBI will continue to use industry-specific attraction opportunities related to in-market sales lead-generation experts advanced manufacturing that capitalize and contacts to deliver qualified sales leads. on the province’s inherent strengths in The strength of the new Small Business marine bioscience and neutriceuticals. A Growth group is its hands-on experience in long-term approach is the targeting of R&D combination with an extensive network of centres that can take advantage of the contacts and partnerships. The group plans research and marine and medical expertise to enhance its Export Development in this province. offerings in 2004–2005 and to introduce 63 Nova Scotia Business Incorporated
new small business support initiatives that they need to stay competitive. NSBI plans to help Nova Scotia companies increase their develop and pilot-test an Entrepreneurial productivity and competitiveness. Coaching initiative to help qualified Nova Scotia companies acquire the services of Small Business Growth Priorities specialized hands-on business coaches. This program will be delivered on a matching-of- NSBI’s approach to small business is to funds basis to an overall NSBI assistance provide a proactive, province-wide business cap of no more than $5,000 per development group that meets with engagement. businesses to identify their specific needs. This process generates qualified referrals for Market Diversification NSBI’s lines of business or, where In 2004 NSBI will continue to support our appropriate, partner organizations. NSBI exporters’ efforts to open new markets and employees are certified under the Business expand in existing domestic and Retention and Expansion International international markets. “Export Prospector” (BREI) process and have adapted this will be a principal tool to assist in achieving internationally recognized approach to our goals, as will targeted sales call identify business challenges, opportunities, programs in selected markets and strategic and obstacles for growth. Keeping strong sectors. NSBI will continue to support the Nova Scotia companies in the province is coordination of provincial trade activities critical for continued growth and in Nova Scotia, the Team Canada Atlantic prosperity. As a result, NSBI will introduce Trade Mission Program and activities under an Executive Visitation Program, targeting an extended International Business the top 50 private-sector employers—in Development Agreement. NSBI will also order to identify expansion opportunities, implement its new export diagnostic tool— productivity challenges, or potential issues Rxport for use by all Trade Team Nova that would affect their long-term Scotia partners and will complement the profitability and sustainability. rollout with export development training sessions led by NSBI. NSBI may also expand New Initiatives for Fiscal Year 2004–2005 its export services by launching an Entrepreneurial Development innovative new program aimed at helping Building on NSBI’s positive experience with exporters better exploit international trade the EDGE program (Entrepreneurial shows and exhibitions, as well as Development for Global Entrepreneurs) and evaluating a fee-for-service model for trade the IT Boot Camp, further opportunities research. Following is a description of some exist to provide entrepreneurs with access to of these initiatives. 64 the training and development opportunities Crown Corporation Nova Scotia Business Incorporated Business Plans
• Export Prospector—is designed to help to South Carolina in June 2003 and Nova Scotia companies enter new most recently a five-company export export markets. The program’s specific development initiative to New England intent is to help companies gather in early December. market intelligence, leads, and new • ShowStorm!—is an umbrella that covers customers. The process will provide the a new strategic approach for helping company with the opportunity to meet companies at trade shows. Trade shows qualified leads within a structured are an important part of the marketing format in the new export market of the efforts of Nova Scotia companies. client’s choice. Export Prospector was ShowStorm! looks to supplement the delivered through fiscal year natural hands-on strength of the team 2003–2004 as a pilot project with 20 as “trade show experts.” This will be companies enrolled to date. An done through providing support for evaluation of the program was carried trade show identification, company out in August 2003, and the results capability development, trade show were positive: clients appreciated the reconnaissance, and trade show straightforward approach and client intelligence. This is all in response to demand remains high. The most companies’ expressed need for in- common response received during the market assistance and market review process was that both clients information. Elements of ShowStorm! and their consultants found the have been rolled out in 2003–2004, program very flexible and adaptable to including a recent reconnaissance their specific export-related needs. initiative at cdXpo in November in Las Export Prospector is delivered on a Vegas. Plans for 2004–2005 call for an matching-funds basis to an overall emphasis on imparting tactics that NSBI assistance cap of $5,000 per make trade shows work more effectively engagement. for participants on a cost-shared basis. • Prospector Plus—provides six targeted, • Supplier Development—The recent in-market sales call programs for small movement of the province’s procurement company groups. This program offers a framework to the Office of Economic “no frills” approach to the trade Development offers potential for the mission experience, in combination hands-on involvement of the Small with the Export Prospector focused Business Growth group. There are aspects approach to matchmaking. Prospector of the supplier-development process that Plus has been piloted twice in lend themselves well to the hands-on 2003–2004—a four-company mission 65 Nova Scotia Business Incorporated
expertise of the group. In particular, Further, tightening in financial markets NSBI will explore opportunities to continues to hamper the development contribute by of Nova Scotia companies, in particular, young technology-driven enterprises. – promoting awareness—how These companies require seed and procurement works, how to access early-stage capital to grow—the type of tender opportunities, and the capital in critical short supply in Nova importance of quality product and Scotia. Since its inception, NSBI has service been an active equity partner in the – working with and educating Nova province. Through this experience, as Scotia companies well as continued consultations with – encouraging increased export industry associations, stakeholders, and readiness through the supplier businesses, further challenges and gaps development framework in business financing have been identified. In fact, stakeholders have – promoting corporate networking suggested that NSBI should more aggressively support companies’ Financial Services Priorities financial needs in the province by Access to capital continues to be one of the identifying opportunities to take higher most pressing issues facing businesses in risk. Nova Scotia, particularly small, rural, and NSBI will pursue aggressive business knowledge-based businesses. Updated development strategies to place capital research continues to demonstrate the need in the hands of growing Nova Scotia for greater access to growth capital for businesses. Key strategies include businesses; almost half of business identifying new opportunities for respondents cited access to capital as existing clients, developing a network critically important to a small business of referral sources for new business in operating in the province, but only 2 per key strategic areas, and launching cent of these respondents were completely innovative new services that continue satisfied with how their needs are currently to fill gaps for growth capital and meet being met. In addition, recent uncertainty customers’ needs. in financial markets combined with the need for financial institutions to minimize NSBI will also continue to maximize risk and increase shareholder returns portfolio return while adhering to a continues to shrink the availability of responsible risk management capital in Nova Scotia. framework, and continue to improve 66 processes and turnaround time. Portfolio Crown Corporation Nova Scotia Business Incorporated Business Plans
quality will continue to be a priority for NSBI, • borrowing rates established based on further building upon the creation of a risk, term, amortization, and special accounts management function in optionality (e.g., interest capitalization, the past fiscal year, which is responsible for extended amortization) developing workable solutions to challenging Currently, the net new capital available for situations. However, where appropriate NSBI to continue to meet the financing solutions cannot be agreed upon, NSBI will needs of Nova Scotia businesses is $20 make every effort to minimize loan losses. million. Repayments of current investments Nova Scotia Business Fund will be $10 million to $15 million from the existing portfolio, which is reinvested into Financial resources for NSBI’s lending and the fund for a total estimated capital pool investment activities are provided through of between $30 million and $35 million for the Nova Scotia Business Fund on an fiscal year 2004–2005. annual basis. The existing portfolio of 170 companies totals $180 million outstanding New Initiatives and reflects financing commitments in Small Business Lending communities throughout the province and During fiscal year 2004–2005, increased in diverse industry sectors. During the activity is expected on the small business previous planning period, a framework was front, particularly in rural areas, as NSBI developed to provide guidelines for continues to expand its small business investment decisions and the composition lending activity. Prospecting efforts will be of the portfolio: directed to improving reach to viable small • annual sector investment targets: businesses throughout the province. With an active calling program in place, NSBI – foundation 18 per cent will improve on its lead conversion rate in knowledge- 2004–2005 while continuing to refer clients based (IT and life sciences) 20 per cent to other financing sources, which may be better suited for their needs. advanced manufacturing 48 per cent Productivity Enhancement Financial Assistance energy 9 per cent To ensure that small businesses have increased access to capital for productivity other 5 per cent enhancement initiatives that may not be • $15 million maximum per company eligible through traditional forms of
• 25 per cent maximum available for financing, NSBI plans to introduce new working capital/ equity investments productivity financing alternatives. Each 67 Nova Scotia Business Incorporated
investment would generate a positive ROI, rebate—a performance-based investment— and repayment would be benchmarked is paid to companies as they achieve against predetermined milestones. predetermined milestones over a period of time, usually five to seven years. Last year, Small Business Technology Investment Fund NSBI approved $22.5 million in payroll With the recent retreat of the venture rebate commitments to 13 companies. capital market, early-stage businesses have been hard hit. Deal flow has slowed NSBI utilizes SIFs to provide innovative significantly and has yet to rebound. This is financing to companies through not unique to Nova Scotia. In fact, it is a agreements such as payroll rebates. All trend seen across North America. In opportunities that utilize these innovative instances where venture capitalists are financial tools must earn a positive ROI for actually investing, they tend to be in follow- the province, demonstrate incrementality, on rounds for revenue-generating and generate a net economic benefit. By companies. NSBI proposes to create an adhering to these basic principles, NSBI is early-stage/pre-venture fund, the “Small able to balance the need for flexibility in Business Technology Investment Fund,” to meeting a client’s unique business needs fill an investment gap that is currently with the need to demonstrate hindering the growth of Nova Scotia’s accountability to its stakeholders. Strategic knowledge-based economy. investment commitments are undertaken specifically to increase the growth and The Small Business Technology Investment development of strategic business sectors Fund (SBTIF) will provide early-stage high- following a thorough due-diligence process. tech companies with a source of equity to promote new job creation and economic NSBI will continue to focus on business growth. The fund will make early-stage opportunities that demonstrate a positive equity investments in companies that have ROI and to focus on quality business developed innovative technology products or attraction that diversifies the province’s services and that display significant investment portfolio. It is important to note competitive advantage and market that not all key growth industries are at the potential. This initiative is contingent on same level of maturity in the province. finding the appropriate funding mechanism. Consequently, it may be necessary for NSBI to develop new financing vehicles using the SIF. Strategic Investment Funds (SIFs) Strategic investments create tangible returns for the province: clients generate more direct taxes than the amount paid 68 back to them. For example, the payroll Crown Corporation Nova Scotia Business Incorporated Business Plans
Strategic Investment Funds Budget NSBI forecasts $16.2 million for existing commitments and new services to ensure that the organization can improve responsiveness to client needs and improve transactional turnaround time.
Strategic Investment Funds Current year forecast Fiscal year 2004–2005 ($) ($)
Existing commitments 16,500,000 10,200,000
Amount approved by NSBI 1,100,000 6,000,000
Total amount approved 17,600,000 16,200,000
69 Nova Scotia Business Incorporated
Marketing and – enhance the use of multimedia Communications Priorities communication tools, including a new website and quarterly e- Focused marketing and communications newsletter, and through links to activities concentrate on supporting partnering organizations business development initiatives and positioning NSBI as an effective and – proactive media relations planning efficient business-solutions provider for with regards to opinion editorials, companies considering investment in Nova daily features, news releases, and Scotia. This requires building awareness of public relations
NSBI among businesses and other – effective sponsorship planning and stakeholders in the province and increasing implementation to leverage the knowledge of Nova Scotia and its sponsorship fully and equitably business advantages in key markets, through business lines particularly in the US. Although NSBI • Create and enhance marketing and achieved an increase in awareness of its communication tools, events, and services among Nova Scotia businesses and programs to build sales opportunities the general public during the past fiscal for Nova Scotia and our businesses: year, continued emphasis is required to reach out to businesses throughout Nova – create marketing collateral for each Scotia that may benefit from NSBI services. strategic sector of focus
A key area of focus for marketing and – coordinate and implement effective communications in fiscal year 2004–2005 company visit procedures is increasing the support to NSBI’s three – develop and utilize in-market and core business lines. From a corporate sector-specific advertising plan perspective, strategic communications and media relations support, as well as effective – stage dynamic and detailed events government relations and event specific to business development management continue to be a priority. activities in key markets
Goals and objectives include the following: – organize VC East—a venture capital forum for Atlantic Canadian • Increase the visibility and positive companies seeking venture capital awareness of Nova Scotia, its funding and information businesses and Nova Scotia Business Inc. within the province and abroad:
70
Crown Corporation Nova Scotia Business Incorporated Business Plans
– liaise with and leverage the Partners relationships built through the Partnership development is a critical Toronto and Boston (NovaMass) component of NSBI’s business development Business Advisory Groups strategy. Growing and attracting business is • Provide corporate marketing and not solitary work. It requires co-operation communications support: with companies and organizations located
– distribute internal newsletters in here and in target markets. Partnerships partnership with HR expand NSBI’s reach and help promote Nova Scotia and its business strengths – plan and organize internal meetings among key target audiences: potential and events such as annual meetings, clients, business leaders, industry staff meetings, and social events associations, and key federal, provincial, – government relations activities as and municipal leaders. Over the planning required period, NSBI will actively engage key partners in business development strategies – support another successful Export and continue to obtain input on ways to Achievement Awards improve client service. NSBI continues to refine positioning and messages that support the core business areas. Public and media relations will be aligned to support business development efforts in target markets. Three key initiatives are outlined in further detail below.
Partner Category Goal of Partnership Business Attraction Foster strong relationships with economic development agencies and organizations ensuring NSBI access to all relevant investment leads for the province and the information and/or expertise required to take the lead from prospect to client
Small Business Growth Foster relationships with industry associations, regional and community development agencies, and government departments to support and refer NSBI service offerings and export development initiatives Financial In keeping with the mandate of improving access to capital, build close relationships with other financial institutions and funding agencies to increase the total amount of capital accessible to companies and to leverage the risk involved in these transactions. Corporate At a corporate level, foster, support for further development of the NSBI organization and help to build awareness of NSBI’s objectives, mandate and services. 71 Nova Scotia Business Incorporated
outside of the province will be more tightly Organization focused on attracting investment that will NSBI continues to build a professional, augment Nova Scotia’s current industrial experienced, and proactive team. To carry strengths. NSBI’s monthly scorecard out the activities outlined in this plan and monitors activity to ensure that business specifically deliver on the targets outlined development activity is delivering desired in the Outcomes and Performance results. Measurement section requires additional NSBI remains committed to creating a resources from those utilized in fiscal year results-oriented corporate culture where 2003–2004. employees feel challenged and supported on NSBI has completed a review of its both a professional and personal level. The operations and as a result has carried out a previous implementation and ongoing use of reorganization intended to focus all an employee performance management customer-facing activity on recruiting new system, which is linked to the Corporate customers for our Business Attraction, Balanced Scorecard, focuses on the Small Business Growth, and Financial achievement of corporate, team, and Services lines of business. Given that NSBI individual goals. Performance evaluations has a finite level of financial and human continue to provide employee feedback and resources, all activity must be focused on measures to recognize individual results and clients who require our services. The achievements. NSBI continues to enhance reorganization has been discussed in earlier compensation-related programs to reward segments of this business plan. success and achievement. NSBI regularly reaches out to its employees to garner NSBI has invested two years in the feedback on issues or concerns. This is done development and introduction of a through employee surveys, suggestion boxes, Corporate Balanced Scorecard, which and one-on-one confidential meetings. measures progress on identified goals. For Continuous enhancements of internal fiscal year 2004–2005 the scorecard has communications remain a priority and are been enhanced to focus even more on being accomplished through such things as customer-driven results. All NSBI activity an employee intranet, staff meetings, and will be geared towards increasing the client offsite group meetings. The employees of base. Activity within Nova Scotia will be NSBI have and will continue to provide input focused on increasing the number of clients to the corporate planning process. in which NSBI invests and in recruiting new businesses for NSBI to offer its export development services. While activity 72
Crown Corporation Nova Scotia Business Incorporated Business Plans
NSBI recognizes the need to make appropriate investments in employee professional development and training and continuously identifies opportunities to augment skill sets. The corporation is committed to enhancing business services provided to clients and in retaining the tremendous employees that make up the NSBI team.
Budget Context
Budget Summary Forecast Estimate Variance 2003–2004 2004–2005 ($) ($) ($)
Operating Expenses 6,815,000 7,200,000 385,000
Loan Valuation Allowance 2,000,000 1,600,000 (400,000)
Strategic Investments 20,400,000 16,200,000 (4,200,000)
Overall Total 29,215,000 25,000,000 (4,215,000)
73 Nova Scotia Business Incorporated
Following are total requirements to enable Outcomes and NSBI to continue existing activity and Performance introduce new services that address critical Measures gaps in the marketplace for existing and potential clients: This section outlines the planned outcomes 1. Operating Budget $7,200,000 for April 1, 2004–March 31, 2005, with an indication of the strategies that will be used 2. Strategic Investment Funds $16,200,000 to achieve these outcomes. Measures to 3. Loan Valuation Allowance $1,600,000 gauge how well each goal is being met are $25,000,000 indicated with a base for fiscal year 2003–2004. 4. Capital Allocation $20,000,000
The outcomes and measures for the This is a critical year for NSBI—a year in upcoming year reflect NSBI’s commitment which, despite budgetary challenges, it is to measuring results as well as the need to more important than ever to ensure that it ensure that investment attraction efforts is equipped with the resources necessary to result not just in an absolute number of be responsive to businesses and to be new jobs, but in higher-value opportunities. consistent in its approach. This will ensure that continued employment and economic NSBI holds itself to the highest standards of wealth are generated for the shareholders— corporate governance and accountability. all Nova Scotians. Corporate performance is measured, and the organization is committed to delivering a return on investment for shareholders. The corporate outcome measures have been enhanced for the fiscal period to reflect the growing impact NSBI clients are having on the economic growth and prosperity of the province. Their success translates into more tax revenues for the province, which is a source of funding for government priorities.
74 Crown Corporation Business Plans vices, arget Seek new sustainable businesses to relocate or expand in Nova Scotia Find existing international subsidiaries in NS that can expand by capturing more of their parent companies’ capital allocation Develop new FDI strategies based on innovation to offset our dependence on cost-based companies Proactive business meetings Continue to build awareness of NSBI in rural NS Deliver tailored export development ser including Export Prospector and Plus Strategic utilization of SIFs to establish growth industries Sector specific tactical plans • • • • • • • • Strategies to Achieve T argets 2004–05 10 companies $30,000 100 clients 144 40–50% T ear 2003–04 240* *unqualified leads 8 companies 80 clients $25,000 40–50% Base Y mance Measures y of for verage gross salar verage portfolio # of companies that relocate part or all of their operations in Nova Scotia A new jobs created through business attraction and reinvestment # of companies introduced to new markets/further advanced in existing markets # of qualified referrals for export development, investment, or financing A return on investments utilizing SIFs Measure olume and diversity Economic benefit to Nova Scotia FDI in Nova Scotia Fiscally prudent financing Nova Scotia companies expand business within Nova Scotia V of exports Indicator Attract leading-edge, sustainable business investment to Nova Scotia Promote the growth of new and existing businesses in Nova Scotia by enabling them to succeed with business opportunities in both local and export markets Core Business Area Outcomes and Per Goal 2. 1. 75 wards arget s business case Maintain co-investment philosophy New product offerings Sharpened business development focus Present Nova Scotia’ Proactively target/meet with companies and lead-generating Nova Scotia Ambassadors Maintain share of financing to companies in strategic growth sectors Business and community events, e.g., Export Achievement A Communication tools, e.g., website, articles, advertising • • • • • organizations in the US/ Europe • • • • Strategies to Achieve T argets 2004–05 Ratio of 1:1 Range 20–25% 2% 2% 32 financings 300 T ear 2003–04 20 financings 280 Ratio of 1:1 Range 20–25% Business 30% Public 23% Base Y Leverage ratio of partner: NSBI % Nova Scotia Business Fund used for equity/working capital deals % increase over base measure of awareness of NSBI # of financings with new/existing companies (80% in strategic growth sectors) utilizing Nova Scotia Business Fund # of external inquiries on Nova Scotia business capabilities Measure s wareness of NSBI’ Partner for financing solutions Incremental value investment projects Flexible financing arrangements External marketplace awareness of Nova Scotia and its business advantages A role in Nova Scotia Indicator s economy Provide access to capital for new/existing businesses in Nova Scotia, with the intent of enhancing value- added growth for the province’ Increase the visibility and recognition of Nova Scotia—its business climate, advantages and capabilities—at home and abroad Goal 3. 76 4. Crown Corporation Business Plans vice training arget Maximize operating efficiency and cost effectiveness Attract companies to Nova Scotia Help existing companies within Nova Scotia grow Provide financial solutions 5-year cumulative target of 18,000 jobs Expand existing customer ser Provide and promote training educational programs • • • • • • • Strategies to Achieve T argets 2004–05 TBD TBD $7.200 million 80% of employees 3,700 maintained and new 90% TBD T ear 2003–04 3,700 maintained and new 90% TBD TBD $6.815 million 50% of employees TBD Base Y vices otal payroll impact Incremental provincial tax revenues from NSBI clients T of NSBI clients Operate within annual budget % of employee participating in training and development programs # of jobs retained and created by clients % increase of clients who are satisfied with NSBI’ s ser Incremental export sales of NSBI clients Measure vice otal payroll Provincial tax revenues T Business culture— deliver results within cost management structure Jobs within Nova Scotia Customer ser Employee training and development Export sales Indicator formance formance, Develop an action- oriented, client-focused organizational culture that encourages, empowers and supports high per entrepreneurial thinking, professionalism Goal Overall per 5. 77 Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Nova Scotia Crop and Livestock Insurance Commission Business Plan 2004–2005 Table of Contents Mission ...... 81 Planning Context ...... 81 Strategic Goals ...... 82 Core Business Area ...... 82 Prioritites for 2004–2005 ...... 82 Budget Context ...... 84 Outcomes and Performance Measures ...... 86 Crown Corporation Nova Scotia Crop and Livestock Insurance Commission Business Plans
delivery of production insurance programs. Mission Federal and provincial Ministers of Agriculture have indicated their desire to To provide Nova Scotia farm managers expand and strengthen the role of the with insurance products with which program. Production insurance will expand they can manage the financial risk to offer more coverage to commercially associated with reduced crop or animal grown crops and livestock species. The production losses due to insurable perils. commission will develop insurance products for crops and/or production systems that do not conform to conventional production insurance methodologies. The APF also Planning Context suggests that new performance measures be The Nova Scotia Crop Insurance implemented if the province is to maintain Commission was established in 1968 to its federal-provincial cost-sharing provide Nova Scotia farmers the opportunity arrangements. to manage the risk of production failure. The outbreak foot-and-mouth disease The Nova Scotia Crop Insurance Act was (FMD) in Europe in 2002 prompted a review amended in 1978 to provide for the of the commission’s liabilities. The review administration of the Livestock Insurance was completed and a reinsurance was put Program and is now cited as the Crop and in place in April 2003. Within six weeks Livestock Insurance Act. bovine spongiform encephalopathy (BSE) The commission reports to the Minister of was discovered in Alberta. Both diseases are Agriculture and Fisheries and is a key insured perils under the dairy plan. The component of the business risk- commission’s exposure under the Loss of management services that the department Income benefit was over $40 million in offers to the industry. The commission 2002. Changes to the benefit structure in the administers 13 crop insurance plans and a 2003 have limited the exposure, and private dairy livestock insurance plan. Effective April reinsurance protection was purchased for 1, 2003, the Canada–Nova Scotia Crop the 2003–2004 season. Discussions with Insurance Agreement was superceded by the reinsurers and legal counsel have Canada–Nova Scotia Implementation highlighted the need to have an actuarially Agreement, in keeping with the National sound rate-making methodology developed Agricultural Policy Framework (APF). The to ensure the viability of the Dairy agreement outlines cost-sharing Insurance Plan. This was completed in arrangements and administrative 2003, and regulations are being revised to requirements that govern the design and reflect the realities of the exposure to these 81 Nova Scotia Crop and Livestock Insurance Commission
diseases. Upon recommendation of the • To improve service delivery to clients by Dairy Farmers of Nova Scotia (DFNS), the reducing red tape and decreasing turn- commission is seeking to remove BSE and around time on client requests for FMD from its list of insured perils. program improvements.
The commission’s information management systems have been in need of a major overhaul for some time. The backbone of its Core Business information management capabilities is a Area DOS-based relational database, circa 1988. The core business area of the Crop and The software is out of production and no Livestock Insurance Commission is the longer supported by the vendor. The delivery of insurance products for production Resources IT-CSU has ceased software agriculture. Its business is conducted support for this product, leaving the pursuant to federal and provincial commission to arrange its own system regulations and in accordance with the support. This poses a human resources Business Risk Management chapter of the challenge in securing in-house support Canadian Agricultural Policy Framework. personnel and a financial challenge in securing funds to replace the system. The present system does not provide the functionality required to offer the program Priorities for enhancements expected under the APF. 2004–2005 In support of government’s goal of developing a competitive business climate Strategic Goals that encourages economic growth and • To support the economic growth of the increases jobs in Nova Scotia’s rural and province through provision of coastal communities, the commission will insurance products that help to stabilize pursue the following; the incomes of agricultural businesses. Program expansion/enhancements • To expand programming to include new including the following insurance plans under conventional production insurance and introduce • Higher coverage levels (90 per cent of product innovations that broaden the the long-term average production will income stabilization capacity of farm be offered to growers of all crops that fit businesses. within the definition of conventional 82 Crown Corporation Nova Scotia Crop and Livestock Insurance Commission Business Plans
production insurance under the APF term position for a Business Systems Production Insurance Guidelines. Specialist will be replaced with a permanent position. This position will • Weather derivative insurance products provide ongoing support to the current that allow more flexibility in valuing system and lead in-house development underlying assets and in dealing of a replacement. directly with the weather events that cause crop losses will be developed. Red tape reduction • Acreage loss insurance options that are based on the dollar value per acre • The commission will continue to pursue rather than the tonnage produced will a streamlined regulatory process that be developed. will allow more timely responses to client’s product and service requests. • The Dairy Livestock Insurance Plan will be prepared for full cost sharing under • In spring 2004, the commission will the APF; this will allow producers to again request a revision of the Crop take advantage of the 60 per cent and Livestock Insurance Act, which will government cost sharing on premiums. allow the commission to deliver its products in a manner consistent with • Livestock insurance plans will be insurance industry standards. This will developed in consultation with include the ability to revise premium commodity groups and in compliance rates and unit prices annually with national guidelines. according to actuarially sound methodologies and to do so in a timely Information technology manner so as to offer clients insurance • In an effort to improve customer service coverage based on current market and and administrative efficiency and to risk conditions. reduce response time to stakeholder • The commission will continue to inquiries, the commission will replace its update its regulations to reflect modern database platform. The current software language and to more clearly describe is no longer supported by IT-CSU, and how its programs effect client risk private-sector support is not readily management options. available. Program enhancements/ improvements cannot be facilitated within the current software architecture. A search for off-the-shelf replacements has been conducted without success. A 83 Nova Scotia Crop and Livestock Insurance Commission
Budget Context The commission budget is included in the budget estimates of the Department of Agriculture and Fisheries. The Implementation Agreement under the APF provides for reimbursement of 60 per cent of the administrative costs relative to production insurance. Premiums paid by clients and by the federal government are not included in the budget figures.
Operational priorities outlined above have been costed and included in the budget estimate. The expected total cost of replacement of the information management system has not been included in these estimates, but rather, work will proceed in phases as system development is contracted to external contractors.
84 Crown Corporation Nova Scotia Crop and Livestock Insurance Commission Business Plans
Estimate of Income and Fund Balances
Forecast 2003–04 Estimate 2004–2005 ($ ,000) ($ ,000)
Revenues
Insurance Premiums Paid by Clients 480 358 Insurance Premiums Contributed by Federal Gov’t 240 322 Insurance Premiums Contributed by Provincial Gov’t 240 215 Interest Income 210 205 Total Revenues 1,170 1,100
Expenses Indemnity Claims 960 1,000 Reinsurance premiums 197 200 Bad Debt Expense 5 5 Total Expenses 1,162 1,205
Net Income From Insurance Activities 8 (105) Crop and Livestock Insurance Fund Balance Beginning of Year 6,298 6,306 End of Year 6,306 6,201
Administrative Expenses Government Contributions (Canada) 493 501 Government Contributions (Nova Scotia) 330 392
Total Administrative Expenses 823 893
Net Govt Expenditure Canada (Premium + Administration) 733 823 Nova Scotia (Premium + Administration) 570 607
Total Program Expenditure 1,303 1,430
85 arget y Insurance plan into APF platform ork with Regulation and Compliance Branch the Department of Justice to Introduce weather derivative products for forage Introduce acreage loss program for vegetables Replace information management software to allow in-house program modification W speed up review of regulations and to amend the Crop Livestock Insurance Act to allow the commission deliver its products in a timely manner Improve program effectiveness through higher unit prices and increased coverage options Higher unit prices and coverage options Increase maximum allowable coverage to 90% for all eligible crops Bring Dair • • • • • • • • Strategies to Achieve T arget 560 79% $20 million 17 4 2005–06 T arget 520 78% $18.1 million 15 6 2004–05 T mance Measures for 500 76% $14.1 million 12 12–18 Data Number of farms using crop insurance Aggregate coverage level for program $ value of coverage Number of insurance products available Months elapsed from commission approval to program implementation Measure Core Business Area Outcomes and Per Outcome 86 Increased stability of farm businesses Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Nova Scotia Farm Loan Board Business Plan 2004–2005 Table of Contents Mission ...... 89 Introduction ...... 89 Planning Context ...... 90 Strategic Goals ...... 92 Core Business Areas ...... 93 Priorities for 2004–2005 ...... 94 Budget Context ...... 96 Outcomes and Performance Measures ...... 99 Crown Corporation Nova Scotia Farm Loan Board Business Plans
1,134 loans. Including lease property Mission accounts, total lending to agriculture represents approximately 32 per cent of the To promote, encourage, and support the debt capital of Nova Scotia farmers. Timber development of agricultural and timber loans provided to forest mills to ensure a businesses in Nova Scotia. sustainable wood supply totalled $1.8 million to a total of 20 accounts.
Primary stakeholders in board operations Introduction include individual and potential borrowers and the province, in particular the Active for more than 71 years, the Nova Departments of Agriculture and Fisheries, Scotia Farm Loan Board is an agricultural Natural Resources, and Finance. Other development agency acting to build greater important stakeholders include the Nova prosperity by supporting agricultural and Scotia Federation of Agriculture and the rural business development, by providing various commodity groups, commercial long-term loans at fixed interest rates, and lenders, equipment and feed suppliers, the through financial counselling services. A wholesale and retail sectors for products corporation of the Crown, the board is an produced in Nova Scotia, and others integral part of the Nova Scotia Department concerned with economic development of Agriculture and Fisheries and also within rural areas. operates as the Timber Loan Board. The board operates as a corporation of the Availability of credit with stable long-term Crown under the authority of the Agriculture rates and understanding of the agricultural and Rural Credit Act, Revised Statutes of Nova industry including cyclical swings in Scotia 1989, Chapter 7. This act emphasizes profitability are considered to be strengths rural development and the effective use of of the board in encouraging development credit to develop rural Nova Scotia of this industry. The Timber Loan Board’s authority is from Operations and interest rates are managed regulations made pursuant to the Revised so as to cover all direct costs of operation Statutes of Nova Scotia, 1989, the Forests Act and provide a modest net income, which in Section 20 of Chapter 179. This act offsets indirect costs of services provided by provides for credit to acquire forested land government to the board and provides for forest product mills. resources for maintenance of systems and operations. At last year-end, the board’s net farm loan portfolio totalled $157 million in 89 Nova Scotia Farm Loan Board
Five board members, with successful careers beef and competing products, affecting in agriculture and business, govern policies, Nova Scotia cattle and hog producers very receive reports on operations and clients, directly, and have reduced the value of cull and provide strategic direction for the board. cattle to dairy producers. September’s Board members are appointed for terms of Hurricane Juan caused considerable up to five years by Governor-in-Council and damage to buildings, crops, and woodlands are accountable to the Minister of the through an important agricultural section Department of Agriculture and Fisheries. of the province. Although insurance and Day-to-day loan operations are delegated to government compensation has helped, staff who are responsible for ensuring that some clients have arranged deferral of loan conduct, management, and operations meet payments, and others may need to pursue board and provincial requirements. other options to refinance their operations.
Requirements for board financing are influenced by levels of investment in Planning Context agriculture and timber businesses, rates of capitalization, general economic conditions, External Context and the availability of funding from The agricultural industry is affected by commercial lenders. local weather and other conditions Interest rates remain low since declines affecting production and by conditions in during the previous two fiscal years. The competing regions that may affect general Bank of Canada overnight rate has price levels for commodities produced, as declined during the year from a high of well as market conditions, including the 3.25 per cent to a March 2004 value of 2.25 effects of branding, consolidation and per cent. Lending rates remain low relative national purchasing, and market access. to historical rates, with January–March For the most part, general climatic 2004 Farm Loan Board rates only 30 basis conditions were favourable in Nova Scotia points above their lowest levels since rates during the past year. Weather patterns do became linked to matched funding remain a concern to agriculture, in provided by the Department of Finance in particular, recent water shortages affecting 1997. US rates remain low as well with the some sectors and regions. federal funds target rate declining from The bovine spongiform encephalopathy 1.25 per cent to 1.00 per cent. The interest (BSE) case in western Canada and the more rate situation presents an opportunity for recent case in the United States have those requiring long-term financing, and resulted in a decline in producer prices for will tend to support acceleration of capital 90 investment and the trend towards greater
Crown Corporation Nova Scotia Farm Loan Board Business Plans
reliance on technology. Rates for short-term Short-term rates did not rise as expected and variable-rate loans remain during the past fiscal year. Although some significantly below long-term rates such as clients still show a preference for short-term those generally provided by the board, or variable rates offered by commercial although the gap has narrowed somewhat. lenders, the demand for longer-term loans has stabilized. It is anticipated that the The board offers only fixed-interest loans board will advance $27 million in the with rates fixed for the full amortization current fiscal year for a net increase in the period of the loan. Variable rates or term loan portfolio of $7 million. Requirement lengths of less than the amortization period for board funding is expected to increase to are not offered, because it is felt that those approximately $30 million in 2004–2005. alternatives increase the risk that clients will be unable to meet future loan payments if rates increase. In order to meet client needs for shorter-term funds a new one- to five-year loan has been introduced. Rates are generally established on a quarterly basis for periods of 1–5, 6–14, 15–19, and 20–24 years.
Interest Rates Offered by the Board during the Year
Term April 1, 2003 to July 1 2003 to Oct. 1, 2003 to Jan 1. 2004 to June 30, 2003 Sept. 30, 2003 Dec. 31, 2003 Mar. 31, 2004
1 to 5 years 6.25% 5.25% 5.25% 5.55%
6 to 14 years 6.55% 5.70% 5.70% 6.00%
15 to 19 years 7.10% 6.30% 6.30% 6.60%
20 to 24 years 7.30% 6.60% 6.60% 6.90%
91 Nova Scotia Farm Loan Board
Technology is providing for increased The board recognizes that training and mechanization and automation and is development are an ongoing requirement being felt in a wide range of applications. in order to understand client issues, identify This trend is supporting a broader trend and use best lending and administrative toward consolidation of agricultural practices, and maintain a professional operations into larger units in attempts to staff. Organizational practices must be gain efficiency through economies of scale. maintained to operate as efficiently as Larger operations present greater difficulties possible and must provide a level of service in providing for intergenerational transfer of comparable with industry standards. family businesses, which must be addressed. Sound environmental and business- Requirement for loan capital by the forestry planning practices and procedures will sector continues to be of interest to the continue to be recognized as basic criteria board, both in response to need of the for funding proposals and in general industry itself, but also because of the recommendations to clients, in order to relationship between forestry and support industry and individual growth agriculture. Many farms include woodland and sustainability. as part of the overall operation, and Professional staff, knowledgeable about the forestry management parallels crop industry, will provide business counselling management in many aspects, including services to clients, especially new entrants, to some equipment. ensure that support is maintained, learning The provincial budgetary situation requires continues, and stronger businesses are that the goals of each government entity be developed. Additional options to reduce risk met in a cost-effective manner. The board for beginning farmers will be investigated as will seek to further these requirements by identified during this process. presenting a positive net income on lending operations. Strategic Goals Ongoing Planning Focus The Nova Scotia Farm Loan Board Through its ongoing operations the board contributes directly to achievement of the will continue to counsel clients and assess goals of the Department of Agriculture and new proposals by applicants as part of the Fisheries through its own goals, which are service provided by loan officers during as follows: contact with clients and potential clients. • Ensure industry access to stable, cost- effective, long-term developmental 92 credit. Crown Corporation Nova Scotia Farm Loan Board Business Plans
– to create conditions that help the rural economy grow, support Core Business sustainable and environmentally Areas responsible development of agricultural industries, and support 1. Lending development of a competitive Providing long-term credit for business climate to support development of agricultural and economic growth and increase jobs timber businesses is the primary in rural communities mandate of the Farm Loan Board. This • Assist in identification and analysis of includes loan service development, growth opportunities for rural client service and administration, and industries by promoting the use of efficient and responsible financial financially sound business principles. management and also includes the
– to meet industry needs through distinct but closely integrated area of provision of training and counselling financial counselling. to clients and sponsoring and The financial counselling function is promoting learning opportunities provided by loan officers in conjunction within the agricultural community with meetings with clients and potential
• Demonstrate sound financial clients and includes assessment of administration, efficiency, responsibility projects under consideration. Loan in administration of public funds, and officers assist in sourcing the best accountability in the board’s own available credit, as well as promoting operations. and participating in industry seminars and workshops. – to generate a positive net income as reported in published audited By providing a reliable source of long- financial statements term credit the board directly provides for development and growth of the – to administer programs within agricultural and timber industries and guidelines and budgets indirectly influences credit availability – to measure and report on key success at reasonable rates through influence factors on, and partnership with, other participants in the lending industry.
93 Nova Scotia Farm Loan Board
2. Programs Administration financing. High requirements are expected as short-term rates move Programs administration involves the closer to long-term rates in the future. development and implementation of departmental loan-based assistance Total farm debt required by Nova programs in areas related to the Scotia farms grew 50 per cent between board’s financial operations and 1996 and 2001. Given the historical expertise, such as the New Entrants to rates of growth in agricultural capital Agriculture Program. requirements, $30 million of new loans will result in the board providing approximately 30 per cent of total Priorities for agricultural lending in Nova Scotia. 2004–2005 • Continue to work with the Department of Natural Resources to enhance 1. Lending services to modify products and services to meet needs for growth and • Provide $30 million of new loan capital development within this industry to the agricultural and timber industries in the 2004–2005 fiscal year • Enhance client service and administrative efficiency by implementing new The focus is on development and long- technology and systems term stability. Projections indicate that loans advanced will total $27 million Loan accounting and lending support and principal repayments $21 million systems require renewal. A joint project in 2003–2004. With both advances and with the Fisheries and Aquaculture Loan repayments above original budgets, Board for implementation of a this represents a net decrease of $1 replacement system is planned for the million from original expectations. 2004–2005 fiscal year, pending approvals. This will improve service to While mortgage rates of similar terms clients and increase efficiency and are comparable, commercial lenders reliability. Most of the purchase cost of a continue to offer short-term and complete integrated loan management variable-rate loans at rates significantly system will be funded through the below board loan rates. It is believed board’s retained earnings held in reserve that the financing requirements met by the Department of Finance. temporarily by short-term loans have simply deferred demand rather than 94 eliminated the need for long-term Crown Corporation Nova Scotia Farm Loan Board Business Plans
A new loan management system will • Red tape reduction priorities replace the current network of DOS- Board regulations are in place to based applications, spreadsheets, permit the activities of the board rather manual functions, and in-house than to regulate businesses. Clients database applications that are now have been encouraged to make required and that constrain the board’s payment by pre-authorized payment flexibility in meeting client needs. rather than cash or cheque (which are • Manage accounts such that write-offs still accepted). System changes noted and arrears remain stable in relation to above will give the board greater the portfolio size while maintaining a capacity to provide clients direct access “patient lender” approach by to their own information, although this supporting industries through cyclical will not be available for some time. downturns.
This approach includes accurate and 2. Program Administration appropriate appraisal and evaluation • Administer a New Entrants Program in of security arrangements for loans, concert with the Nova Scotia monitoring arrears, and financial Department of Agriculture and Fisheries counselling, particularly for new This revised program, now in its third clients, and clients identified as having year, provides assistance with loan financial difficulty. interest. It is intended to assist Lending will continue to be directed approximately 50 new entrants to toward viable enterprises and projects agriculture, including approximately that are able to provide acceptable 25 intergenerational transfers, in order security to support the loan. During to provide long-term stability and financially difficult times the board is renewal of farm ownership. committed to assisting those operations • Explore flexible loan programs and that appear to have a long-term future continue to review the needs and and a commitment to meet their potential for expansion and obligations. This may include deferral development of industry sectors in of payments, restructuring of debt, partnership with the Department of financial counselling, or referral to Agriculture and Fisheries and Nova other relevant services. Scotia Federation of Agriculture
95 Nova Scotia Farm Loan Board
This will require consultation with Significant portions of the board’s expenses, industry representatives as well as most notably insurance costs under the those of other departments. Additional board’s life insurance program and bad- avenues for support include further debt expense are somewhat unpredictable development of the New Opportunities and beyond short-term control. Loan Program for other sectors (now The first known loss on the self- available to beef producers) and the administered group life insurance program Hog Loan Support Program. No offered by the board occurred during additional budget funding would be 2003–2004 as the result of higher-than- required for this type of program as usual death claims. Actuarial advice is to these loans can be managed through expect variations in results of this program the existing process. from year to year.
During the 2003–2004 year, the board’s Budget Context provision for doubtful accounts was reviewed and determined to be significantly over-funded. An adjustment, reducing the 1. Lending reserve, has been included in the current The board funds loans by arranging year’s forecasts. This adjustment is a one- financing through the Department of time entry and will not have any affect on Finance for terms similar to loans issued on future budgets. a quarterly basis under an arrangement established in 1997. This arrangement allows the board to track and report an interest cost that is directly related to the revenue generated and to report a net income including interest margins.
The funding arrangement has allowed the board to move from net losses prior to the arrangement to a net income position. The board reported a net income of approximately $2 million in the most recently completed fiscal year (2002–2003). Forecasts indicate positive returns to the province for the current year (2003–2004) and subsequent years. 96 Crown Corporation Nova Scotia Farm Loan Board Business Plans
Operational Income Statement
2001–2002 2002–2003 2003–2004 2004–2005 Actual Actual Forecast Description Estimate ($ 000) ($ 000) ($ 000) ($ 000) 13,213 12,203 11,866 Interest 12,300 169 159 (204) Insurance Operations 190 467 630 558 Fee Revenue / Recoveries 415 13,849 12,992 12,220 Total Revenue 12,905
(10,677) (10,420) (9,924) Interest (10,200) (835) (944) (1,020) Salaries and Benefits (1,028) (972) (595) 1,000 Bad Debt Expense (530) (157) (161) (189) Other Operating (163) (12,641) (12,120) (10,133) Total Expenses (11,921)
1,208 872 2,087 Income before Govt. Contribution 984 992 1,105 1,209 Government Contribution 1,186
2,200 1,977 3,296 Net Income 2,170
Note: See Year-end Financial Statements for complete financial information and notes.
Interest expense is established under terms of a Memorandum of Understanding arranged with the Department of Finance.
97 Nova Scotia Farm Loan Board
2001–2002 2002–2003 2003–2004 2004–2005 Actual Actual Forecast Estimate ($ 000) ($ 000) ($ 000) Description ($ 000)
Capital Funds 171,888 172,782 170,262 Opening Principal 176,690 24,040 21,864 27,000 Add Loan Advances (excl property accts) 30,000 (23,000) (23,473) (21,500) Less Repayments (excl property accts) (18,000) 210 (717) — Other — (356) (194) (322) Less Accounts Written Off (500) 172,782 170,262 175,440 Closing Principal 188,190
Allowance for Doubtful Accounts 6,957 7,506 7,907 Opening Allowance 6,585 (356) (194) (322) Less Accounts Written Off (500) 905 595 (1,000) Additions (Bad Debt Expense) 530 7,506 7,907 6,585 Closing Allowance 6,615
165,276 162,355 170,105 Net Portfolio at Year End 181,575
2. Program Administration
2001–2002 2002–2003 2003–2004 2004–2005 Actual Actual Forecast Estimate ($ 000) ($ 000) ($ 000) Description ($ 000)
872 617 500 New Entrants to Agriculture Program 600
Total Staff 19.3 19.3 19.3 Staff—FTEs 19.3
98 Crown Corporation Business Plans y arget y ownership Maintain interest rate margins in accordance with regulations while matching draws used to fund loans as closely possible issued in term and amount Minimize operating expenses by efficient structure, practices, training, and electronic systems Have reasonable long-term interest rates Have trained professional staff available to identify and meet needs for financial counselling and loan assistance Provide $30 million in new capital support to the industr Explore additional opportunities and loan products (e.g., New Market Opportunity Loans) Facilitate transfer of Landbank and ARDA lease program properties to industr • • • • • • • Strategies to Achieve T 2 arget 2005–06 Original: 37% 2004 adj: 30.0% 0.5% or above T 2 arget 2004–05 0.5% or above Original: 37% 2004 adj: 30.0% T 1 mance Measures Base: 1998–99: 0.1% 1999–00: 0.9% 2000–01: 1.1% 2001–02: 0.7% 2002–03: 0.5% 2001–02: 0.7% 2002–03: 0.5% Forecast 2003–04: 1.34% (0.5% after adj for unusual items) Base: 2000: 37.5% 2001: 34.8% 2002: 31.8% Projected 2003: 30.4% Data for centage of cial lenders. Measure Net income (before government contribution) as a % of the average active loan balance FLB loans as a per total NS farm debt (based on calendar year data) Lending y Revised downward from 37.0 per cent to reflect corrections data and exclusion of timber loans. Originally targeted at 37 per cent, targets for this measure are now reduced from 34.5 cent and 36.5 respectively presented last year in light of continued low short-term interest rates and growth in loans provided by commer Core Business Area 1 Outcomes and Per Outcome 1 2 Efficient program deliver Stable, long-term credit available 99 y cial lenders to ces arget y resour vice results with commer vey results Monitor sur Review procedures for efficiency gains Compare ser identify priorities for improvement Implement follow-up visit policies and track monitor follow-up visits Monitor arrears Refer clients to industr Clear up existing accounts in process for recover • • • • • • • Strategies to Achieve T arget 2005–06 90% or above Original: 2.5% or less 2004 adj: 3.1% or less 2.5% or less T 3 arget 2004–05 90% or above 2.5% or less Original: 2.5% or less 2004 adj: 3.1% or less . T y Base: 2000–01: 92% 2001–02: 92% 2002–03: 96% Projected: 2003–04: 93% Base: 2000–01: 2.1% 2001–02: 2.5% 2002–03: 2.4% Projected: 2003–04: 2.6% Base: 2000–01: 2.2% 2001–02: 3.3% 02–03: 3.5% Projected 2003–04: 3.3% Data , centage of centage of value all vey Measure promptness, knowledge, commitment on client sur Combined courtesy Arrears (>$100) as per accounts Defaulted accounts held as real estate as per total of all accounts Lending Increased from 2.5% or less in light of high current value now held as real estate for recover Core Business Area 1 Outcome 3 Client satisfaction 100 Successful clients (as indicated by the proportion of accounts in difficulty) Crown Corporation Business Plans ces through development arget y organizations and representatives y awareness and monitoring suitability through Monitor programs in comparison to budget monthly Identify additional funding sour and application of federal/provincial funding agreements Identify appropriate modifications to existing programs Identify additional funding and support mechanisms Counselling by professional loan officers Industr consultation with industr • • • • • • Strategies to Achieve T arget 2005–06 50 ($ ,000) 600 T arget 2004–05 ($ ,000) 600 50 T ogram s Pr ($ ,000) Base: 2000–01: Expended: 706 Budget: 600 + 106 = 706 2001–02: Expended: 856 Budget: 600 + 256 = 856 2002–03: Expended: 611 Budget: 600+11 2003–04 Projection: Expend: $550 Budget: $600 Base: 2000–01: 48 2001–02: 55 2002–03: 50 Projected 2003–04: 40 Data otal program expenditures Measure T as compared to budget Number of approved applications ograms Administration - New Entrant’ Pr Core Business Area 2 Outcome Prudent financial management New entrances facilitated 101 Crown Corporation Business Plans arget y succession management workshops Program provides interest rate assistance for first two years on loans acceptable to a lending agency with expectation of repayment Requirement for business plan Counselling family farm enterprises Support for industr • • • • Strategies to Achieve T arget 2005–06 25 80% T arget 2004–05 N/A 25 T ogram s Pr N/A 2000–01: 29 2001–02: 18 2002–03: 18 Data centage of Measure Number of new entrants remaining in farming after 5 years as a per those who started Number of transfers to younger family members using this program ograms Administration - New Entrant’ Pr Core Business Area 2 Outcome Increased interest in farm ownership 102 More farms remain in family hands, succession planning is encouraged, and pace of consolidation reduced Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Nova Scotia Film Development Corporation Business Plan 2004–2005 Table of Contents Mission ...... 105 Introduction ...... 105 Planning Context ...... 106 Performance in 2003–2004 ...... 108 Strategic Goals ...... 110 Core Business Areas ...... 111 Priorities for 2004–2005 ...... 114 Budget Context ...... 115 Growth of Nova Scotia Film Industry ...... 117 Outcomes and Performance Measures ...... 118 Crown Corporation Nova Scotia Film Development Corporation Business Plans
The Chief Executive Officer reports to the Mission board and has chief responsibility for all programs administered by the corporation. To grow Nova Scotia’s film, television, and new media industries with our Legislation and By-laws partners by stimulating investment Nova Scotia Film Development Corporation and employment and by promoting Act—Bill No. 42 Nova Scotia’s producers, productions, By-laws of the Nova Scotia Film locations, skills, and creativity in Development Corporation global markets. Nova Scotia Film Industry Tax Credit
Role
Introduction The corporation provides financial, Following a study evaluating the economic development, and marketing programs to potential of the film and television industry the local film industry. Its financial in Nova Scotia, the Nova Scotia Film programs provide first-in funding, which is Development Corporation (NSFDC) was then used to leverage funds available created in 1990 under the Film Development through federal programs, such as Telefilm Corporation Act as a provincial Crown Canada and the Canadian Television Fund, corporation. The corporation reports to the and private sources, such as broadcasters, Minister of Economic Development. distributors, and investment funds.
A board appointed by the Governor in The corporation’s investment funds are Council directs the affairs of the corporation. used to generate production, which results Members of the board are appointed for up in job creation and supply consumption. Its to three-year terms and may be appointed development programs are of a product for no more than two consecutive terms. The nature as well as training and administration of the corporation and its development. The marketing programs are programs and the implementation of the designed to raise the profile of Nova Scotia’s board’s decisions are carried out by the Chief film industry, create access to decision Executive Officer assisted by full-time staff makers for local producers, and market the including Director of Finance, Program province to foreign studios, broadcasters, Administrator, Locations Officer, distributors, and producers. Communications and Locations Assistant, Finance Assistant, and Office Administrator. 105 Nova Scotia Film Development Corporation
The NSFDC is also the “go to” resource for ensure that all aspects of the industry are both local and foreign production covered, including provincial and federal communities. It provides liaison services government, labour, education and between industry and government where training, industry, financing, and necessary and networks producers with one infrastructure development. A stakeholder another. task force has been struck with membership from a cross-section of industry groups and As a result of market conditions over the government, including representatives past several years, there have been from each of NSFDC, the Office of Economic significant declines in film production Development, the Department of Finance, activity across the country. Until the current ACOA, Stewart McKelvey Stirling Scales, year, Nova Scotia’s industry has been NSCAD University, indigenous producers, relatively unaffected by these conditions, CBC Television, Atlantic Filmmakers and production levels have remained at Cooperative, the Film Advisory Committee, healthy levels with some degree of Telefilm Canada—Atlantic Region, CTV fluctuation. Production levels are forecasted Television, the Independent Film Channel, to reach $100 million for the year ended RBC Financial Group, the Nova Scotia March 31, 2004, down significantly from Community College, and, representing the $120 million the preceding year. unions, ACTRA and IATSE 849. In an effort to address this development, the NSFDC has recently embarked on an initiative that will guide the future growth Planning Context of the industry, provide an analysis of the The Nova Scotia Film Development economic value and benefits of the film Corporation has two interrelated industry to Nova Scotia, and create an approaches to development of the film Industry Development Strategy that will industry in Nova Scotia. The corporation’s provide a blueprint for stakeholders to financial programs are aimed at develop and grow Nova Scotia’s film indigenous filmmakers, and they include industry in a united manner, which will equity investments, development loans, position the province as a leader in global new media equity investments, feature film markets. A coordinated effort among all distribution assistance, CBC/NSFDC Bridge stakeholders of the industry will enable the Award, sponsorship and training awards, film industry to move forward on a directed and travel/market assistance. Additionally, path with all efforts working in unison to the Nova Scotia Film Development the benefit of the community at large. The Corporation administers the Nova Scotia industry-wide strategy for the film industry Film Industry Tax Credit Program. 106 involves a broad stakeholder group to Crown Corporation Nova Scotia Film Development Corporation Business Plans
The corporation makes its investment Locations packages include information on decisions with the following outcomes in Nova Scotia, services available, locations mind: employing Nova Scotians; spending photographs, and the Nova Scotia Film and funds in the province; promoting the Video Production Guide. The corporation province internationally with positive spin- produces this high-quality informative guide offs resulting in other areas, such as to film and television production in the tourism; allowing Nova Scotians to tell their province, which is a key tool used by unique cultural stories; and demonstrating producers and production companies when an opportunity for the corporation to considering shooting in Nova Scotia. recoup some or all of its investment. The Locations and Marketing Department is Local filmmakers employ residents of the responsible for fostering strong community province all year, train these employees in relationships with the various regions the skills required for film production, tell throughout Nova Scotia (primarily through local stories, and create Nova Scotia Regional Development Authorities), as well intellectual property, which guarantees as organizations that have or could have reinvestment of profits back into the involvement in the film industry, typically province. In addition, local producers through locations. These include, but are not create the industrial base required to limited to, federal, provincial, and municipal support the foreign or guest production government departments. The primary activity that takes place in the province. purpose of these relationships is to educate target audiences about the economic benefit The Programs Department works closely that film production will bring to their with producers, providing ongoing communities/organizations; promote, coaching and support in the areas of collectively, the various regions of the development and production financing. province in an effort to attract production; The second category of programs involves a ensure that communities, organizations, and Locations and Marketing Department, individuals are familiar with filming which markets the province as a place to procedures so they are prepared to handle film. The efforts of the Locations and productions prior to and upon their arrival; Marketing Department result in attracting ensure fair and equitable treatment both for fully financed films and co-productions to communities/organizations and the Nova Scotia. The Locations and Marketing productions themselves and to mediate any Department maintains an extensive library concerns that may arise; and ensure that the of photographs representing the entire corporation is aware of policies, guidelines, province, and the corporation fills numerous and applications that exist so that its clients’ location requests throughout the year. questions can be effectively answered. 107 Nova Scotia Film Development Corporation
The Locations and Marketing Department generating $120 million in combined is responsible for fostering strong industry production activity and employing between relationships with the various industry 1,600 and 2,000 Nova Scotians. organizations that represent industry personnel involved in production activity. These include, but are not limited to, Performance in ACTRA, IATSE 849, IATSE 667, and the 2003–2004 DGC. The primary purpose of these relationships is to: solicit input from the (Projected to Year End) private sector on best approaches for marketing and promoting the province; To date in 2003–2004, 37 projects have give and receive feedback on industry issues been supported, which includes equity and past production activity; work together investments in two feature films, nine in securing productions for the province; television series, two television mini-series, and update the respective stakeholders on 16 television specials, seven development current production interest and activity. projects, and one new media project. Documentary, drama, children’s, comedy, The Finance Department strives to process lifestyle, and music variety genres are tax credit applications in a timely manner represented by these projects, resulting in in order to meet producers’ expectations. $33.5 million in production activity for The film industry tax credit is a crucial local companies, of which $25.7 million is financing tool used by both local and guest spent directly in the province of Nova filmmakers. Ensuring that the tax credit Scotia. The corporation has also supported remains competitive with other provinces one major sponsorship and four will be a priority of the corporation. Partnerships in Training with total budgets Investing in both local filmmakers and of $1.7 million. locations marketing contributes to the The corporation partnered with CBC development of a stable film industry in Television, Atlantic Region, to sponsor the Nova Scotia. In 2002–2003, the corporation CBC/NSFDC Bridge Award for two had $2.3 million available for industry emerging producers. Emerging producers investment activities and $155,000 available Sonya Jampolsky and Jay Dahl were each for marketing activities. In addition, local awarded a $30,000 Bridge Award. and guest producers accessed a combined $8.9 million through the Nova Scotia Film In 2003–2004, the corporation invested in Industry Tax Credit. During this same time NextDoc Training and Production Program period, 96 local projects were supported, and and a Scholarship/Mentorship Program 108 13 guest productions shot in the province, (through the Centre for Art Tapes), Totally Crown Corporation Nova Scotia Film Development Corporation Business Plans
Television (through the National Screen To date, the corporation has received and Institute), and Film and Television broken down 38 out-of-province scripts for Professional Development (through feature films, movies of the week (MOWs), Moving Images Group). or series. In addition, 58 general location inquiries have been received. Guest Through its Feature Film Distribution productions include six MOWs, one Assistance Program, the corporation has animated series, and one television mini- supported one feature film with a series. The guest productions to date have marketing budget of $369,000. The resulted in approximately $51.1 million of program is available to support the production activity and $20.9 million of theatrical release costs of a Nova direct spending in the province. Scotia–produced dramatic or animated feature film in which the corporation has In September 2003, the corporation hosted an Equity Investment. The goal of the the Vice President, Production, of MGM- program is to enhance the marketing Television on a tour to familiarize him with campaign for feature films and increase the the province’s locations potential and film Canadian box office returns. industry infrastructure.
The corporation sponsored bi-monthly The corporation partnered with the other screening nights, which are open to the three Atlantic Canada film agencies, through public and provide an opportunity for Atlantic Canada Film Partners, to access Nova Scotian filmmakers to discuss their ACOA funds for marketing the provinces as works and showcase them to the local film locations. The corporation uses these community. In addition, the corporation funds to cover costs incurred by producers partners with Empire Theatres to display attending film and television festivals. The longer form works at the Oxford Theatre on corporation provided travel/market a quarterly basis. assistance to approximately 43 filmmakers during the 2003–2004 fiscal year. The corporation sponsored the 23rd Atlantic Film Festival held in September. In The corporation met with independent partnership with the Atlantic Film Festival producers and several US broadcasters in and Empire Theatres, the corporation New York in September 2003 as a follow-up sponsored a Celebration of Nova Scotia to groundwork laid during a previous trade Filmmakers, a two-day screening opportunity mission. for local productions held in November. The One of the major challenges faced by Nova screenings included one feature film, four Scotia’s filmmakers is the distance between documentaries, and one episode each from them and the broadcasters and distributors, five different television series. which are located in Toronto or Montreal. As 109 Nova Scotia Film Development Corporation
a service to Nova Scotian filmmakers, the In an effort to streamline the Film Industry corporation hosts Broadcaster/ Distributor Tax Credit process, the corporation has Forums where key decision makers from each hired a Finance Assistant. This position is of the major broadcasters and distribution dedicated to processing tax credit companies are brought to Halifax for two applications. To date, the corporation has days. During these two days the broadcasters registered 42 eligible productions for the and distributors meet with Nova Scotian Nova Scotia Film Industry Tax Credit (Part producers and allow them to pitch television A), and 71 final certificates (Part B) have show or feature film proposals. These forums been issued for a total of $13.3 million. have been very successful, and without exception, producers have been able to access licence fees or development monies as a Strategic Goals result of these events. A forum was held in • Cultivate the economic and export November 2003. potential of Nova Scotia’s film, The corporation, through industry television and new media industries. consultation, also identifies gaps in the • Provide or support mechanisms for industry and organizes and hosts a two-day advancement of Nova Scotia’s film, Business Issues seminar each December, television, and new media industries. providing relevant industry expertise to local producers. This entrepreneurship • Provide effective corporate service and training assists Nova Scotia producers in accountability to government and competing in the global film industry. industry stakeholders.
The corporation’s website has been redesigned to provide a user-friendly format. The production guide is now available online, which allows easy access by both local and foreign producers. A digital library is in the process of being implemented and will be fully functional by 2005–2006.
To promote transparency and accountability, the corporation’s Routine Access Guidelines and Annual Report have been made available on its website. 110 Crown Corporation Nova Scotia Film Development Corporation Business Plans
Bridge Award Core Business The corporation partners with CBC Areas Television, Atlantic Region, to provide the CBC/NSFDC Bridge Award for emerging 1. Economic and Export Potential producers. This juried program is designed to assist emerging producers in entering the Develop Nova Scotia’s film, television and industry. Successful applicants receive a new media industries, with priorities $5,000 CBC broadcast licence, a $15,000 including the following: NSFDC equity investment, and $10,000 in Investment Programs services from the CBC. Two awards are Equity Investment, Development Loans, offered in February each year. and New Media Feature Film Distribution Assistance Program The corporation will invest in a qualifying The corporation offers a Feature Film Nova Scotia film production up to 40 per Distribution Assistance Program. The cent of the production budget spent in the program supports the theatrical release province to a maximum dollar participation costs of a Nova Scotia–produced dramatic of $250,000 per project. This investment or animated feature film in which the triggers other sources of financing and corporation has an equity investment. The enables producers to make their films while goal of the program is to enhance the employing Nova Scotians. marketing campaign for the feature films The corporation provides development and increase the Canadian box office loans up to $15,000 per project to a returns. maximum of 33 per cent of the budget Locations and Marketing Programs spent in the province. These loans enable producers to develop their ideas to a stage The corporation will implement the where they can be pitched to investors. 2004–2005 Marketing Plan primarily targeting the American entertainment The corporation provides equity investment centres of Los Angeles and New York, as well up to $30,000 per new media project to a as Europe, through a variety of activities maximum of 33 per cent of the budget for including trade missions, participation at projects such as CD-ROMs, DVD, and festivals and markets, advertising, website, Internet-delivered programs that are and familiarization tours. related to film or television projects in which the corporation has an equity investment or that have stand-alone recoupment and financial structures 111 separate from the underlying property. Nova Scotia Film Development Corporation
Broadcaster/Distributor Forums Film Industry Tax Credit The corporation offers annual Broadcaster The Film Industry Tax Credit is a labour- and Distributor Forums, providing access to based tax credit of 30–35 per cent of eligible national and international broadcasters Nova Scotia labour capped at 15–17.5 per and distributors, bringing relevant industry cent of the total production budget expertise to the local industry. depending on where the production is shot. Travel Assistance for Market Development The tax credit is a key financing tool used The corporation provides assistance for by producers to complete their film and local producers to attend markets and television projects and can be accessed by festivals with the goal of selling completed both local and guest producers. works or attracting co-production partners Partnerships for projects in the development stage. Atlantic Canada Film Partners (ACFP) Script Breakdown/Locations Library The ACFP is a partnership of Nova Scotia, The corporation provides complete script Newfoundland and Labrador, New breakdown services for features, movies of Brunswick, and Prince Edward Island, the week, and television series and pilots formed to increase the general production utilizing photos from its extensive library of of film and television in the region, thereby locations from across the province. Image generating more jobs in the film industry, packages can be sent by courier or digitally encouraging foreign investment, and via e-mail to producers. increasing the feasibility of productions in Scouting this region. Through ACFP, producers have The corporation provides the services of access to international marketplaces, experienced and qualified location scouts to strategic professional development, producers and directors who visit the business planning services, and industrial province in search of suitable filming research. ACFP is financially supported by locations. the Atlantic Canada Opportunities Agency.
Community Liaison and Ongoing Support Strategic Partners The corporation provides assistance with The corporation partners with the Atlantic ongoing location research, information, and Film Festival to sponsor Strategic Partners, an support as required. The NSFDC will connect international co-production and co-venture producers to local unions, guilds and conference. Strategic Partners provides an production personnel, and other contacts opportunity for local industry members to throughout the province. In addition, the explore international partnership NSFDC will act as ombudsman and mediator opportunities for television and feature film. 112 for the industry and the general public. Crown Corporation Nova Scotia Film Development Corporation Business Plans
Film Advisory Committee (FAC) Atlantic Film Festival, and the National The purpose of the Film Advisory Screen Institute. Committee is to provide a mechanism The corporation offers an annual Business through which government and industry Issues seminar, bringing relevant industry can work collectively to promote and grow expertise to Nova Scotian producers, as well the guest production segment of Nova as other pitching, market-readiness, and Scotia’s film industry and address business development events. opportunities and issues with regard to location shooting, to the benefit of Nova FirstWorks Scotia and the industry as a whole. The FirstWorks Program is a hands-on film and video production curriculum, which is Industry Support available as a turnkey package for licensing by interested groups or Optimize resources by partnering with organizations. The goal of the program is to government, private-sector, and industry open the doors of the film industry to the stakeholders to provide professional youth participants, many of whom obtain development opportunities aimed at employment or advance to further training advancing producers and personnel in programs in the film and television Nova Scotia’s film, television, and new industry after completing the program. media industries. Partnerships Professional Development Industry Strategy The corporation optimizes financial and The corporation will participate in a joint human resources by partnering with government/industry task force comprising government, private sector, and industry a wide variety of industry stakeholders. The stakeholders to provide professional task force has been organized to oversee the development opportunities, which supports development of a strategy that will guide the advancement of Nova Scotia’s film the development of the industry over the industry in global markets. next five years, as well as outline the
NSFDC Initiatives economic benefits of the film industry to the province. A third-party consultant will The corporation invests in the continued be selected and contracted by the task force professional development of Nova Scotian to complete an industry study. filmmakers through organizations such as the Moving Images Group, the Atlantic Filmmakers Cooperative, the Centre for Art Tapes, the Shortworks program, the 113 Nova Scotia Film Development Corporation
Atlantic Canada Film Partners (ACFP) Nova Scotia Film Development Corporation’s In partnership with ACFP, the corporation 2004–2005 Business Plan recognizes Nova sponsors annual attendance by a local Scotia’s film and television industry as being producer at the Alliance Atlantis Banff at a crucial development stage. Along with Television Executive Program. being a multi-million dollar industry, it allows Nova Scotians to preserve their culture Corporate Service and display their talent with pride and Accountability internationally. It is labour intensive, environmentally friendly, and appealing to Deliver effective corporate service to the our youth. government, the corporation’s Board of Directors, and the industry by investing During 2004–2005 the Nova Scotia Film strategically in locally produced projects Development Corporation faces many and supporting guest production that, in challenges and opportunities. The film and turn, employs Nova Scotians and supports television industry is complex and local businesses. The corporation maintains dynamic. In order to compete in this industry statistics and produces monthly industry, organizations must stay aware of financial statements, an Annual Report, the ever-changing environment. They must and regular reports to stakeholders. The continually learn and strategically partner corporation’s Routine Access Guidelines and with other organizations to synergize Annual Report are available on its website. talents and compete globally.
The recent reductions in the corporation’s budget allocation through March 31, 2004 Priorities for have meant that the corporation could not 2004–2005 put “first-in” funds into many Nova Scotia film projects, which precludes them from The film and television industry requires competing for other film-financing dollars. government assistance in order to attract The corporation is counting on the incremental investment and create province’s support in the upcoming year to employment. This is not unique to Nova restore the levels of local production and Scotia, but is the reality of the rest of the continue growing this vibrant and country, Europe, Australia, and most other environmentally friendly industry. This areas, with the exception of the United investment will be able to lever multi States. Canada simply does not have the millions of dollars of funds from sources population base, or viewers, required to outside the province. maintain a self-sufficient industry. 114 Crown Corporation Nova Scotia Film Development Corporation Business Plans
Red Tape Reduction The film and television industry makes a significant contribution to the province’s Some initiatives recently undertaken by the economy. For each dollar that the province corporation in an attempt to reduce red tape invests in the film industry, including tax and provide a business friendly credit registrations and the Nova Scotia environment include providing program Film Development Corporation programs, guidelines online, accepting digital in excess of $20 are attracted to the applications, and decreasing the province from private investors and the turnaround time for processing tax credits. federal government, placing the The corporation’s priorities for red tape corporation’s programs in the position of reduction include removal of barriers, providing high-value programs at a low streamlined processes, information cost to the province. dissemination, industry advocacy, client turnaround time, facilitation of connections, The attached budget reflects an and regular reporting and communication appropriation of $2,508,700. of information to all stakeholders.
Budget Context 2004-2005 Over the past five years the Nova Scotia Film Development Corporation, received reduced budget appropriations to assist the province in its goal of a balanced budget. The corporation’s reduced funding meant that fewer funds were available to seed film projects. These reductions resulted in the corporation not being able to provide “first- in” funds to projects. The corporation’s funds trigger investment from the private industry and federal programs. Real opportunity costs are associated with the corporation’s reduced level of funding, which include out of work Nova Scotians, companies ceasing to operate, and new trainees not being hired. 115 Nova Scotia Film Development Corporation
Budget Context
Forecast Estimate 2003–2004 2004–2005 ($) ($) Contributions Nova Scotia Government 2,700,000 2,508,700 Recovery of Equity Investments 150,000 150,000 and Development Loans Federal Government ACFP 75,000 0 Strategy Income 0 50,000 Other Income 0 40,000 Interest Income 25,000 25,000 Total Revenue 2,950,000 2,773,700
Disbursements Programming 2,310,500 2,114,700 Atlantic Canada Film Partners 75,000 0 Administrative 385,500 477,000 Advertising and Marketing 179,000 182,000 Total Expenses 2,950,000 2,773,700
Administrative Expenses (a) Salaries and Benefits 295,000 310,000 Telephone and Fax 6,000 6,300 Staff Training 5,000 5,000 Bank Charges 1,500 2,500 Consultants 7,000 75,000 Courier 6,000 2,500 Dues and Fees 4,000 6,500 Insurance 2,000 2,200 Conferences and Marketing 3,000 5,000 Board 13,000 20,000 Repairs and Maintenance 2,000 2,400 Capital Equipment 10,000 7,000 Office 15,000 16,000 Copier and Fax Rental 5,000 4,400 Postage 6,000 5,600 Professional Fees 5,000 6,600 Total Administrative 385,500 477,000
116 Crown Corporation Nova Scotia Film Development Corporation Business Plans
Forecast Estimate 2003–2004 2004–2005 ($) ($) Advertising and Marketing: Business Travel 40,000 40,000 Locations 40,000 67,000 Advertising and Marketing 30,000 35,000 Familiarization Tour and Marketing Materials 30,000 13,500 Annual Report 6,000 5,000 Location Scouts 9,000 9,000 Library Update 10,000 2,000 Photos and Location Services 8,000 10,500 Website 6,000 0 Total Advertising and Marketing 179,000 182,000
137 140 130 119 120 120 NS vs. Guest* (millions CDN $) 97.5 100 100 1995: 17 vs. 15 1996: 43.3 vs. 4.3 80 97–98: 92.5 vs. 5.0 60 98–99: 89.5 vs. 29.5 47.6 99–00: 70 vs. 60 millions CDN $ 40 32 00–01: 65 vs. 35 20 01–02: 89 vs. 48 02–03: 68 vs. 52 0 1995 1996 97–98 98–99 99–00 00-01 01-02 02-03
Guest Nova Scotia Total
Source: Nova Scotia Film Development Corporation
* Please note that “Guest” production refers to non-Nova Scotia projects filmed in Nova Scotia.
117 ax Credit y y T arget y during the Consul vices rade Mission and will meet s film industr s Canada Day celebrations. Local producers rade Mission led by the Premier of Nova Scotia Implementation of a strategic marketing plan Continuation of the NS Film Industr LA T in June 2004 culminating with a celebration of Nova Scotia’ General’ will participate in the T with LA-based producers, studio representatives, distributors, and broadcasters. Continuation of investment programs with potential revisions to make programs more strategic and responsive to the needs of industr Provision of locations ser • • • • • Strategies to Achieve T arget $120 million $68 million 2005–06 T arget $120 million $68 million 2004–05 T arget $100 million $56 million 2003–04 T ear $120 million $68 million 2002–03 Base Y mance Measures for Production activity Nova Scotia portion of production activity Measure Economic and Export Potential Film, television and new media production levels Indicator s ces available, Core Business Area 1 Outcomes and Per Outcome 118 Contribute to Nova Scotia’ economy by maximizing, with the resour the economic potential of the film, television and new media industries ce Crown Corporation Business Plans y y task for y strategy; ve as a guide for private arget y representatives to establish ch into the gaps in industr orking with provincial government departments leading to a complete film industr commence implementation in conjunction with all stakeholders Participate in a joint government/industr Ongoing resear and identifying solutions Offering and supporting professional development initiatives W impacted by filming to standardize and streamline the procedure through which requests for filming on government-owned property are processed. Also work with industr location fee guidelines to ser property owners who may consider renting their properties as a film locations • • • • Strategies to Achieve T arget Implementation of strategy N/A See 2004–2005 2005–06 T arget Disseminate guidelines to the general public Implementation of strategy See 2004–2005 2004–05 T y needs y- arget Completed strategy Strategic professional development opportunities addressing industr Create industr accepted guidelines 2003–04 T ear N/A* N/A * N/A* 2002–03 Base Y Level of stakeholder participation Client feedback Client feedback Measure y in y Support Industr vailability and A planned and coordinated approach among all stakeholders in the development of the film industr Nova Scotia Eliminating barriers to film production A quality of professional development opportunities Indicator y producers and o assist and promote the Core Business Area 2 Outcome * New measures T development of the film, television and new media industr personnel in Nova Scotia 119 arget y chive system, have STOR approved, ch ar ward Part B application to the Department Resear adopt, and begin implementation For of Finance within two weeks having received a complete application package Making the Program Guidelines, Production Guide and additional program information available online Locations Digital Librar • • • • Strategies to Achieve T arget 50% 50% 100% N/A 2005–06 T arget 25% 100% 25% N/A 2004–05 T arget 10% 75% 100% 5% 2003–04 T ear 10% 70% 0% N/A* 2002–03 Base Y chive ces online vailability of system Effective ar Decreased processing time of tax credits for small productions once complete application package has been received A resour Measure vice and Accountability vice y Corporate Ser Records Management Improved ser deliver Indicator vice Core Business Area 3 Outcome * New measure 120 Efficient and effective corporate ser Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Nova Scotia Fisheries and Aquaculture Loan Board Business Plan 2004–2005 Table of Contents Mission ...... 123 Planning Context ...... 123 Strategic Goals ...... 124 Core Business Areas ...... 125 Priorities for 2004–2005 ...... 126 Budget Context ...... 128 Outcomes and Performance Measures ...... 129 Crown Corporation Nova Scotia Fisheries and Aquaculture Loan Board Business Plans
and the processing sector. Whether it be with Mission areas of provincial jurisdiction or with the marine fisheries, which are administered To serve, develop, and optimize the federally, personnel from the Nova Scotia harvesting segment of the Nova Scotia Fisheries and Aquaculture Loan Board must fish harvesting and aquaculture play an active role to ensure that fisheries industries, for the betterment of our policies and management strategies are good coastal communities and the province for Nova Scotia and the industry in this as a whole. province. Our fishery is more than a way of life, it is a successful business; we must strive to keep it productive and internationally Planning Context competitive. The Nova Scotia Fisheries and Aquaculture Nova Scotia is the leading fishing province Loan Board and its predecessor have served in Canada, a nation that is known as a the province and the fishing industry since world fishing power. We are fortunate to 1936, by providing long-term stable have a diversified industry that can survive development funding. and prosper on its strengths while various The board operates under the authority of segments suffer cyclical downturns. Our the Fisheries and Coastal Resources Act. This commercial fishery alone has an annual act, by its name, emphasizes the coastal landed value of approximately $753 community development focus of the board’s million, with a market value of operations. Through this board, the Nova approximately $1.1 billion, and our Scotia government ensures it has a cost- aquaculture and recreational fishery effective, positive, focused, and beneficial sectors generate $130 million more. The influence on the development of the fishing industry is the main employer in many and aquaculture industries of Nova Scotia. regions of the province and drives the economies of our coastal communities. Diversification and technological advancements in the fishing industry As our fishery moves into the 21st century, we continue to create a demand for newer, must maintain and enhance the traditional larger, and efficient vessels. Existing clients components of the industry, which over time will also take advantage of this new have provided us with success. We must build technology to improve and upgrade their on these segments, seeking out and vessels. This will result in maintaining a developing new opportunities in high level of boatbuilding activity. aquaculture, the recreational fishery, coastal zone management, under-utilized species, 123 Nova Scotia Fisheries and Aquaculture Loan Board
The aquaculture sector of the fisheries has experienced negative growth in the last five Strategic Goals years. This is a direct result of the failure of The Fisheries and Aquaculture Loan Board a large steelhead operation in Cape Breton supports the goals and priorities of the and the harsh winter of 2003. The Nova government of this province and of the Scotia Fisheries and Aquaculture Loan Department of Agriculture and Fisheries. Board is working with the department and The board’s strategic goals support the industry in the development of an government and the department as follows: aquaculture strategy in hopes of turning this industry around. • Support for the Nova Scotia Fisheries and Aquaculture Loan Board to address The Fisheries and Aquaculture Loan Board the needs of Nova Scotia fishers and borrows funds from the Department of aquaculturists to have access to capital Finance on a quarterly basis. The and to stimulate growth and job Department of Finance marks up the interest creation in coastal communities. rate 15 basis points, and the loan board increases this rate by at least 1.75 per cent, • Focus on access to stable, cost-effective, thereby guaranteeing the province a profit long-term development credit and on the board’s loan portfolio. For the fiscal financing. year ending March 31, 2003, the loan • Identify and analyse growth board’s surplus was $1.5 million as per the opportunities and assist in the Office of the Auditor General. With this development of fisheries and financial arrangement in place, the loan aquaculture sectors. board can fulfil the expectations and service • Promote awareness and use of needs of the fishing industry by providing financially sound business principles. long-term stable development funding, which will enable the fishers of Nova Scotia • Increase production and market value to take advantage of economic opportunities of the fisheries and aquaculture to maximize jobs and growth. industries in Nova Scotia.
124 Crown Corporation Nova Scotia Fisheries and Aquaculture Loan Board Business Plans
3. Maintaining a loan-collection Core Business program on a monthly basis to Areas keep loan arrears to a minimum. In order to carry out the Board’s mission – Each and every lending institution and that of the Department of Agriculture must have an effective collection and Fisheries, the Board is involved in the program to reduce arrears and keep following four core business areas: write-offs to a minimum.
1. Providing long-term fixed-rate 4. Providing financial counselling loans for the development of the and assessments for proposed harvesting and aquaculture projects. sectors of the fishing industry. – Financial counselling ensures that – Government developmental financing customers manage their income and is required for the harvesting sector, as resources wisely and assists the loan the chartered banks consider lending board’s repayment record. Project to this sector to be high risk. assessments help the industry to be Aquaculture financing is also successful and also reduce the necessary, as this sector is a developing potential of delinquent accounts. industry, which the banks believe to be very high risk.
2. Maintaining a vessel inspection program for all new construction, used vessel purchases, modification, and engine equipment loans.
– A vessel inspection program is necessary for new boat construction to ensure that the boats are built to rigid loan board standards. Used vessels, modification, and engine equipment loans are inspected to ensure that the funds lent are secure in the value of the boat. 125 Nova Scotia Fisheries and Aquaculture Loan Board
2. Maintaining a vessel Priorities for inspection program for all 2004–2005 new construction, used vessel In keeping with the goals for the board, purchases, modification, and Department of Agriculture and Fisheries, engine equipment loans. and government, the following represents Each new vessel is inspected biweekly the board’s priorities for 2004–2005 by core during construction to ensure that it is business area. being built to rigid loan board standards. All used vessels financed by the loan board, 1. Providing long-term fixed-rate as well as vessels for engine modification loans for the development of the and equipment applications, are inspected fish harvesting and aquaculture to ensure that they are built to loan board industries. The board reviewed standards. Inspections also guarantee that 189 loan applications during the the funds lent by the loan board are secure 2002–2003 fiscal year. in the value of the boat. The board carried out 505 new vessel inspections and 571 • Provide $25 million of developmental inspections of another nature during the funding to the fishing and aquaculture 2002–2003 fiscal year. industries. • Carry out annual maintenance • Continue to assess new loan proposals inspections on loan board–financed by applicants. vessels to ensure continued loan • Continue to review the loan approval security and equity. process, by adjusting the loan approval • Approve builder construction plans limits and the time of approval. and boat specifications to ensure that • Review loan approval conditions to they meet loan board standards. streamline the loan process. • Assist boatbuilders by giving technical • Facilitate the replacement and advice that relates to the preparation of upgrading of older vessels in each fleet. plans and drawings; also provide technical assistance relating to the construction of new vessels and modification of vessels.
126 Crown Corporation Nova Scotia Fisheries and Aquaculture Loan Board Business Plans
3. Maintaining a loan collection • Continue to partner with industry, program on a monthly basis to other lenders, and other government keep loan arrears to a minimum. departments to improve financial Monthly collection activities information and develop combined reduce the arrears outstanding lending packages for our clients. and minimizes writeoffs. The arrears percentage has been reduced to 1.8 per cent as of March 31, 2003, from 3.4 per cent on March 31, 2002.
• Review loan board arrears on a monthly basis to determine the proper course of action required.
• Continue to write letters and make phone calls and field visits in an effort to collect delinquent accounts.
4. Providing financial counselling and assessments for proposed projects.
• Continue to review and analyse applications for funding and various other projects.
• Assess the profitability of financing vessels that engage in the harvesting of non-traditional species.
• Investigate new loan programs with flexible terms that will assist the fishing and aquaculture industries.
127 Nova Scotia Fisheries and Aquaculture Loan Board
Budget Context
Fisheries and Aquaculture Loan Board Estimated Budget Expenditures
Forecast Estimate 2003–2004 2004–2005 ($ 000) ($ 000) Total Program Expenses: Gross Current 621 693 Net Program Expenses Net of Recoveries 514 519 Salaries and Benefits 497 570 Funded Staff (FTEs) 9.2 10.0
Budget Forecast Actual Year Ending Year Ending Year Ending Mar. 31, 2005 Mar. 31, 2004 Mar. 31, 2003 ($ million) ($ million) ($ million)
Advances 23.0 22.0 20.6
Principal Payments 12.0 16.5 12.0
Interest Payments 5.1 5.0 5.0
Loans Receivable 80.0 75.0 69.1
Doubtful Accounts 0.9 0.9 0.9
Interest Expense 4.1 3.8 3.6
Net Income 2.0 1.7 1.5
128 Crown Corporation Nova Scotia Fisheries and Aquaculture Loan Board Business Plans
Outcomes and Performance Measures As stated previously, the Core Business Areas of the loan board are
1. Providing long-term fixed-rate loans for the development of the harvesting and aquaculture sectors of the fishing industry.
2. Maintaining a vessel inspection program for all new construction, used vessel purchases, and engine and equipment loans.
3. Maintaining a loan collection program on a monthly basis to keep loan arrears to a minimum.
4. Providing financial counselling and assessments for proposed projects.
In order to fulfil these Core Business Areas, the board has developed outcomes, indicators, measures, targets, and strategies to achieve these targets. These details are stated in the attached material which forms part of the board’s business plan.
129 y y and government vesting of under-utilized species arget ch 31, 2003 were $20.5 million y needs y and government y initiatives y income was $816 million e sectors of the fishing industr ch 31, 2003 the loan portfolio was $69.1 million orking with industr Continued interaction with the industr 2002–03: Industr Support financially viable operations As of Mar Provide financing for the har Loan advances as of Mar W Lending to meet industr Development of new lending programs Implementation of revised payment schedules Individual lobster fishers average income now $113,833 Estimate now 8,173 jobs Provide long-term fixed-rate loans Support new industr • • Strategies to Achieve T • • • • • • • • • • • • vesting and aquacultur y stability argets 2005–06 T Industr Increase of 15% Increased annual advances Increase average income levels (lobster) 2% per year Maintain and create jobs in Nova Scotia s y income verage lobster Data 2000–01 Industr ($648. m) (base) Increase in loan portfolio ($53. million) (base) Loan advances ($18.5 milllion) (base) Individual fisher’ income ($83,478) A income (base) Creation and maintenance of jobs (7,992) direct and indirect (base) mance Measures for s income (lobster) oviding long term fixed rate loans for the development of har y income Pr verage individual fisher’ Measures Industr Increase in loan portfolio Loan advances A Creation and maintenance of jobs y and y enterprises Core Business Area 1 Outcomes and Per Outcome aquaculture industries Sustainable fisher Improve lending programs for the fishing and aquaculture industries Development of new fisher Increase lobster landings and sales 130 Maintain and create jobs in Nova Scotia Crown Corporation Business Plans arget vey report on each vessel Adequate operating budget to inspect on a biweekly basis An inspection report to be completed Adequate operating budget Biweekly inspection report Biweekly progress payments to boat builders Adequate operating budget to inspect each vessel yearly Annual completed sur Maintain an equity position in each vessel financed by the loan board chases, modification, and engine equipment loans. • • • • • Strategies to Achieve T • • • arget 2005–06 T Biweekly inspections All new vessels under construction to be inspected biweekly All vessels to be inspected annually Data 2000–2001 Number of vessels inspected (106 annually) (base) Number of new vessels inspected biweekly (511 annually) (base) Number of vessels inspected (523 annually) (base) ogram for all new construction, used vessel pur Maintain a vessel inspection pr Measure Number of vessels inspected Number of new vessels inspected biweekly Number of vessels inspected Core Business Area 2 Outcome Ensure that vessels related to used boat, modification, and engine equipment applications are appraised biweekly Inspect each new vessel under construction biweekly Inspect each vessel that is financed by the board on a yearly basis 131 arget arget ch 31, 2003 1.8% of accounts were in arrears ch 31, 2003 write-offs stayed within this range ch 31, 2003 1.8% of accounts were in arrears ell-trained staff Suitable lending programs W Landed value increased from $753 million to $816 Sufficient staff to collect monthly Adequate operating budget to collect via monthly field visits As of Mar Patient lending Regular client visits Counselling for fishers and aquaculturists As of Mar Fisheries Loan Board loans secure in the value of boat Loan balances reducing as per repayment schedule As of Mar • • • • • • • • • • Strategies to Achieve T Strategies to Achieve T • • • ears to a minimum centage ojects arget 2005–06 arget 2005–06 T T 5–10% annual increase in fishers’ gross stock 3% arrears level 3% arrears level No increase in write-off amounts as a per of loan portfolio oposed pr centage of centage of centage of Data 2000–01 Data 2000–01 Increase in fishers’ income (base) Per accounts in arrears (4.1%) (base) Per accounts in arrears (4.1%) (base) Per annual write-offs (.25%) (base) ogram on a monthly basis to keep loan arr ovide financial counselling and assessments for pr Maintain a loan collection pr Pr centage of accounts in arrears centage of accounts in arrears centage of annual write-offs Measure Measure Per Increase in fishers’ income Per Per vesters successfully Core Business Area 3 Core Business Area 4 Outcome Outcome Frequent collection activity Har expand their operations 132 Decrease in arrears level Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Nova Scotia Gaming Corporation Business Plan 2004–2005 Table of Contents Mission ...... 135 Planning Context ...... 135 Strategic Goals ...... 135 Core Business Areas ...... 136 Priorities for 2004–2005 ...... 138 Performance in 2003–2004 ...... 141 Budget Context ...... 144 Outcomes and Performance Measures ...... 145 Crown Corporation Nova Scotia Gaming Corporation Business Plans
• changing demographics, which may Mission lead to different needs and expectations of its customers To provide entertaining and reliable • increased competition for disposable gaming products in a responsible and income and the resulting need to regulated environment, optimizing the provide greater entertainment choices financial benefits for Nova Scotians. and convenience to existing and new customers The Nova Scotia Gaming Corporation The continued success of the province’s (NSGC) is a Crown corporation governed by gaming business will be contingent on the provincial Gaming Control Act. Through identifying opportunities to advance new legislation, it is mandated to conduct and and/or enhanced gaming products and manage the province’s gaming business to delivery options to meet consumer needs optimize the economic return from gaming and expectations and to work in a responsible manner. collaboratively with gaming stakeholders to achieve a sustainable, socially Planning Context responsible industry in Nova Scotia. NSGC, like most major organizations, is experiencing significant and rapid change Strategic Goals in the environment and marketplace NSGC has identified seven strategic goals to within which it operates. guide its operations: Specifically, NSGC must address the • Provide, through its operators and following key internal and external other business partners, high-quality environmental factors: gaming products that are responsive to • the emergence of technology, both in the needs and expectations of its the delivery of gaming products and in customers. the type of gaming products offered to • Continue to identify and implement customers responsible gaming initiatives and to • concerns around social responsibility, promote Nova Scotia as a leader in responsible gaming, and problem responsible gaming. gambling • Meet revenue commitments to the province. 135 Nova Scotia Gaming Corporation
• Be an efficient and effective business by – ensuring that gaming revenues are managing resources well, leveraging available to fund local businesses, business relationships, and focusing on non-profit organizations and tangible results and outcomes. government programs and services
• Pursue new business opportunities that • ensure its products are offered with align well with its vision and other social responsibility, security and strategic goals. integrity; and,
• Achieve greater public awareness and • efficiently and effectively manage the acceptance of gaming as an province’s gaming business in the best entertainment choice. interests of Nova Scotians.
• Develop and sustain a corporate To meet these objectives, NSGC performs culture that values entrepreneurialism, three core business functions. professionalism, and excellence and is committed to employing people who 1. Operations Management are motivated to fulfilling their This involves the effective management of independent and collective potential. NSGC’s existing gaming businesses—ticket lottery, video lottery, and casino. There are three key areas under this core business Core Business function:
Areas • Operator Management. This includes NSGC’s business objectives are to the management of and support to NSGC’s operators—Atlantic Lottery • be a significant contributor to Nova Corporation (ALC) and Casino Nova Scotia’s economy by Scotia (CNS)—to ensure optimal – generating employment performance of agreed-upon indicators, – stimulating business development as well as growth through the existing gaming businesses. – supporting local suppliers of goods and services • Risk Management and Quality Control. This involves proactive risk – capturing the gaming market to management and effective quality impede the loss of gaming revenues control within a business environment. to illegal, unregulated gaming
136 Crown Corporation Nova Scotia Gaming Corporation Business Plans
• Compliance Management. Compliance • Planning and Policy Development. management is a key component of a NSGC is committed to exploring new well-run gaming industry. NSGC opportunities through proper planning ensures that all its business conforms to and thorough policy consideration. The applicable legislation, regulations, main focus of planning and policy contracts, and policies. development is to create an environment that is conducive to 2. Business Development facilitating and advancing gaming opportunities in Nova Scotia, including Beyond the ongoing operations of ticket expanded business and responsible lottery, video lottery, and casinos, NSGC gaming initiatives, which are aligned must strategically invest in initiatives that with the province’s public policy directly align with its goals: objectives. • Responsible Gaming. NSGC is committed to being a leader in responsible gaming. 3. Relationship Management Significant resources are dedicated to Given the many stakeholders that considering new initiatives, sharing contribute to gaming in Nova Scotia, information, consulting various experts, NSGC’s success is directly connected to its and managing ongoing responsible ability to forge and maintain successful gaming projects. relationships with several different groups. • Industry Knowledge and Research. A These groups can be broken into three sound knowledge of current industry segments: trends and market and social research • Shareholder Relations. NSGC is are necessary when considering new conducting and managing gaming on gaming opportunities. Hand in hand behalf of its shareholder, the Province with exploring new business of Nova Scotia. Through its Board of opportunities are research initiatives Directors, NSGC has a responsibility to that are reflective of a customer-driven, keep government apprised of emerging publicly accountable organization. issues related to gaming and to provide financial reporting on its operations.
137 Nova Scotia Gaming Corporation
• Operator Relations. It is imperative and promotion of, the Casino Nova Scotia that NSGC has a strong relationship and Casino Nova Scotia Hotel brand. with its operators, ALC and CNS. To Casino Nova Scotia will promote and continue strengthening these reciprocal strengthen its position as the premier relationships, NSGC invests time to entertainment destination in Atlantic ensure that it is providing clear advice Canada through high-calibre entertainment and direction and that both operators offerings featuring local, national, and understand their respective roles in international performers. In addition, it will meeting NSGC’s commitments to its partner with various special events and shareholder and to Nova Scotians. festivals to further grow and support • Stakeholder Relations. Integral to community events. A variety of unique ensuring that NSGC is successful in comedy, sporting events, and other achieving its strategic goals is ongoing entertainment offerings will also be pursued. collaborative communications with An updated casino website will provide retailer groups, the business community, customers with the opportunity to interact problem-gambling specialists, the with the casino and request information research community, and the media. updates on such things as upcoming entertainment, promotions, discounts, and hotel specials. This will ensure that product Priorities for and service offerings are aligned with 2004–2005 customer needs and expectations. For NSGC, 2004–2005 will be a year focused For the ticket lottery business line, 2004–2005 on identifying opportunities to respond will see further game diversification and effectively to the environmental challenges product development, including the identified in the Planning Context above enhanced Lotto 6/49 game and a new sports and to build a sustainable, socially game that responds to growing market responsible gaming industry for the benefit demand for this type of product.
of Nova Scotians into the future. Ticket lottery will focus on evaluating innovative new products to meet growing Gaming Products and Initiatives player demands and demographic trends, For 2004–2005, the casino business line will particularly the desire for more interactive continue its focus on expanding its share of and technology-based lottery games. An the entertainment market in Atlantic enhanced product development process will Canada through further refinements to, also be implemented to ensure that these 138 initiatives have been researched from Crown Corporation Nova Scotia Gaming Corporation Business Plans
market and social impact perspectives and The pilot project, which began in are launch-ready to allow for efficient, 2003–2004, to assess the feasibility of several timely future introduction to respond to modifications to the VLT responsible gaming changing market and consumer trends. features will be completed in 2004–2005 and a recommendation received as to whether The video lottery operations will focus on the features should be expanded to VLTs continued implementation of the game province-wide. As with the original features, development program, which aims to the objective of the modifications is to assess and alter game designs and themes provide reality checks and breaks in play for to ensure game freshness and variety that VLT players who currently game responsibly appeal to a broad, responsible player base. or for new players.
Responsible Gaming Awareness and Education In 2004–2005, NSGC will continue its The third annual Responsible Gaming commitment to Awareness Week will be held in October • provide gaming consumers with clear, 2004, building on the success of prior years relevant information to allow them to and continuing NSGC’s focus on province- make informed choices about gaming wide public and player education about the and to assist them in playing importance of responsible play. NSGC will responsibly also focus on the development of public awareness programs and initiatives • raise awareness and educate the public designed to provide information and and players as to the importance of education about responsible gaming. responsible play The responsible gaming training for video • provide a conduit to problem gambling lottery retailers will be evaluated and, if resources and help appropriate, refreshed to ensure that it is effective and provides the best, most up-to- Information to Make Informed Choices date information to the businesses that A VLT player management program, offer NSGC’s gaming products. Responsible which will help players become more gaming training introduced in 2003–2004 aware of how much time and money they will continue to be offered to ticket lottery are spending on gaming, will be retailers to ensure their awareness of operational. The program will provide tools responsible gaming practices and available to players to assist them in budgeting, resources for problem gamblers. tracking their time and money spent, and engaging in responsible play behaviours. 139 Nova Scotia Gaming Corporation
Conduit to Problem Gambling Resources Efficient and Effective Management
The results of a VLT self-exclusion process The casino operations will focus on the test that commenced in 2003–2004 will be implementation of its new gaming operating evaluated, and, if the results show potential system, which will provide increased operating for the development of a successful efficiencies and promotional abilities and program, a pilot test of a self-exclusion allow for an improved customer loyalty program will be explored. program, leading to enhanced customer- NSGC’s responsible gaming training will specific marketing and promotional abilities also contribute to the achievement of this that ensure that player desires are met.
commitment by ensuring that retailers are In ticket lottery, emphasis will be placed on positioned to provide players with strengthening and expanding the current information about available resources. distribution channel to align with changing consumer buying trends and to build on the Economic Return corporate accounts program designed to NSGC’s operators, CNS and ALC, will provide efficiently and effectively address the lottery over 1,100 direct jobs to Nova Scotians in needs of corporate stores and chain 2004–2005. NSGC will also provide accounts. The new ticket distribution model approximately $54 million in retail and inventory management system will be commissions to local Nova Scotia businesses, implemented. This will ensure that products $36 million to about 500 VLT retailers, and are efficiently distributed to retailers and $18 million to 1,300 ticket lottery retailers. that potential unavailability of stock at retail locations is mitigated, benefiting The budgeted contribution to the province, customers, retailers, and NSGC. to fund its programs and services, is $169.0 million (+/–2 per cent). This is a decrease of The video lottery business line will replace $6.5 million over 2003–2004. This its aging central computer operating downward trend is not isolated to gaming system. Following the completion of a in this province and is being experienced in preliminary requirements evaluation in gaming jurisdictions across North America. 2003–2004, a request for proposals will be In Nova Scotia, the decrease can be issued and an assessment of available attributed to such environmental factors as options and customization of requirements product maturation in some business lines will be made. The current system’s outdated and increased competition for the technology limits information-gathering entertainment dollar, as well as heightened capabilities required to efficiently manage responsible gaming awareness. the program and implement leading-edge 140 responsible gaming initiatives. Crown Corporation Nova Scotia Gaming Corporation Business Plans
In video lottery, a game development Performance in program was introduced to ensure that 2003–2004 appropriate game variety and mix are available to players. This development Gaming Products and Initiatives plan will be reviewed on an ongoing basis to ensure that the best combination of Many initiatives were successfully games is available to appeal to a broad undertaken to help enhance existing player base. products and to introduce new products and distribution channels. The following Responsible Gaming summarizes several key accomplishments in 2003–2004. NSGC continued to remain focused on social responsibility and to build on its Within the casino business line, the commitment to responsible gaming in rebranding of the Casino Nova Scotia Hotel 2003–2004. Several key initiatives were added synergy to the Stay and Play completed and many others started that marketing strategy. The casino made will come to fruition in 2004–2005 and further enhancements to its entertainment beyond. offerings during the year and also increased the complement of its Players’ Club Nova Scotia’s second Responsible Gaming (customer loyalty program) by 40,000, Awareness Week was held October 19–25 bringing the total membership to almost and was more broad-reaching than last 200,000. year. More than 1,000 people either attended awareness sessions or received Within the ticket lottery business line, information from mall displays throughout several new Atlantic Canadian products the province about what it means to play were introduced, including such games as gaming products responsibly. Instant Millionaire, by which a Nova Scotia couple won one of the three $1-million Lottery ticket retailers participated in prizes, Gas for a Year, and a ticket based on training sessions about responsible the popular television show The Price Is retailing of ticket products. They were Right. Promo Packs, which bundle lottery educated about what it means to game tickets for convenient purchase, continued responsibly and provided with information to be enhanced to provide greater play about who problem gamblers can call to value to customers. seek help. This program is similar to one that has been provided since 1999 to NSGC’s video lottery retailers. 141 Nova Scotia Gaming Corporation
In August, NSGC’s President and CEO Finally, a process test began in the Western became a member of the Board of Directors and Valley regions of the province to of the Responsible Gambling Council of ascertain whether an appropriate Canada. She joins members from three infrastructure can be put in place to other provinces, who will work together to support the implementation of a VLT self- develop a strategy for the council, which exclusion program. will focus on creating knowledge, pursuing research and analysis, and facilitating Economic Return relationships among gaming stakeholders Through NSGC’s operators, ALC and CNS, in support of responsible gaming and gaming provided over 1,100 jobs to Nova problem gambling issues in Canada. Scotians in 2003–2004 and generated $58 In October 2003, a pilot test began in over million in retailer commissions. 40 VLT retail establishments throughout NSGC contributed $175.5 million to the South Shore (from Lunenburg to provincial programs and services across the Shelburne) to assess the effectiveness of province in 2003–2004, $3.2 million less proposed enhancements to the VLT than budget. This is due to a number of responsible gaming features, first factors, including increased competition for introduced on VLTs in 2001. This pilot stems disposable income, interruption in business from independent research on four original due to Hurricane Juan, changes in play responsible gaming features (pop-up purchase patterns, maturity of some reminders, permanent clock, mandatory products, and potential impact of cash-out, and displaying actual dollars responsible gaming initiatives. wagered). That research showed that the features had a positive impact and Efficient and Effective Management provided recommendations on ways to enhance them to make them even more In 2003–2004, NSGC continued to evaluate effective. This pilot will test a number of opportunities to improve operational those recommended changes. efficiencies and implemented a number of strategies to effectively manage and A product assessment model was designed for optimize its resources in the current new and existing gaming products to assist environment. NSGC in delivering on its commitment to integrated, balanced management of In ticket lottery, a new distribution model gaming and informed business decisions that was pursued that will make use of advanced consider the economic and social impacts of technology as well as courier services. One product design, promotion and delivery. of the benefits of the new system is a more 142 Crown Corporation Nova Scotia Gaming Corporation Business Plans
efficient product distribution, meaning that players’ demands are better met and the service level for retailers is enhanced. The new system will be installed in 2004–2005.
The casino focused its marketing efforts on direct mail activity by leveraging its Players’ Club database. As well, it leveraged its bus tour program for the Halifax Casino, which brings groups of guests from outside the city centre and/or Nova Scotia to enjoy an outing at the casino. Food and beverage services met its goal of breaking-even.
Within the video lottery business line, options to improve the central computer system were assessed. Through a request for proposal process, a company will be retained in 2004–2005 to install and integrate a new central computer system.
143 Crown Corporation Nova Scotia Gaming Corporation Business Plans
Budget Context Forecast Estimate 2003–2004 2004–2005 ($ 000) ($ 000) Revenues Atlantic Lottery Corporation Ticket lottery 205,500 215,900 Video lottery 182,000 175,100 Halifax Casino Nova Scotia Casino 64,800 63,000 Beverage, food, and other 7,100 6,900 Sydney Casino Nova Scotia Casino 21,500 20,000 Beverage, food, and other 1,900 1,900 Interest income 300 300 483,100 483,100 Expenses Atlantic Lottery Corporation Ticket lottery expenses –Prize expense 112,200 116,700 –Retailer commissions 19,200 18,000 –Operating and other 34,400 39,400 Video lottery –Retailer commissions 39,200 36,200 –Operating and other 25,550 25,950 Halifax Casino Nova Scotia Casino win tax 12,900 12,600 Operating 54,200 54,800 Capital replacement reserve 1,100 1,100 Sydney Casino Nova Scotia Casino win tax 4,300 4,000 Operating 13,500 13,700 Capital replacement reserve 500 800 Payments to operator 1,400 1,100 Responsible Gaming contributions and programs 3,100 3,100 Special Payments Harness Racing Fund 750 750 Office of Health Promotion 100 100 Department of Agriculture and Fisheries 50 50 Department of Education 50 50 NSGC management expenses 2,300 2,300 324,800 330,700 Net Income 158,300 152,400 Total Payments to Province of Nova Scotia NSGC net income 158,300 152,400 Casino win tax 17,200 16,600 175,500 169,000 144 Crown Corporation Business Plans arget eek y products wareness W y player management program T Game Replacement Program ideo lotter Successful completion of outcomes # 1, 4, and 5 Responsible Gaming A Responsible gaming assessment tool for new products V Education/awareness programs VL Interactive CNS website New and improved ticket lotter • • • • • • • • 2004–05 Strategies to Achieve T $483 million 72% 75% arget 2004–05 $169.0 million $3.1 million 8% increase 80% • • • T ear Measure $469 million 68% 71% $178 million $1.9 million 53% 20% • • • 2001–02 Base Y y vice y good mance Measures s commitment vices as good/ver for Measure $ payment $ funding % of public aware NSGC’ to responsible gaming % of VL players aware of responsible gaming features $ sales % of customers who rated products and ser good % of retailers who rated overall ser as good/ver s otal payment Indicator T to province Responsible gaming funding Public awareness of NSGC’ commitment to responsible gaming Players’ awareness of responsible gaming features Sales growth Customer satisfaction Retailers’ satisfaction Meet revenue commitments Leader in responsible gaming Provide high-quality gaming products Core Business Area Outcomes and Per Outcome 3. 2. 1. 145 146
Core Business Area
Outcome Indicator Measure Base Year Measure Target 2004–05 2004–05 Strategies to Achieve Target 2001–02
4. Be efficient and effective Payment to province % of revenue 38% 35% • Return on investment of casino marketing strategy in relation to revenue paid to province • Ticket lottery inventory management system Operators’ Rating of overall 8.5/10 9/10 • VL central system satisfaction effectiveness of relationship
5. Implement new business Sales from $ incremental sales N/A $12 million • New games development opportunities new business • New delivery channels development • New products initiatives
6. Greater public awareness Public acceptability % of public not 34% 8% increase • Communications Strategy and acceptability of gaming opposed to any • Public awareness activities forms of gaming Public awareness % of public aware 8% 8% increase of NSGC of NSGC Public consideration % of public who 78% 80% of gaming as agree or strongly entertainment agree that gaming is entertainment Crown Corporation Business Plans arget vey Lunch and learn sessions Satisfaction sur • • 2004–05 Strategies to Achieve T arget 2004–05 85% 95% T ear Measure 80% 92% 2001–02 Base Y % of staff participating in training and development programs % of staff who agree that they are kept informed of current issues facing organization Measure Staff participating in training and development programs Staff awareness of current issues Indicator Core Business Area Outcome 7. Positive corporate culture N/A – Not applicable 147 Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Nova Scotia Government Fund Limited Business Plan 2004–2005 Table of Contents Mission ...... 151 Planning Context ...... 151 Strategic Goals ...... 151 Core Business Area ...... 152 Priorities for 2004–2005 ...... 152 Budget Context ...... 152 Outcomes and Performance Measures ...... 152 Crown Corporation Nova Scotia Government Fund Limited Business Plans
Nonetheless, the NSGF has been able to Mission identify the two investment projects required to meet the federal program To fund alternative delivery requirements. NSGF is currently pursuing a initiatives for government. third investment that will complete the five- year investment requirement of the first investment that recently was repaid. Funds Planning Context not invested in projects have been safely placed where they can be accessed as The Nova Scotia Government Fund Limited qualified investment opportunities occur. (NSGF) was incorporated on December 16, 1994 under the Companies Act (Nova NSGF will primarily confine its efforts to Scotia). It was approved as a government- adhering to the policies of the federal administered venture capital fund legislation relating to the fund and ensuring pursuant to the regulations issued under that the funds are invested in appropriate the Immigration Act. projects that meet the objectives of the fund.
The January 4, 1996 offering memorandum contains investment restrictions that make it difficult to find qualifying projects. The Strategic Goals offering states, “The Fund will be restricted Federal and provincial investment criteria to making investments directed to the have limited suitable investment privatization of public services and may opportunities. In light of this the goals of include operation of food services in the NSGF for the fiscal year 2004–2005 are hospitals, laboratory services to health care the following: facilities and other projects that will result in • To ensure that the funds of all investors economic benefit to Nova Scotia.” are safely invested. NSGF continues to actively look for • To direct the Nova Scotia Department of appropriate investments within the Finance to continue to invest any money limitations of the offering memorandum. not invested in qualified projects in liquid The opportunities for investment are further Canadian securities until such time as hampered by the significantly declining the investors’ promissory notes come due. interest rates available from other sources that have decreased the attractiveness of the • To continue to facilitate funding to NSGF funds for investment. investors when their notes become due. • To take advantage of investment opportunities as they arise. 151 Nova Scotia Government Fund Limited
Core Business Outcomes Area and Performance The core business area of the NSGF is to Measures invest the funds already raised through the NSGF is a mature government-administered offering memorandum in qualified venture capital fund approved pursuant to investments as outlined by both Citizenship the regulations issued under the Immigration and Immigration Canada and the offering Act. Through the Board of Directors of NSGF, memorandum. the prime emphasis with the fund is to ensure that it is properly invested in safe investments that meet the requirements of Priorities for the offering memorandum. At this stage in 2004–2005 the fund’s existence the prime job is to maintain proper monitoring of the assets • To ensure that the funds belonging to and investments. the investors are safely and soundly invested.
• To find/solicit and assess potentially qualifying investments as the opportunities arise.
Budget Context Expenses incurred by the NSGF are offset against interest earned by investments.
152 Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Nova Scotia Harness Racing Incorporated Business Plan 2004–2005 Table of Contents Mission ...... 155 Performance in 2003–2004 ...... 155 Strategic Goals ...... 156 Core Business Areas ...... 156 Budget Context ...... 158 Outcomes and Performance Measures ...... 159 Crown Corporation Nova Scotia Harness Racing Incorporated Business Plans
owners and track management in Sydney Mission caused the closure of Tartan Downs between May and October. There was also The Nova Scotia Harness Racing no pari-mutuel wagering in Sydney during Advisory Committee is responsible for that period. The race track reopened in evaluating how best to spend the October, 2003 and had 10 race dates with government funding provided, while at purses of $7,000 for each event. However, the same time moving the harness the temporary closure depressed the racing industry to a more competitive, province’s total wager for the year, as well self-sufficient funding position. as reducing the total number of live race events. The Liaison Officer divided his time between carrying out tasks for the Nova Performance in Scotia Harness Racing Industry and the 2003–2004 new Maritime initiative. During the 2003–2004 fiscal year, a total of 94 live race dates were achieved with the assistance provided by the Government of Nova Scotia, and this assistance was also responsible for the successful Atlantic Sire Stakes races. A dispute between horse
2003–2004 Processed Claims
Special Stakes Races, Inverness, Truro, Tartan Downs $ 30,000
Atlantic Sire Stakes 200,000
Purse Subsidy Reimbursement 364,000
Matinee Tracks and 4H 5,000
Maritime Provinces Harness Racing Commission 97,000 *
Operational Costs (Meeting Expenses) 1,500 *
Liaison Officer $ 52,500
Projected Total For 2003–2004 Fiscal Year $ 750,000
* Projected Expenditures 155 Nova Scotia Harness Racing Incorporated
Strategic Goals Core Business • Strive to improve the product, namely Areas live harness racing, to be competitive Entertainment and Standardbred horse in the entertainment market. genetics have been the core businesses of • Improve relationships between racetrack Nova Scotia Harness Racing Inc. The management and the horsemen to treat entertainment aspect is comprised of three each other as partners rather than components: adversaries. 1. Live racing events/pari-mutuel wagering • Secure adequate long-term funding 2. Simulcast wagering/telephone account through government liaison and wagering corporate sponsorships. 3. Gaming/video lottery terminals • Improve media coverage of both live racing events and the industry generally. There is a need to grow the business in each component so that more funds are • Encourage continuing quality in the available for harness horse owners. Greater Standardbred horse for the harness incomes will peak interest in investing in racing industry. the genetics aspects of the industry and • Use the Nova Scotia Harness Racing drive values of breeding stock upwards. Industry Association to provide Pari-mutuel betting is a fundamental leadership of the industry in Nova Scotia. source of funding of the live racing events • Work towards expanding the product and a key attraction for those keenly into additional fields beyond live interested in the gaming aspect of live racing events and offer alternative harness racing. forms of gaming and sports to generate Unfortunately, a dispute between horse interest and income through improved owners and track management in Sydney “entertainment centres.” temporarily shut down pari-mutuel betting and live racing at Tartan Downs. It also resulted in fewer live racing events for the province in total. The purses at racing events are very dependent on government funding support. Funding was reduced by $50,000 in 2003–2004, but closure of Tartan Downs allowed funds to be divided 156 Crown Corporation Nova Scotia Harness Racing Incorporated Business Plans
by two tracks rather than three. It also Genetics allowed the allotment to the Atlantic Sire There were 401 Maritime-bred horses Stakes to remain at the 2002–2003 level. competing outside of the region in 2003. Purses at Inverness Raceway were higher They generated earnings in excess of $4 than previous years, and horse numbers million and were involved in over 7,000 were up significantly. total starts. The Atlantic Breeders’ Crown Simulcasting of racing events beyond the showcases the best of Maritime breeding, local raceways continues to be a major and the event will be held in Truro in 2004. supporting funding source for the industry, Three of the top six drivers in Canada making up 88 per cent of wager income. A (wins) have Maritime roots, and four have new teletheatre site has been approved for earned in excess of $2 million in earnings Inverness Raceway in Port Hawkesbury. as trainers. Standardbred horses represent a The Canadian Pari-Mutuel Agency reduced rural economic development opportunity. its requirements for raceways to be eligible Horse production facilities can be to establish teletheatres to fewer than 50 established on sites where other forms of race dates and has to be approved by the agriculture cannot exist because horses Maritime Provinces Harness Racing have an esthetic appeal. The breeding, Commission. Smaller tracks such as rearing, and training of the Standardbred Inverness and Tartan Downs can now horse are key activities for both the farming negotiate sites within their market areas. communities of Nova Scotia and the live
Video lottery terminals (VLTs) continue to racing events at the province’s three be viewed as integral to the development of raceways. raceway entertainment centres.
157 Nova Scotia Harness Racing Incorporated
Budget Context Actual Forecast Estimate Revenues 2002–2003 2003–2004 2004–2005 ($) ($) ($)
NS Funding (NS Gaming Corp.) 750,000 750,000 750,000
NS Funding (NS Agr. and Fisheries) 50,000 — —
Total Revenues 800,000 750,000 750,000
Expenditures
Special Stakes 30,000 30,000 —
Atlantic Sire Stakes 200,000 200,000 200,000
Purse Subsidy Reimbursement 430,000 364,000 393,500
Maritime Provinces 84,551 97,000 100,000 Harness Racing Commission
Operational Costs— 1,416 1,500 1,500 Meeting Expenses
4-H and Matinee Tracks 5,000 5,000 5,000
Liaison Officer Position 48,965 52,500 50,000
Total Expenses 799,932 750,000 750,000
Even though funding to the industry was reduced by $50,000 because Agriculture and Fisheries did not provide any funding, the Atlantic Sire Stakes allotment was maintained at $200,000. Officiating costs continued to grow and were projected at $97,000 where the previous year was less than $85,000. Purse subsidy reimbursement dropped from $430,000 to $364,000. Because Tartan Downs had only 10 live race dates that were funded by the track, purse assistance at the other two track locations was not adversely affected by the reduced allocation.
Operating Costs—Meeting Expenses (exclusive of administration costs) to manage the fund continue to run around $1,500 annually. An allocation of $5,000 continues to be set aside for 4-H and matinee tracks. Expenditures for the liaison officer will cost close to $52,000 with the additional Maritime initiative activities.
With three tracks racing this coming fiscal year, there will be a challenge to divide the purse subsidy reimbursement. The horse owners and owners of Tartan Downs have reached a five-year agreement. Officiating costs are also growing, so the expectation is that the costs will be approximately $100,000 in 2004–2005.
158 Crown Corporation Business Plans arget Market existing and new additions Improved income for horse owners Attract patrons Long-term agreements Strategies to Achieve T arget 2008 Increase live race events Increase gross bet by 10% Minimum purse $1000 to $2000 Higher attendance Measure T otal wager: $11.2 million 94 T 413 71,800 2003 mance Measures ear for 2001 gross bet: $12.8 million 2002: 403 owners 2001: 70,000 2002: 100 race dates Base Y Entertainment Measure Increase in live race events Amount of bet # of owners Attendance Core Business Area 1 Outcomes and Per Outcome More live races Increased bet More horse owners More entertainment options 159 arget Promote the horse race by 10% Investment in breeding stock and property race card Strategies to Achieve T arget 2008 Adequate minimum: 60 Horses per race event Increase prices for NS-bred horses Measure T artan Downs had raced the full season. 490 $5400.00 2003 ruro and Inverness in 2004. ear 2001: $4400.00 2001: 480 Standardbreds Base Y y is still valid. artan Downs and we anticipate racing in 2004. Genetics ruro Raceway and Inverness due to closure of the one track. vg sales value Measure Horse population ruro brought an average price of $5,400, a $1,000 increase over the 2001 average. A The fall sale of yearlings in T Horse quality has improved and there were more horses on the race cards at T The long-range strategic plan for the industr The total wager in Nova Scotia would have been slightly higher than the previous year if T Higher purses were paid out at T There were fewer live race dates in 2003 because one of the tracks was closed for a good part season. A five-year agreement was reached at T Core Business Area 1 Outcome More horses in race cards • • • • • • • 160 Greater interest in horse ownership Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Nova Scotia Housing Development Corporation Business Plan 2004–2005 Table of Contents Mission ...... 163 Planning Context ...... 163 Strategic Goals ...... 166 Core Business Areas ...... 167 Priorities for 2004–2005 ...... 167 Budget Context ...... 170 Outcome and Performance Measures ...... 171 Crown Corporation Nova Scotia Housing Development Corporation Business Plans
The corporation supports the province’s Mission housing initiatives to provide safe, affordable, appropriate, and sustainable To be a partner to Nova Scotians housing to low- and modest-income Nova in fostering healthy communities Scotians by managing the province’s social through housing. housing assets and providing financing tools for other housing solutions.
The corporation owns approximately Planning Context 11,590 senior and family public housing units, making it the largest residential The Nova Scotia Housing Development landlord in the province. The property Corporation is responsible for managing management for these units is delivered the province’s social housing assets and through seven housing authorities. The consolidating the revenues and housing authorities also administer the expenditures associated with operating Rent Supplement Program, which provides these assets. Its legislative mandate is set rental assistance to 800 low-income out in the Nova Scotia Housing households in private and non-profit rental Development Corporation Act. accommodations. The corporation also The Minister of Community Services is the provides another 1,540 housing units— corporation’s Chairperson, and the Deputy both rental units and homeowner units— Minister is the President. The Executive under the Rural and Native Housing Director, Finance and Administration, is Program. These public housing, rent the Chief Financial Officer of the supplement, and rural and native housing corporation. The department provides units house approximately 25,000 Nova management services to the corporation, Scotians. including financial management; property Challenges facing the corporation include management; program development, the following: evaluation, and delivery; research and • Managing and maintaining an aging policy development; and communications public housing stock, which continues and human resources support. An annual to need major capital expenditures on fee is paid by the corporation to the replacement and improvement to department for these management ensure that affordable housing services. Department staff work on behalf continues to be a viable option for of the corporation, but they are not direct families, seniors, and individuals with employees and they receive no low to moderate incomes remuneration from the corporation. 163 Nova Scotia Housing Development Corporation
• Financially assisting low-income • Providing financial assistance to help homeowners to undertake needed seniors to continue to live independently home repairs. Privately owned housing in their own homes. In 2001, in the province is old. Based on 2001 approximately 14 per cent of Nova census data, 47.4 per cent, or Scotians were 65 years of age or older, approximately 170,770, of the owner- and this percentage is expected to occupied homes in Nova Scotia were increase for the next 15 to 20 years. Some built before 1971. Of these homes, 21.3 small towns in Nova Scotia already have per cent were built before 1946. Older a high percentage of seniors (e.g., Town homes require ongoing maintenance of Digby, 26.5 per cent; Town of Windsor, and capital improvements in order to 23.3 per cent; Town of Truro, 20 per cent; provide safe and adequate housing and Town of Mahone Bay, 28.9 per cent)
• Developing an Asset Management Three federal/provincial agreements form Strategy to facilitate the establishment of the cornerstone of the corporation’s asset-based financial goals and promote operations. They are the Social Housing property-related decision making based Agreement (1997), the Affordable Housing on an appropriate balance of business Agreement (2002), and the Housing principles and public policy objectives Renovation Program Agreement (2003).
• Providing more-seamless service to Under the Social Housing Agreement, Nova housing clients through more Scotia’s annual federal funding for streamlined and coordinated services federal/provincial Social Housing Programs was capped at 1995–96 levels, and the • Providing affordable housing in the areas annual funding levels were set out until the of greatest need, given the declining year 2035 when the agreement expires. The population in rural areas and the rural- level of federal funding declines over time. to-urban shift in the spatial distribution The corporation must manage funding so of the province’s population. For that sufficient funds will be available in example, only 5 of 18 counties in Nova future years to support the federal/provincial Scotia experienced a net increase in Social Housing Programs, or the province will population between 1996–2001. The be challenged to provide additional funding counties with an increase in population to meet this need. Other factors that have an during this time period were Halifax impact on the management of these funds County (4.7 per cent), Antigonish County include such things as the increasing annual (0.1 per cent), Colchester County (0.1 per operation expenses for over 12,000 public cent), Hants County (2.6 per cent), and housing rental units due to inflation. For 164 Lunenburg County (0.1 per cent) Crown Corporation Nova Scotia Housing Development Corporation Business Plans
example, key expenditures are utilities, home renovate 850–1,500 housing units. The heating fuel, cost of maintenance, wages, federal government will provide $18.63 and capital improvements. Full funding of million in funding, provided that matching these cost centres is continuously challenged contributions are supplied by the province by inflationary pressures on prices. and other housing partners.
The department is continually exploring To deliver the funds available and ensure opportunities to generate additional funding that it is focused on the housing needs of and to put in place processes to promote low- to moderate-income households, the effective and efficient management. For Programs staff developed four housing example, the department has installed a programs: the Home Preservation Program; new property management software to the New Home Ownership Program, which improve our operating efficiencies in is restricted to identified urban areas of managing the corporation’s housing revitalization; the New Rental Program; properties. This new system is web-based and the Rental Preservation Program. software, which provides a sound foundation Construction has already begun on new for operations, both today and in the future. housing projects through the funds made As part of the Social Housing Agreement, the available by the Affordable Housing corporation assumed the administration of Agreement. A 15-unit project was completed approximately 220 third-party operating in Middleton, and a new home ownership agreements with 156 different co-operative project was announced for Halifax in and non-profit housing organizations. Under December 2003. Early in 2004 the the terms of the respective operating department issued a request for proposals agreements Programs Division staff provide (RFP) for new rental housing. As a result of annual subsidies to 220 housing projects. the RFP, Community Services will be in a These projects involve approximately 7,000 position to announce a number of new dwelling units and are located around the rental housing projects in 2004–2005. province. Activity has also begun under the Home Preservation Program, as approximately 30 In 2002, we signed the five-year $37.26 households were provided financial million Canada–Nova Scotia Affordable assistance to undertake major home repairs. Housing Agreement. This was an important step in support of Nova Scotians In November 2003, the Minister of in need of affordable housing, and it is an Community Services, in his capacity as important piece of the province’s housing Chairman of the corporation, signed a three- strategy. Under the agreement we will work year extension of the federal/provincial cost- with our housing partners to create or shared renovation programs. These include 165 Nova Scotia Housing Development Corporation
the Homeowner RRAP (Residential Over the years the province has delivered a Rehabilitation Assistance Program), the Residential Land Development Program. This Disabled RRAP, the Rental/Rooming Housing program is being phased out in response to RRAP, the Conversion RRAP, the Emergency the increasing ability of the private sector to Repair Program, the Home Adaptations for adequately supply the entry-level home- Seniors Independence (HASI) Program, and ownership market. The last phase of the Shelter Enhancement Program. These Millwood in Lower Sackville and Forest Hills programs assist low-income homeowners, in Cole Harbour, totalling 155 lots, is landlords, non-profit organizations and currently on the market and will be ready for shelters undertake needed repairs. The HASI home construction in the summer of 2004. program, in particular, provides assistance to The sale of these lots is expected to generate seniors to help them adapt their homes so a profit in excess of $2 million. that they can continue to live independently. RRAP also has a component to help homowners modify their homes for disabled Strategic Goals family members. The corporation’s total The goals of the corporation are RRAP budget in 2003–2004 was $8.7 million ($7 million from the federal government and • to foster healthy communities through $1.8 million from the provincial housing government). • to ensure a supply of safe, appropriate, Also, the corporation administers Canada affordable, and sustainable housing Mortgage and Housing Corporation’s • to optimize access to safe, appropriate, (CMHC) mortgage/loan portfolio for Nova affordable, and sustainable housing Scotia. In addition, the corporation is These goals are consistent with and support working with other program units within the priorities of the Government of Nova Community Services and with the Scotia. Through housing programs, we Department of Finance to provide direct recognize that safe, appropriate, affordable, lending to housing-related projects for long- and sustainable housing is a significant term interest-rate risk reduction. Among the contributor to the health of our communities projects assisted are community-based and to the personal well-being of all Nova residential projects for the Community Scotians. Good housing provides the Supports for Adults Program, which provides environment and base needed to effectively support services to developmentally deliver other social programs, such as home challenged Nova Scotians. The corporation’s care, early childhood development, and assistance will help stabilize the per diem education. In particular, it has a lasting 166 funding component for these projects.
Crown Corporation Nova Scotia Housing Development Corporation Business Plans
effect on children as research has shown that • providing mortgage guarantees and/or poor housing conditions have a detrimental financing to qualifying housing projects impact on early childhood development. • managing the corporation’s assets to Community Services’ housing programs protect the province from loss keep homes safe and comfortable for Nova Scotians, and these programs provide employment to tradespeople across the Priorities for province. 2004–2005 Nova Scotia has a high percentage of seniors compared to many other provinces. In selecting priorities for the business plan, It is recognized that seniors tend to remain selection criteria were developed. These healthier and more confident, the longer include, for example, looking at proposed they are able to “age in place” in their own priorities in light of such things as best homes or in supportive environments. practices, trends, and research findings; Community Services’ housing home congruency with the corporation’s Mission repair/adaptation programs help seniors and Strategic Goals and government’s adapt their homes so that they can remain objectives; sustainability in terms of in their homes and continue to live financial resources and staffing; and independently. In addition, the department whether the priority is measurable. continues to make adaptations to its senior The following are the corporation’s four public housing projects to assist senior priorities for the 2004–2005 fiscal year. tenants age in place so that they can continue to live independently. Priority
• Implement the Risk Management Core Business Strategy developed in 2003–2004. Areas In 2002–2003 the provincial Auditor General recommended that the In support of the Department of department put in place a risk- Community Services’ housing mandate, management strategy to monitor and the corporation’s core businesses are control risk. A strategy was developed in • managing the financial contributions of 2003–2004 and will be implemented in the provincial and federal governments 2004–2005. This is very much in keeping to social and affordable housing with government’s priority of fiscal responsibility and accountability. • managing the social housing portfolio 167 Nova Scotia Housing Development Corporation
Priority All jurisdictions that have signed a social housing agreement with the • Initiate an evaluation project on the federal government, for example programs under the 1997 Canada Newfoundland and New Brunswick, are Nova–Scotia Social Housing Agreement subject to the five-year program based on the evaluation framework evaluation requirement. Therefore, project to be completed early in the early in 2004–2005, the department will 2004–2005 fiscal year. consult with Newfoundland and New Under the Canada Nova Scotia Social Brunswick to explore the possibility of Housing Agreement, Nova Scotia must, conducting joint program evaluations. every five-years, evaluate the social This joint effort would enable the three housing programs it administers. In provinces to share expertise and to pool 2003–2004 work began on an resources. Interprovincial co-operation evaluation framework. With the and collaboration are possible because framework project to be completed many of the housing programs are the early in the 2004–2005 fiscal year, the same in the three provinces. task for the remainder of the year will be to begin the evaluations of the five Priority social housing program areas. • Continue to implement the Affordable These evaluations represent a major Housing Program. undertaking. The department The Affordable Housing Agreement anticipates completing evaluations for involves federal funding of $18.63 the Rent Supplement, Urban Native, million, along with matching and Rural and Native Programs in contributions from the province and 2004–2005. The overall purpose of the our housing partners. This year, staff evaluations is to provide the have been working in consultation corporation with information on the with community agencies, non-profit performance, results and cost- organizations, and the private sector to effectiveness of the housing programs identify areas of need across the covered by the agreement. This province and have been conducting information will help the department research to develop criteria for new develop processes for enhancing programs to be established under the existing program management. Canada–Nova Scotia Affordable Housing Agreement.
168 Crown Corporation Nova Scotia Housing Development Corporation Business Plans
In December 2003 Community Services have application include facilities under announced the development of six the Community Supports for Adults semi-detached homeowner units in Program, Family and Children’s Services Halifax under the New Home residential facilities for children, and Ownership Program. This program is workshops funded through Employment restricted to designated urban areas of Support Services. There is also the revitalization. In terms of major home potential to make these services broadly repairs, by the end of the year, available to housing and other facilities approximately 30 households received owned and operated by third parties. financial assistance under the Home Preservation Program. The department is also in a good position, in 2004–2005, to initiate projects under the New Rental Housing Program given the Request for Proposals for rental housing projects that was issued at the end of the 2003–2004 fiscal year.
Priority
• Complete the integration of Housing Services, including the building technology section, into the department’s Program Division.
This integration is part of the department’s 2003–2004 organizational re-alignment, which created a new Programs Division and consolidated Community Services’ regional office structure. These changes will enable the department, for example, to take full advantage of the building support services and expertise that have historically rested with Housing Services as a separate division. The other program areas where these services 169 Nova Scotia Housing Development Corporation
Budget Context The following two tables provide information on the corporation’s funding and expenditures.
Table 1. Nova Scotia Housing Development Corporation Funding Funding Source 2002–2003 2003–2004 2004–2005 Actual Forecast Estimate ($) ($) ($)
Revenue from Government Sources 69,860,000 71,850,000 69,066,000 Revenue from Rents 48,624,000 48,824,000 49,524,000 Interest, revenue from Land Sales 6,197,000 3,400,000 6,200,000 and other revenue Total Funding 124,681,000 124,074,000 124,790,000
Table 2. Nova Scotia Housing Development Corporation Expenditure Expenditure Source 2002–2003 2003–2004 2004–2005 Actual Audited Forecast Estimate ($) ($) ($) Interest on Long-Term Debt 29,407,000 28,200,000 27,200,000
Property Management 40,980,000 41,800,000 41,800,000 and Operations Maintenance and 18,156,000 18,700,000 19,183,000 Capital Improvements
Transfer to Housing Services* 19,696,000 19,674,000 19,500,000
Amortization of Investment 9,546,000 10,100,000 10,800,000 in Social Housing Administration Fee and 6,878,000 5,600,000 6,307,000 Cost of Land Sold Total Expenditures 124,681,000 124,074,000 124,790,000
Note: Under the terms of the Canada Nova Scotia Social Housing Agreement, Canada Mortgage and Housing Corporation transfers the federal subsidies to the corporation monthly. A portion of this funding is then transferred to the Programs Division of the Department of Community Services for Social Housing program subsidies.
170 Crown Corporation Business Plans arget arget Continue to foster and pursue partnering opportunities with other departments and government agencies. Continue to monitor and pursue opportunities generate new revenues In the short term, conduct initial five-year program evaluations for the housing programs department assumed under terms of the 1997 Canada–Nova Scotia Social Housing Agreement. • Strategies to Achieve T • • Strategies to Achieve T ojects arget 2004–05 arget 2004–05 Assist a minimum of 3 housing projects per year T T The target is to ensure existing programs operate within the funding available ear) ear) : 2001–02/BY 1 housing project 2002–03: 6 housing projects (BY= Baseline Y Data (BY= Baseline Y Data Based upon current program revenue and expenditures projections, the current annual federal funding will decrease over the life of agreement, which expires in 2035 mance Measures for s social housing portfolio ces available ovince’ ovide mortgage guarantees and/or financing to qualifying housing pr Pr Manage the pr Number of qualifying housing projects receiving mortgage guarantees and/or financing assistance Measure Measure Projection of the financial resour to meet anticipated Canada–Nova Scotia Social Housing Agreement expenditures Core Business Area 2 Core Business Area 1 Outcome Government has additional options in managing capital financing for government- sponsored housing Outcomes and Per Outcome
Financially viable social housing portfolio 171 arget arget arget . ork with individual co-operatives and non-profit housing Deliver funding made available under the Canada–Nova Scotia Housing Renovation Program Agreement signed in 2003. Historically 100% of the available funds have been delivered each fiscal year Continue to partner with the co-operative sector on training and education on developing a co-operative network to build capacity and increase opportunities for information exchange. W projects to assist and train management. Implement the Canada–Nova Scotia Affordable Housing Agreement through partnerships with community-based organizations, municipalities, and the private sector to create or renovate housing units. • • • • Strategies to Achieve T Strategies to Achieve T Strategies to Achieve T ograms eement om loss ch 31, 2006 eement Pr ogram Agr arget 2004–05 arget 2005–06: arget 2004–05 arget 2004–05 T Continue to spend all funds available 75% Fully commit all funds available under the agreement by Mar T T T ovince fr ear) ear) ear) : 62.5% : : 68% 71% Committing otect the pr formance measure for this core business.) 2002–03 BY 1,021 households 2000–01/BY 2001–02: 2002–03: 2002–03/BY Committed $750,000 for a 15-unit project in Middleton 2003–04: $1.24 million. (BY= Baseline Y Data Data (BY= Baseline Y (BY= Baseline Y Data s housing to pr ve Deliver the Canada Nova Scotia Housing Renovation Pr Manage the corporation’ Deliver the Canada–Nova Scotia Affordable Housing Agr centage of co-operative and non-profit Number of households assisted through funding made available under the Housing Renovation Program Agreement Measure housing organizations that have adequately funded reser Per Affordable Housing agreement funds committed to date on creating and renovating housing units Measure Measure ve funds are Core Business Area 5 Core Business Area 4 Core Business Area 3 Better overall condition of existing owner-occupied homes in Nova Scotia. Outcome Financial reser adequate; risk of loss to the province is minimized Outcome More households in safe, appropriate, affordable and sustainable housing Outcome 172 (Note: This is a new core business for the corporation; therefore we are adding per Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Nova Scotia Liquor Corporation Business Plan 2004–2005 Table of Contents Mission ...... 175 Planning Context ...... 175 Strategic Goals ...... 177 Core Business Areas ...... 177 Priorities for 2004–2005 ...... 184 Budget Context ...... 187 Outcomes and Performance Measures ...... 188 Crown Corporation Nova Scotia Liquor Corporation Business Plans
customer’s discretionary income. In this Mission changing environment, technology, convenience, service, and product selection • provide a consistently high level are key to modern retailing. of customer convenience and service The NSLC operates in a mature industry in • support initiatives on the responsible Nova Scotia where over 90 per cent of the use of beverage alcohol and operate province’s population lives within minutes in a socially responsible manner of NSLC retail outlets. Growing its business • support employees in developing will require new approaches to the business. their skills and abilities in an organization focused on achievement, The NSLC’s future success depends on its equality and continuous learning ability to respond to these realities and provide shoppers with a retailing experience • support economic development of that meets and exceeds their rapidly the beverage alcohol industry in evolving needs. The long-term earnings Nova Scotia growth resulting from focusing on customer • generate revenue through effective and expectations will be achieved through efficient retailing. ongoing investments to all aspects of the business. The Nova Scotia Liquor Corporation (NSLC) is a Crown corporation governed by the Customer Base provincial Liquor Control Act. Through this The population base of Nova Scotia is legislation the NSLC is mandated to retail expected to remain relatively stable, with no beverage alcohol in a socially responsible major increase or decrease in population manner, creating returns to our shareholder. expected over the period of this business plan. However, there are significant changes occurring within the population of the Planning Context province that impacts current and future The NSLC is competing in a retail business practices of the NSLC. Population marketplace that is rapidly changing to shifts, in particular urban/rural shifts and meet increasingly sophisticated and changes to the age of the population, impact demanding consumer needs. Retailers are the delivery of our retail offer. According to constantly evolving to provide a more Statistics Canada, Nova Scotia’s population customer-sensitive environment in order to growth is occurring primarily in the Halifax maintain and increase earnings. The NSLC Regional Municipality and the median age is competing directly for a share of the of the population is increasing. 175 Nova Scotia Liquor Corporation
Research also shows that 65 per cent of the In this environment, retailers are facing Nova Scotia population is of legal age to challenges in attracting and, more consumer beverage alcohol, while 26 per significantly, keeping qualified staff. cent do not drink. Retailers face the need to make substantial investments in technology and Economy infrastructure—both on the retail side and in supply chain logistics. The retail world is The Atlantic Provinces Economic Council advancing in its understanding of how to (APEC) projects that in 2004 Nova Scotia build better customer relationships and at will lead the Atlantic Provinces in growth the same time deliver improved bottom- with a projected increase in Gross Domestic line results. Product of 2.8 per cent. According to APEC this growth will be driven by increased With 100 retail outlets in the province, and consumer spending as the government’s 10 $435 million in sales, NSLC is a major per cent tax reduction and reduced auto retailer and is experiencing all the insurance premiums give consumers more challenges common to the Nova Scotia disposable income. As well, APEC credits retail environment. This coming year will increased investment in offshore oil and see a continued focus on the cultural, gas exploration as an additional factor in organizational, and staffing changes Nova Scotia’s projected growth for 2004. necessary to ensure that NSLC can The unemployment rate is expected to successfully meet these challenges.
remain unchanged in the 9 per cent range APEC is projecting a 4.5 per cent increase in for the 2004 business period, while inflation retail sales during 2004 for Nova Scotia. This will drop considerably from 3.5 per cent in is a marked increase from the modest 1.6 per 2003 to 1.5 per cent in 2004. cent increase in retail sales experienced during 2003 and will have a significant Retail Environment impact on the NSLC’s bottom line. The retail environment in Nova Scotia, as elsewhere, is undergoing significant change. Labour Relations
Consumers are better educated, reflect NSLC has three groups of unionized greater diversity, have higher expectations, employees, each with its own collective and understand their shopping alternatives. agreement. All three groups are represented Retailers are responding by investing in by the Nova Scotia Government and systems, tools, and technology to allow them General Employees Union (NSGEU). to better understand and measure the drivers Unionized employees include many office of success in this changing retail landscape. 176 staff, all permanent part-time and full-time Crown Corporation Nova Scotia Liquor Corporation Business Plans
store clerks and store managers, as well as personality that appeals to all NSLC most staff in the Distribution Centre. All stakeholders in order to reinforce the three collective agreements expire during company’s overall strategic direction. the upcoming fiscal year. • Create and implement a vision and set In recent years, NSLC and NSGEU have of shared values that will enable the benefited from a joint commitment to open NSLC to become a world-class retail communications and problem solving. The organization. number of grievances has fallen, and there • Continue to improve the governance of is general recognition that the relationships the organization by striving to have improved from years gone by. This establish best practices for the determination to work together to resolve supervision, accountability, and issues as they arise provides a constructive strategy of a Crown corporation. context in which to negotiate three new collective agreements. Core Business Strategic Goals Areas The NSLC has identified six strategic goals 1. Store Development and Facilities to guide its operations during this period: Management • Meet or exceed revenue and earning The NSLC Development Group is organized commitments to our shareholder this into two distinct operating units: Real Estate year with a focus to increase Development and Facilities Management. profitability through investment over Real Estate Development is responsible for the longer term. sourcing new store opportunities, including • Develop a culture of knowledge, the planning, design, and construction advice, and sales throughout the entire efforts required, and for leasing organization in order to better serve administration for the retail network. The our customers. Facilities Management division is mandated
• Attract, develop, and retain employees the responsibility for the maintenance of the focused on delivering a customer- existing store network as well as the centred, friendly, and knowledgeable Distribution Centre/Head Office complex. retail experience. The Development Group contributes to the
• Develop and implement a corporate success of other NSLC divisions as it works to identity that conveys a distinctive continually improve the store network—both 177 Nova Scotia Liquor Corporation
the viability of the individual store locations • to minimize capital expenditures and the condition of the property—to ensure through value-engineered turnkeys or that NSLC meets the changing customer other cost saving initiatives expectations of selection and service. • to sell surplus property The Development Group is preparing a • to partner with firms with construction Store Development Plan to best determine expertise and/or available properties to the location and size of stores in the minimize any delay in meeting the respective markets. New full-service stores aforementioned objectives. are planned where demand is currently underserved, and other stores are identified The Development Group’s strategy that best for relocations or upgrades to interiors, meets these priorities is to actively pursue lighting, or signage. In addition, new “store in store” opportunities with other concept NSLC retail outlets may be retailers that complement our business. introduced during the year and new agency stores may be considered for underserved 2. Operations markets outside the HRM. All projects are Primarily responsible for the operation of funded within the corporate capital plan. NSLC’s 100 retail locations, the Operations The Store Development Plan is guided by Division encompasses all licensee sales the following business objectives: (bars and restaurants for example), as well as sales to agency stores and private wine • to reduce base rents across the network, and specialty stores. year over year, lowering operating expenses NSLC’s retail operations continue to focus on improving customer service as a vital • to “right-size” our network stores to component of overall customer satisfaction. meet the product requirements There is a clear recognition that well- provided by the Merchandising Plan trained, knowledgeable, and attentive • to “right-locate” our network stores to retail customer service staff is the key to increase visibility, access, and proximity providing an enhanced level of customer to consumers—all towards increasing service. This year there is a continued focus revenue on staff selection, development, and
• to renovate or re-energize our store education, as well as on improvements to interiors to better meet our customer the systems and tools provided to allow expectations them to be top performers.
• to minimize any business interruption The Operations Division will increase 178 due to construction or renovations resources dedicated to improving and Crown Corporation Nova Scotia Liquor Corporation Business Plans
developing the indirect sales channels end of the first quarter of 2004–2005. The (licensees, agency stores, etc.) with a greater timetable for individual system replacement emphasis on efforts to create effective or new information systems will set by the business partnerships. In total, these business according to business needs alternative sales account for almost 20 per prioritization. Two systems are already cent of NSLC’s total sales volume. This is an under development for delivery this fiscal important element of our business that will year: a warehouse management system to benefit from more focused attention this year. improve inventory controls and warehouse efficiency and a central repository for data 3. Information Technology and decision-support tools that will improve the information available to support The Information Technology division of the management decisions. NSLC provides support for information systems. This focus also enhances the 4. Human Resources NSLC’s strategic planning and business analysis by using the latest retail systems to As NSLC continues to invest in developing further understand individual markets and and modernizing its business operations, a customer trends. strong focus on the people side of the business is essential. During times of The current information systems at the significant cultural and organizational NSLC are outdated and not adequately change, investment in supporting and staff integrated. Basic day-to-day operations are development people is a critical component supported, but there is little capacity to of success. enable growth or to support a dynamic business plan. The Human Resources function continues to evolve to be less administrative and more Over the next three years most, if not all, of of a business partner within the the key information systems will be replaced organization. In support of corporate or significantly upgraded. This includes objectives key initiatives in Human application software, supporting hardware, Resources include: and communications networking for our head office and point-of-sale systems and • streamlining the organization’s hiring the communications network to the stores and selection processes through the across the province. In addition, the internal application of new technology capacity of the department will need to be • continued enhancements to performance- aligned with current business needs. management tools to support employees A three-year IT renewal plan is under in achieving success development and will be completed by the 179 Nova Scotia Liquor Corporation
• better systems and education to The external communications focus will see support a safe and healthy workplace a renewed effort to work with news media to provide timely and clear information on • learning and development initiatives the NSLC’s business. In addition, the team centred on improving customer service will develop a community-relations • follow-up to Employee Survey results strategy designed to provide more direct • improved access to and use of HR data information about the company’s activities to support decision making in every community the NSLC serves. The introduction of a new corporate 5. Corporate Communications identity for the NSLC during the upcoming The NSLC has established a new Corporate year will be a primary focus of the Communications division to improve Corporate Communications division. openness and transparency with all stakeholders. Working with all divisions of 6. Social Responsibility the organization, the Corporate The promotion of the socially responsible Communications team will modernize all use of beverage alcohol is a legislated communications policies and procedures mandate of the NSLC. The NSLC’s Social while designing and implementing a Responsibility Committee is chaired by a reputation management strategy for the member of the Board of Directors and company. Proactive internal and external includes representatives of key industry communications initiatives will be vendors and community groups. undertaken, including a restructuring of all Under the direction of the Corporate electronic and print publications. In addition, Communications team, the coming year the Corporate Communication department is will see a renewed focus on this now responsible for managing all advertising responsibility with the development of a of the organization with a focus on ensuring comprehensive cause-marketing strategy the consistency of the corporate identity that will bring a higher profile to this issue communicated by the company. in the province. New innovative Internal communications efforts will be approaches will be developed, making aimed at improving and increasing the ample use of the knowledge of the key frequency and quality of information stakeholders in their promotion of the provided to all employees. Working with responsible use of beverage alcohol. Information Technology, Corporate Communications will develop new methods of providing timely information and 180 feedback to all staff. Crown Corporation Nova Scotia Liquor Corporation Business Plans
7. Merchandising Strategy Beer Category
A key business strategy of the NSLC is to The NSLC Product team continues to focus redefine and restructure the merchandise on development of the Beer category offered through our sales channels, through increasing our product selection increase our selection, and target the and targeting emerging lifestyle trends. The growing demands and diversity of our NSLC has been encouraged by the sales customers. The NSLC has redefined its growth and our customer response to these product offering to ensure that it is truly new initiatives. The domestic brand offering customer focused and merchandise driven. continues to see positive growth fueled by As a result, the NSLC has implemented a aggressive marketing programs, positioning strategic Category Management Program them as premium beers capable of for growth and development in all competing with beers from around the beverage alcohol categories. world. The specialty beer growth has again seen double-digit increases as the NSLC Spirit Category expands our selection and continues to For the first time in five years, the NSLC has position our Beers of the World Program increased sales in the Spirit category. This is with a consumer learning and development the result of a number of category approach. Lifestyle trends in beer over the initiatives focusing on consumer lifestyle next year will see an increased emphasis on trends, strategic positioning of entry-level, light, low-calorie, and low-carbohydrate mid-range, and premium spirit products, beers, along with the introduction of and the implementation of defined flavoured beers. segmented category channels that target Cooler Category consumer purchasing preferences. New initiatives such as the introduction of We expect to see the explosive growth in flavoured alcohol beverages (FAB) and the this category begin to level out as younger, Rum Shop are examples of product trendy consumers begin to move back into segmentation and marketing targeted at the spirit category through programs such specific consumers within the spirit as FAB. Managing the product assortments category. This segmented approach has through defined channel segmentation will resulted in a much more focused product help to offset some of that migration as new assortment and has attracted younger consumers will be attracted to this category consumers back to this category, as well as because of its focus on lifestyle marketing. providing a much more diverse product assortment to existing spirit consumers in Nova Scotia. 181 Nova Scotia Liquor Corporation
Wine Category 9. Supply Chain
Targeted as our key growth category, both With the continued expansion of the from sales and consumer acceptance, wines product offering, it is imperative that we have seen an unprecedented growth in the continue to enhance and optimize the overall category led by premium products. distribution network. How we manage the The NSLC will continue to utilize strategies product in inventory in both the to migrate customers to increasingly more Distribution Centre and in our retail outlets sophisticated products within this category. is critical to the NSLC’s success as an A number of new and innovative marketing efficient and effective retailer. programs were launched in this category The Distribution team will ensure this over the past year with outstanding optimization by a continued focus on consumer acceptance of the price, quality, inventory, warehouse, and logistics and variety of the offerings. The NSLC will management. This focus will ensure our continue to provide industry-leading success and will enable us to continue to direction and innovation in this category to migrate towards becoming a world-class our customers as we increase our product retailer. offerings and overall presence of wines. The continued focus on inventory 8. Marketing/Corporate Identity management will be assisted by the full implementation of a new Warehouse The NSLC Marketing Program supports Management System. This new wireless, current and long-term business plan paperless solution will allow the efficient objectives, provides directional growth for tracking of all inventories from entry into our category development. Our marketing the distribution centre to arrival at our strategies are focused on lifestyle retailing retail stores. This system is a real-time programs, consumer behaviour trends, and inventory system, which will also increase category product development. The primary the overall efficiency and effectiveness of driver of these strategies is our market warehouse operations. segmentation approach, which is based on ongoing consumer insight research. There will be a continued focus on logistics management within the NSLC in order to With the mandate to make the NSLC a improve efficiencies within the distribution modern retail organization, the Marketing network. The coordination of the logistics of and Corporate Communications groups domestic as well as international freight is will also be focused on the development of a significant cost to the organization. By a new corporate identity, positioning, and focusing in this area we will improve the personality for the company. 182 overall profitability of the organization. Crown Corporation Nova Scotia Liquor Corporation Business Plans
The NSLC Distribution team is focused on The division will focus on reducing re-engineering the supply chain process administration requirements of the store with an emphasis on initiatives that will network and on the need to monitor/balance improve our overall efficiency. Providing this information. These improvements will just-in-time inventory, optimal stock levels largely come from IT improvements in at retail locations, and increased inventory automating data collection from stores for productivity and turnover ratios are some both financial and payroll information. of the key areas targeted for increased The Finance Division’s Order Entry group efficiency. Category buying plans will be will continue to improve customer service linked directly to forecasting models, which to internal and external customers through will provide greater flexibility and training and increased product knowledge improved product flow through the supply and in consultation with Store Operations. chain system. The NSLC’s ability to leverage the resources of all our partners The overall objective of the Tendering and within the supply chain process is targeted Sundry Purchases Department, a new at improvements, which will see service addition to the Finance Division, is to levels increase and inventory ratios support corporate governance initiatives decrease resulting in substantial financial including the following: benefits for the NSLC. • Reviewing tendering process to ensure compliance with the organization’s 10. Finance Procurement Policies and Procedures.
The Finance Division of the NSLC compiles • Implementing central control of financial, volume, and budget information tenders by all departments to ensure of the Corporation and provides it to total compliance to policies and to stakeholders. Our mandate in 2004–2005 is have a central repository of all tender to improve the ability to deliver more contractual documentation. targeted, appropriate information through • The Sundry Purchases function will greater use of technology and system participate in implementing the new improvements. The Finance Division will Warehouse Management System to tighten reporting deadlines to provide more ensure that the control of Supplies and timely information, consult with Stationery inventory is efficient and stakeholders to improve readability and cost effective. information value, provide more concise information, and investigate alternative financial delivery methods. 183 Nova Scotia Liquor Corporation
11. Economic Development Priorities for As part of the NSLC’s statutory mandate and mission statement, economic 2004–2005 development of the beverage alcohol Goal 1 industry in Nova Scotia is a primary responsibility of the NSLC in conjunction • Meet or exceed revenue and earning with our local producers. Development of commitments to our shareholder this the production of beverage alcohol year with a focus to increase profitability products in Nova Scotia adds value through investment over the longer term. throughout the province, not only by producing high-quality products that are Priority recognized worldwide and enjoyed by One of the primary responsibilities of the consumers here and abroad, but also by NSLC is to return significant earnings of the contributing to our local economy through Corporation to our shareholder—the job creation, agricultural development, and Government of Nova Scotia. In delivering on the vitally important tourist industry. this aspect of our mission, all Nova Scotians benefit through increased resources to fund The NSLC is active in promoting local the programs and services required of product development through various government. The NSLC will contribute $181.7 retail marketing programs such as the Taste million to our shareholder in 2004–2005. of Nova Scotia initiative, which features locally produced wines and spirits, along In addition, the NSLC will develop a three- with Beers of the World, showcasing our year investment strategy that covers all local micro brewery products. The NSLC is operating divisions, which will result in active in participating and working with long-term earnings growth for the company. various agencies in development of local industry such as the Farm Winery Goal 2 Monitoring Committee. • Develop a culture of knowledge, advice, and sales throughout the entire organization in order to better serve our customers.
Priority With our goal to make the NSLC a modern retail organization, the company will put 184 in place a strategy that will begin to change Crown Corporation Nova Scotia Liquor Corporation Business Plans
the corporate culture to one of providing • better align retail staff compensation knowledge and advice to customers when with retail performance and customer they require it by satisfaction metrics
• improving product knowledge at the • expand and enhance training to support retail level through enhanced in-house store managers in providing customer- training and partnerships with service-skills coaching to retail staff industry experts
• better aligning reward and recognition Goal 4 efforts with desired customer service • Develop and implement a brand image behaviours that conveys a distinctive personality
• developing or sourcing improved retail that appeals to all NSLC stakeholders sales training material and programs in order to reinforce the company’s as well as training for licensee sales overall strategic direction. order takers Priority
Goal 3 Successful businesses view their corporate brand and image as a critical asset to be • Attract, develop, and retain employees developed, maintained, and enhanced. To focused on delivering a customer- successfully develop a consistent message centred, friendly, and knowledgeable across all critical points of contact that retail experience. stakeholders have with the brand, it is necessary to have a well-defined brand Priority strategy and positioning. The NSLC has attracted an exceptional A brand strategy must possess a defined level of people over the years dedicated to brand vision, as well as values and a the mission of the organization. The ability personality that ensure that every element of the NSLC to attract and retain the level of of the branding mix is maximized from employee required to make the company a nomenclature, corporate identity, internal modern retail operation requires a new and external communications, advertising, investment in our people. packaging, retail environment, and During the coming year, the NSLC will corporate culture.
• improve recruitment and selection During this fiscal year, the NSLC will through identification of competencies redesign its corporate brand to reflect the required to be successful in retail sales needs of a modern retail organization and and retail sales management its legislated mandate. 185 Nova Scotia Liquor Corporation
Goal 5 structure that ensures that the strategic direction and priorities of the shareholder • Create and implement a vision and set are implemented by an accountable of shared values that will enable the management team. NSLC to become a world-class retail organization. The board over the coming year will ensure that the strategic priorities outlined in this Priority business plan are executed in the best While the NSLC has operated on a mission interests of the organization. In addition, statement based strictly on the the Board is focused on ensuring that the requirements of the Liquor Control Act, a recommendations and action plans arising modern retail organization requires the from the operational and governance development of a shared vision and values. review conducted by the accounting firm Successful businesses are able to articulate Grant Thornton are implemented. their purpose. Having a clear vision The board will also focus on continued enables all business decisions to be made governance improvements that will see the through this focus. NSLC become a best-practices Crown As part of the new corporate brand and the corporation. development of a reputation management strategy the NSLC will create a defined vision and values that will be reflective of and embraced by all of our stakeholders.
Goal 6
• Continue to improve the governance of the organization by striving to be a Board that establishes best practices for the supervision, accountability, and strategy of a Crown corporation.
Priority The NSLC has substantially improved the governance and accountability of the organization since becoming a Crown corporation two years ago. The Board of 186 Directors has developed a governance
Crown Corporation Nova Scotia Liquor Corporation Business Plans
Budget Context
Actual Actual Forecast Budget % 2001–02 2002–03 2003–04 2004–05 Sales ($) ($) ($) ($)
Volumes: (hectos) 731,816 730,643 761,109 824,399
Sales 391,560,050 412,706,222 436,842,620 477,009,007 100.00%
Indirect Sales Discount (132,703) (326,341) (1,485,265) (1,531,627) 0.32%
Net Sales 391,427,347 412,379,881 435,357,355 475,477,380 99.68%
Cost of Sales 197,562,720 202,805,624 214,052,884 232,582,913 49.00%
Gross Margin 193,864,627 209,574,257 221,304,471 242,894,467 50.92%
Stores Operating Expense 34,736,661 36,001,425 36,532,500 40,655,765 8.52%
Gross Operating Margin 159,127,966 173,572,832 184,571,971 202,238,702 42.40%
Warehousing and Distribution 4,217,296 4,090,299 4,205,128 4,531,586 0.95%
Depreciation 3,432,056 3,787,095 3,489,700 4,889,221 1.02%
Administrative Expense 8,609,139 9,195,383 11,396,301 11,619,057 2.44%
Other Expense 2,649,868 2,162,924 1,847,800 2,510,631 0.53%
Other Revenue 3,695,117 4,242,877 4,512,800 4,672,414 0.98%
Net Operating (Before Employee Future Benefits) 143,914,724 158,580,008 168,345,842 183,360,621 38.44%
Employee Future Benefits 55,982 714,900 1,576,400 1,645,762 0.35%
Net Operating Income 143,858,742 157,865,108 166,769,442 181,714,859 38.09%
187
Nova Scotia Liquor Corporation
Outcomes and Performance Measures The NSLC will meet or exceed the following key financial performance measure for the organization:
Net Income Actual ($) Actual ($) Projected ($) Budget ($) Net Operating Income 143,858,742 157,865,108 166,769,442 181,714,859
Supporting Operating Initiatives shopping experience. The CSI is based on In managing the business, the NSLC uses 400 customer surveys conducted province- the following indicators to ensure wide each quarter, measuring the NSLC’s maximum shareholder return is achieved overall performance in meeting customer while operating a modern retail business. expectations. This is structured using an accepted measure in Customer Value Customer Satisfaction Index Management as our benchmark. Designed to further enhance our Customer The NSLC’s goal of achieving a 70 per cent Relationship Management, the NSLC satisfaction level in 2004–2005 on our overall initiated a Customer Satisfaction Index CSI is based on an accepted World Class Value (CSI) in 2003, which measures customer Management structure for customer satisfaction levels in five critical consumer satisfaction. Understanding customer attitudes, including product selection, expectations in all measured areas of the CSI, customer service levels overall retail assists the organization in understanding market trends and ensures that we are delivering what our customers expect.
188
Crown Corporation Nova Scotia Liquor Corporation Business Plans
Operating Expense Ratio (including employee future benefits—effective 2003) Actual Actual Projected Budget 2001–2002 2002–2003 2003–2004 2004–2005
11.9% 11.6% 11.7% 11.8%
Net Income Ratio Actual Actual Projected Budget 2001–2002 2002–2003 2003–2004 2004–2005
36.7% 38.3% 38.2% 38.09%
Supporting Operating Initiatives Human Resources Successfully conclude new collective Corporate Identity agreements with the NSLC’s three unions A new corporate identity is successfully this year. launched and begins to take hold with Design and introduce a new training stakeholders. program for NSLC employees that assists in
Distribution/Supply Chain creating a knowledgeable retail environment. The Warehouse Management System project is completed and operating Finalize and implement action plans from successfully. the 2003 Employee Survey and commence planning for follow-up survey Information Technology Over the next three years most if not all of Social Responsibility the key information systems will be Create and implement a new strategic replaced or significantly upgraded. approach to the socially responsible consumption of beverage alcohol. Store Development Complete and begin to implement a Store Development Plan to best determine the location and size of stores in the respective markets.
189 Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Nova Scotia Municipal Finance Corporation Business Plan 2004–2005 Contents Mission ...... 193 Introduction ...... 193 Planning Context ...... 193 Strategic Goals ...... 194 Core Business Areas ...... 195 Priorities for 2004–2005 ...... 196 Budget Context ...... 198 Outcomes and Performance Measures ...... 201 Crown Corporation Nova Scotia Municipal Finance Corporation Business Plans
from MFC participation, and municipalities Mission benefit from savings in the cost of administration on outstanding debenture To provide financing to its clients for issues. approved capital projects at competitive The corporation is governed by a Board of rates, within acceptable risk Directors appointed by the Governor in parameters, and to provide advice and Council. Forty per cent are appointed on the assistance to clients regarding financial recommendation of the Union of Nova management. Scotia Municipalities. Three full-time staff of the corporation are supported through staff and resources from the provincial Introduction Departments of Finance, Justice, and Service Nova Scotia and Municipal Relations. The Nova Scotia Municipal Finance Corporation (MFC) was established by an act of the Legislature of the Province of Planning Context Nova Scotia in 1979. The corporation’s The corporation faces a number of purpose is to provide low-cost financing to challenges and opportunities in meeting its its clients, which include municipalities, strategic goals in the upcoming year. municipal enterprises, school boards, and hospitals. All municipalities, municipal • The MFC must ensure that it has access enterprises, and school boards must to capital markets and that it has the finance, and hospitals may finance, their financial and administrative ability to external capital requirements through the meet local government demand for corporation. Exceptions occur for capital capital infrastructure funding. projects funded directly by the Province of • Identifying client needs and responding Nova Scotia (e.g., most school board capital to them. Local governments in Nova projects), short-term financing, and certain Scotia are encouraged to undertake projects for which funds may be borrowed long-term capital planning and explore from other governments. financing options. The MFC concept is widely used in Canadian • Building partnerships with organizations provinces as a cost-effective, efficient means such as the Federation of Canadian of raising long-term debenture funds to Municipalities to provide a conduit for finance municipal capital projects. Studies low-cost loans through the Green Fund. have shown that municipalities regardless of their credit ratings, receive interest savings 193 Nova Scotia Municipal Finance Corporation
• Keeping abreast of developments in local government capital finance. As a Strategic Goals specialist organization, the MFC is • To work with clients, the province, and challenged to develop, maintain, and the investment community in providing demonstrate expertise in local capital financing to our clients at government capital finance. competitive rates, within acceptable risk parameters, for their particular • Maintaining financial self-sufficiency. debt structure and timing needs. In order to meet its mandate, the corporation must remain economically • To provide a sustainable source of viable in both the short and long terms. financing to clients through prudent This includes a matching of assets and management of all financial aspects of liabilities both to amount and the corporation, which includes credit maturity, maintaining banking risk and asset/liability management. arrangements and credit facilities, • To explore and develop new methods credit risk, adequate reserves, and the and products for meeting the needs of ability to manage administration our clients through contact with the expenses within its budget. investment community, the public The major risk to the corporation is the sector, and academic research. availability of financial resources needed to • To help build financial management carry out its mandate. Some resources are knowledge in municipalities that directly under the control of the board, promotes municipal capital project whereas others are provided by provincial planning and financing. departments. The MFC will continue to work with these provincial departments to These strategic goals assist the MFC in align both sets of priorities. meeting its mission of providing low-cost municipal financing for capital infrastructure and long-term financial planning and support the provincial government’s priorities of economy, jobs, and growth. Capital infrastructure is a major component of economic development in both attracting and retaining business investment and promoting communities that are attractive places in which to live.
194 Crown Corporation Nova Scotia Municipal Finance Corporation Business Plans
• Prudent administration of the Core Business corporation’s financial resources to Areas ensure that the corporation’s administrative expenses and reserve 1. Provide low-cost funds to clients balances are within approved limits.
• Provide financing for clients’ approved 3. Explore improved methods and funding requirements by pooling these products in meeting client needs requirements and issuing debentures. Pooling of capital requirements allows • Maintain communication links with the MFC to issue debentures in the the investment community, public capital markets at rates lower than if sector finance practitioners, and single issues were placed for clients. academics and carry out research as required to enable the corporation to • Provide separate issues for single respond to changing client needs. capital projects in amounts sufficient to permit a public issue, provided they do • Prepare and review policy not preclude a pooled issue for other recommendations regarding the clients. corporation’s use of financial innovation techniques and instruments. • Perform the intermediary/conduit role in enabling municipalities to access low- • Assist local governments in evaluating cost loans from national programs and alternative methods of raising capital non-profit organizations, such as the project financing including partnerships Federation of Canadian Municipalities’ with the private sector. Green Fund. 4. Build financial management 2. Prudent financial management knowledge by encouraging to ensure a sustainable source municipal governments to adopt of low-cost funding for local and maintain a professional governments in Nova Scotia approach to capital project planning and finance • Ensure that an acceptable process is in place for evaluating the creditworthiness • Partner with municipal clients on the of the loans made by the corporation. topic of capital planning and finance through the identification of relevant • Ensure that the corporation’s assets and professional association resources. liabilities are matched in both amount and maturity. 195 Nova Scotia Municipal Finance Corporation
• Work with Service Nova Scotia and • Consider the capital financing needs of Municipal Relations and the Nova non-municipal borrowers when Scotia Association of Municipal approached by regional school boards Administrators in promoting an and district health authorities. informed and responsible approach to capital planning and finance. 2. Prudent financial management to ensure a sustainable source of low-cost funding for local Priorities for governments in Nova Scotia 2004–2005 • Obtain verification of creditworthiness from the Department of Service Nova The following details the actions, products, Scotia and Municipal Relations (for and services that the MFC intends to carry municipal borrowers) prior to setting out in order to fulfil the corporation’s the parameters for pooled issues. mission and meet its strategic goals. • Match the amount, term, and timing of 1. Provide low-cost funds to clients MFC debentures and loans to units.
• Meet all approved requests for debenture • Manage the MFC’s financial resources funding by issuing debentures for the (budget and reserves) as per policies amount required to meet municipal established by the corporation’s Board borrowing requirements (expected to be of Directors. in the $50–60 million range) and lending a similar amount to municipal 3. Explore improved methods and units and enterprises. products in meeting client needs
• Pooling of capital requirements allows • Consult with municipal officials on the MFC to access capital markets and capital financing needs and the achieve pricing based off the Province preferred features in the debentures of Nova Scotia spread. issued through the MFC.
• Facilitate the provision of low-cost • Consult with clients on additional Federation of Canadian Municipalities financial services that they may require. Green Fund loans, short-term loans, • Work with potential non-municipal and bridge-financing requests within clients on an “as requested” basis to established policies. identify the best ways of achieving client financing needs and MFC credit 196 quality considerations. Crown Corporation Nova Scotia Municipal Finance Corporation Business Plans
• Undertake a MFC role/program evaluation initiative with MFC clients and other stakeholders.
4. Build financial management knowledge by encouraging municipal governments to adopt and maintain a professional approach to capital project planning and finance
• Continue to provide a leadership role in the Government Finance Officers Association (GFOA)/Association of Municipal Administrators of Nova Scotia (AMA) initiative to promote the financial and budgeting policies of the GFOA for Canadian Municipalities to municipal governments in Nova Scotia.
• Establish committees, as required by the board, to study the merits of financial innovation regarding the introduction of new products and services.
• Work with the corporation’s lead managers and other members of the investment community, staff of the Nova Scotia Department of Finance, other municipal finance corporations, and others involved in municipal capital financing to identify evolving local government financial needs and the optimum means of satisfying them.
197 Nova Scotia Municipal Finance Corporation
Budget Context
Estimated Budget Expenditures
2003–04 2003–04 2004–05 Estimate Forecast Budget ($) Thousands ($) Thousands ($) Thousands Total Program Expenses: Gross Current 337.0 330.1 340.5 Net Program Expenses: 0.0 0.0 0.0 Net of Recoveries* (see note below)
Salaries and Benefits: Gross 241.1 240.2 232.8 Funded Staff (FTEs): Gross 3 3 3
* Note: The MFC is completely self-funded. The costs of administration are covered through an administrative fee that is levied on all municipal loans and from interest revenue earned on short- term investments
198 Crown Corporation Nova Scotia Municipal Finance Corporation Business Plans
Nova Scotia Municipal Finance Corporation Balance Sheet (as at March 31, 2003) (Audited)
Assets Current Assets: Cash $ 129,883 Short-term investments at amortized cost 5,461,055 Accrued interest receivable 10,371,094 Other receivables 1,904 Principal due within one year on loans to units 63,054,835 Long-term Assets: Loans to units 482,888,121 Less principal included in current assets (63,054,835) Investments at amortized costs 0 Deferred Charges: Discount on debenture debt 2,562,324 less accumulated amortization (1,592,606) Total Assets $ 499,821,775 Liabilities and Equity Current Liabilities: Accounts payable $ 47,199 Due to municipal units 1,175,055 Accrued interest payable 10,344,853 Principal due within one year on debenture debt 62,965,496 Accrued public service award 42,573 Long-term Debt: Debentures Payable 482,460,750 Less principal included in current liabilities (62,965,496) Deferred Credits: Discount on loans to units 2,557,525 Less accumulated amortization (1,593,637) Equity Reserve Fund 4,787,457 Total Liabilities and Equity $ 499,821,775
199 Nova Scotia Municipal Finance Corporation
Statement of Revenue, Expenses and Reserve Fund (year ended March 31, 2003) (Audited)
Revenue Interest on loans to units $ 30,454,163 Amortization of discount on loans to units 250,185 Interest on short-term investments 147,069 Current discount on loans to units 609,014 Total Revenue 31,460,431
Expenses Interest on debenture debt and short-term loans 30,442,061 Amortization of discount on debenture debt 252,257 Debenture issue expense 373,221 Administrative expense 288,964 Total Expenses 31,356,503
Net Revenue 103,928
Reserve Fund, Beginning of Year 4,683,529
Reserve Fund, End of Year $ 4,787,457
200 Crown Corporation Business Plans arget ork with other municipal issuers to reduce the spreads between provincial Maintain quality of portfolio Increase profile of MFC credit quality W and municipal issues • • • Ensure adequate credit approval system Ensure that credit enhancement and provincial approvals for borrowing guarantees are in place at the beginning of each fiscal year (Note: Market conditions and trends play a major role in the timing of debenture issue pricing) Strategies to Achieve T arget 100% Maintain spreads 2 to 3 3 to 6 2004–05 T mance Measures 100% 2 to 3 Same spreads 6 BP 11 BP 6 to 9 sub-sequent years) Data (for baseline and for , , efficiency/ Low-cost financing for clients centage of requests for financing oductivity verage number of weeks between verage number of weeks between Quality of credit enhancement used; spread off Province of NS in basis points (BP) that are similar to MFC spreads in other Atlantic provinces 5-year terms 10-year terms Per (both long term and short term) that received MFC financing A short-term loan requests and receipt of funds A long-term loan request deadline and pooled debenture issue pricing pr Measure (outcome-based; quality cost-effectiveness) o provide low-cost Core Business Area 1 Outcomes and Per Outcome (immediate or intermediate) Low-cost financing for clients T financing to clients in a timely manner 201 arget erify creditworthiness of loan applications with SNSMR prior to establishing Ensure that all loans are creditworthy Review the current creditworthiness procedure to ensure that it remains 100% effective V pooled issue limits. ces • • • Match the term and timing of MFC debentures loans to clients Monthly financial forecasts to the board Strategies to Achieve T esour s r arget 0 Maintain positive financial position Maintain matched amounts 2004–05 T 0 Recording net income at year-end Assets and liabilities are matched to term and timing sub-sequent years) Data (for baseline and , , efficiency/ ve balance and equity position Prudent financial management of all the corporation’ oductivity Client default rate (default is defined as failing to make a principal or interest payment) Reser of the corporation Matching of assets and liabilities: similarity of aggregate amounts, terms, and timing of debentures loans pr cost-effectiveness) Measure (outcome-based; quality ce of funding is available Core Business Area 2 Outcome (immediate or intermediate) 202 Ensure that a sustainable sour for financing requests from clients and to ensure the operation of the corporation Crown Corporation Business Plans vey in 2004–05 to establish baseline data arget and new targets Field visits with clients Presentations at AMA regional meetings and conferences Conduct a client satisfaction sur • • • Undertake MFC role/program evaluation with clients and other stakeholders Strategies to Achieve T vey arget 75% (contact with municipal clients); no baseline data for client satisfaction sur 2004–05 would establish the baseline data 2004–05 T 35% (field visits) N/A sub-sequent years) Data (for baseline and oducts in meeting clients needs , oved methods and pr , efficiency/ Impr centage of municipal units that oductivity Per are satisfied with products being offered by the MFC Effective programs directed at clients’ needs pr cost-effectiveness) Measure (outcome-based; quality Core Business Area 3 Outcome (immediate or intermediate) MFC client awareness of new financial products and features that may help municipal units Improved products that respond to clients’ needs 203 , it cannot control the outcome. arget Capacity building through training, education, and professional development Continued development of GFOA best practices for NS • • Enhanced use of MFC and/or AMA website for sharing best practices and financial information Continue to offer financial assistance in sponsoring professional administrator to attend the International GFOA Conference on an annual basis Strategies to Achieve T arget Additional four practices developed Maintain sponsorship Post recommended practices and programs offered on the website 2004–05 T oject planning and finance Four best practices developed Sponsor a professional financial administrator as nominated by a joint AMA/MFC Committee MFC website contains basic information on the corporation Data (for baseline and sub-sequent years) ces— oach to capital pr ces and building of , ofessional appr , efficiency/ o build financial management knowledge by encouraging municipal government to adopt and maintain a T pr oductivity Increased awareness of best practices for financial management Exposure to conferences that develop and promote best practices in financial management Broader access to financial resour efficient use of resour networks among financial administrators cost-effectiveness) Measure (outcome-based; quality pr Core Business Area 4 Outcome (immediate or intermediate) Note: These measures have been changed from the 2003–2004 Business Plan. The contained in Plan were outside of control corporation. The measures could be acted upon only through a decision of council. corporation influence those decisions education; however 204 Increased financial management capacity in municipal units and use of best practices and/or recommended practices in financial management decision making Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Nova Scotia Power Finance Corporation Business Plan 2004–2005 Table of Contents Mission ...... 207 Introduction ...... 207 Planning Context ...... 207 Performance in 2003–2004 ...... 207 Strategic Goal ...... 208 Core Business Area ...... 208 Priorities for 2004–2005 ...... 208 Budget Context ...... 208 Outcomes and Performance Measures ...... 208 Crown Corporation Nova Scotia Power Finance Corporation Business Plans
the balance defeased as per the agreed Mission schedule to December 31, 1997. In terms of the Nova Scotia Power To ensure that the debt of NSPC, Reorganization (1998) Act, NSPI was which is guaranteed by the province, reorganized as a holding company, NS is discharged in an orderly and Power Holdings Inc., in December 1998. timely manner. The holding company structure does not change the underlying obligations under the existing agreements. The holding Introduction company changed its name to Emera Incorporated on July 10, 2000. Under an Asset Transfer Agreement, dated August 10, 1992, Nova Scotia Power Corporation (NSPC) transferred all of its Planning Context existing assets, liabilities, and equity, NSPFC continues to be on target of meeting except for long-term debt and related its mission objective outlined above during sinking funds, to the privatized company, the course of the current planning horizon. Nova Scotia Power Inc. (NSPI), in exchange for matching notes receivable equivalent to outstanding long-term debt, matching notes payable equivalent to sinking fund Performance in assets, and an amount of fully paid 2003–2004 common shares. The latter were sold in a The outstanding debt continues to be secondary offering on August 12, 1992. defeased in accordance with the terms of Subsequent to the reorganization and the Defeasance Agreement, and the privatization, the business activities of NSPC defeasance assets are adequate to ensure continued under NSPI. Concurrently, the the repayment of all NSPC debt guaranteed Nova Scotia Power Corporation changed its by the province. name to Nova Scotia Power Finance Corporation (NSPFC). NSPFC retained the long-term debt, which is guaranteed by the Province of Nova Scotia, and the related sinking funds. The entire original debt of $2,152,879,732, guaranteed by the province, was offset by sinking funds and 207 Nova Scotia Power Finance Corporation
Strategic Goal Budget Context After December 31, 1997, to monitor the NSPFC has no employees. NSPI executes adequacy of the defeasance portfolio and to necessary transactions to create and ensure the repayment of all NSPC debt maintain the defeasance portfolio. The guaranteed by the Province of Nova Scotia, monitoring of NSPI debt defeasance is at the respective debt maturities. performed by a Board of Directors, appointed by the Government of Nova Scotia, with staff support from the Nova Core Business Scotia Department of Finance. The Area accounting firm of Deloitte & Touche certifies the defeasance assets arranged by NSPC. NSPFC is responsible for monitoring the Under the terms of the privatization defeasance and repayment by NSPI of its agreements, NSPI is responsible for the debt guaranteed by the Province of Nova payment of all NSPFC expenses. Scotia. NSPFC holds notes payable by the NSPI in case of default of NSPC debt repayment. The final guaranteed note matures February 26, 2031. Outcomes and Performance Priorities for Measures 2004–2005 Outcome The entire outstanding debt is defeased in 1. To ensure continuing progress towards accordance with the Defeasance Agreement. elimination of NSPC debt guaranteed by the Province of Nova Scotia and Measure defeased by NSPI. The Defeasance Agreement required the 2. To ensure that the defeasance assets are defeasance of a minimum of $1,381,600,000 of such a quality that the defeasance of outstanding NSPC debt by December 31, program will have a very high likelihood 1997. This minimum has already been met of achieving its goals. and surpassed, $1,440,290,000, having been defeased by March 31, 1997.
208 Crown Corporation Nova Scotia Power Finance Corporation Business Plans
Outcome Defeasance assets are adequate to ensure the repayment of all NSPC debt guaranteed by the province.
Measure Outstanding debt as at 31 March 2003 was C$ 700,000,000 and US$ 300,000,000; defeased assets as at March 31, 2003 had the same principal amounts and market values of C$ 1,045,651,000 and US$ 428,433,268, thus rendering the guaranteed debt fully defeased. The adequacy of defeasance assets is certified by the auditing firm of Deloitte & Touche.
209 Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Rockingham Terminal Incorporated Business Plan 2004–2005
commenced by Maersk Inc. and Planning Sea-Land Services Inc. In May Context 1998, Maersk and Sea-Land issued a request for proposals to seven Rockingham Terminal Inc. (RTI) ports located on the northeastern was created as a special-purpose seaboard. The request for proposals Crown corporation in December was to provide the companies with 1998 by an order in council. RTI a facility capable of handling their was created to advance the post-Panamax ships. In December development of a new container 1998, Halifax was shortlisted along terminal in Halifax to with Baltimore and New York, New accommodate post-Panamax-size Jersey. ships. In order to facilitate the RTI was established to promote, development of a proposal, the manage, and protect the interests Province of Nova Scotia, the of the Province of Nova Scotia Halifax Port Corporation (now the within the context of the Halifax Port Authority), and the competitive bidding process Halifax Regional Municipality Rockingham Terminal Incorporated
joined forces as the Halifax Port Group. Following the shortlisting of the bid, the Province of Nova Scotia created RTI to act on its behalf during the bidding process. The province, through RTI, was the lead partner in all matters associated with the bidding process, facility development, and financing.
In May 1999, Maersk/Sea-Land announced that they would pursue development of a facility elsewhere. RTI wound up operations and has been dormant since the end of the 1999–2000 fiscal year. It is presently unfunded and inactive. However, RTI remains incorporated in the event that future port development opportunities arise.
212 Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Sydney Environmental Resources Ltd. Sydney Steel Corporation Consolidated Business Plan 2004–2005
Table of Contents Mission ...... 215 Planning Context ...... 215 Performance in 2003–2004 ...... 216 Strategic Goals ...... 221 Core Business Areas ...... 221 Budget Context ...... 223 Crown Corporation Sydney Environmental Resources Ltd. / Sydney Steel Corporation Business Plans
The security and maintenance of the co- Mission generation facility, commonly referred to as the incinerator, was a large part of SERL’s To safely clean up and redevelop operation. Toward the end of the 2003-2004 the former Sysco site to a productive, fiscal year, the corporation completed an self-sufficient business property, internal assessment of the overall physical providing opportunities for future condition of the incinerator. The review economic development. concluded that the facility had depreciated to the point that it was no longer economically viable. Planning Context On March 4, 2004, the Province of Nova Scotia announced its intention to decommission and liquidate the incinerator. Sydney Environmental Resources As well, the government stated its intention Limited (SERL) to combine the operations of SERL and Sysco Sydney Environmental Resources Limited to better coordinate the remaining (SERL) was incorporated under the Nova decommissioning work at the Sysco site. Scotia Companies Act on July 10, 1990. It replaced the former Sydney Tar Ponds Clean- Sydney Steel Corporation (Sysco) up Inc. SERL’s mandate was to decommission Steelmaking started in Sydney under the the physical assets of the former Sydney Tar ownership of the Dominion Iron and Steel Ponds Clean-up Inc; secure Nova Scotia’s Company Limited in 1901. Over the next land holdings within the Muggah Creek several decades, various private-sector Watershed and Sydney Steel Plant (Sysco) companies operated the plant. In 1967, site; assist in decommissioning Sysco and Hawker Sydley, the last private operator of industrial structures on adjacent lands; and the steel plant, announced it was leaving. provide labour-related services to the The Government of Nova Scotia stepped in management of Sysco and the Sydney Tar and took over the ownership and operations Ponds Agency (NS). to avert the looming closure and serious Consistent with its mandate, SERL has economic consequences that would have provided substantial labour-related services resulted for Industrial Cape Breton. to Sysco since the decision to liquidate the As a result, the Sydney Steel Corporation remaining Sysco assets and remediate the (Sysco) was officially established by an act site. Approximately 400,000 hours of of the Nova Scotia Legislature and led to employment for former steelworkers have more than 30 years of government been coordinated through SERL. 215 Sydney Environmental Resources Ltd. / Sydney Steel Corporation
participation in the operation of Sydney Demolition Steel. During that time, the plant Demolition of the former Sysco site experienced many ups and downs. continues on time and on budget. The Ultimately, several factors, such as changing major steelmaking equipment has been technology and the condition of the world sold to Maxsteel Limited of the United steel market, forced the end of Sydney’s steel Kingdom. Demolition is more than 60 per industry. Through the 1990s, government cent complete. made several attempts to sell the plant to To date, in excess of 30 buildings and private owners. Despite these efforts, the last structures have been removed. These attempt concluded unsuccessfully in January include the machine shop, boiler shop, 2001. Government’s attention then turned to electrical repair shop, calcite plant, old roll securing pensions and severance packages shop, #2 open hearth and stacks, blooming for workers. It commenced demolition and a mill pit building and stacks, #3 blast site cleanup process, the selling of Sysco furnace and stoves, tieplate building, and assets, and development of a plan for the rail-finishing mill. future of the property. The electric arc furnace (EAF) and universal Today, Sysco’s key activities include mill buildings will be dismantled and demolition, site cleanup, the sale of scrap moved off site, and several other buildings steel and slag and the redevelopment of the will be maintained for use in the planned site as an industrial park. industrial park. Beginning with the 2004–2005 fiscal year, Sysco has put in place a detailed the operations of SERL and Sysco have been decommissioning process to be followed combined. Accordingly, the planning for before a building can be demolished. This future activity of the two organizations has includes a careful inspection to ensure that been integrated. all environmental and safety matters are dealt with prior to the commencement of Performance in any demolition activity. 2003–2004 Occupational Health and Safety
In the 2003–2004 fiscal year, there have Safety for workers and for the community is been a number of changes to the SERL/Sysco the first priority for both companies. They operations aimed at building a new future are committed to meeting or exceeding all and new opportunities for the site, the local requirements of Nova Scotia’s Occupational economy and the Province of Nova Scotia. 216 Health and Safety Act and Regulations. Crown Corporation Sydney Environmental Resources Ltd. / Sydney Steel Corporation Business Plans
The job of demolition and site cleanup at steel, doing general site cleanup, and Sysco has a high degree of complexity. The conducting environmental remediation work management team takes safety very and equipment and building demolition seriously. The end goal is to keep workers work. All of the labour coordination has been safe and healthy so they can continue to contracted through SERL’s effective make an important contribution to their manpower management services. workplace, their communities, and their As demonstrated by past performance, families. Sysco’s preferred route is to use the former Sysco has a detailed site safety plan in place. steelworker labour pool for all labour needs. It places a premium on continuously However, there may be circumstances where improving safety policies and practices. outside contractors are required for Contractors and sub-contractors must abide specialized services. In those circumstances, by this master plan. In addition, both it will not always be possible to use only companies have full-time safety officers who labour pool employment due to technical, serve as watchdogs for the entire project. contractual, training, or safety requirements for specialized contracts. Overall, Sysco places emphasis on proactive approaches to prevent accidents, Recently, Sysco has clarified its injury, and illness through an internal commitment to local labour in tenders for responsibility system. This is based on the the sale of Sysco-owned scrap steel. Sysco co-operation and involvement of all has put its long-standing commitment in workplace parties in occupational health writing. This includes the requirement for and safety matters. In the course of more any scrap purchaser to negotiate with than 170,000 hours of work, we were Provincial Energy Ventures Limited (PEV), fortunate enough to have had only three the operator of the Sysco pier, to secure a lost-time accidents during 2003–2004. safe berth and any other dock services that they may require. It also recognizes that Local Labour any labour used in the loading of the scrap steel must be Cape Breton–based labour, Since the work on demolition and cleanup wherever possible. was initiated three years ago, it has been Sysco’s practice to use local people wherever Remediation and whenever possible. During that time, hundreds of workers have been employed on Sysco is committed to cleaning up the various aspects of the site cleanup. To date, former steel plant property so the site can steelworkers have worked approximately be put to good use in the future. Funding for 400,000 hours burning and cutting scrap remediation was budgeted in 2001, and 217 Sydney Environmental Resources Ltd. / Sydney Steel Corporation
since that time, steady progress has been • the area adjacent to Victoria Road made. Overall, Sysco is taking a phased overpass, extending into the former approach to remediation. maintenance shops area and south to the Coke Ovens Brook Sysco completed its Phase I Environmental Site Assessment, which outlined potential • the area of the administration building environmental issues. The final report and north to beyond the former mobile noted that the issues identified are typical shops of those associated with industrial As well, in 2003–2004, fieldwork for Phase demolition and redevelopment projects, III studies have been completed for the high and that they can be addressed using dump area, blast furnace stockyard, and conventional site assessment, remediation, tracts of land north of the yard to the site management, waste management and shoreline. demolition methods. A project plan was developed to address the recommendations Essentially, all peripheral areas of the site contained in the Phase I report. have been examined. Further testing in the central portion of the site hinges on For the purposes of the environmental equipment removal and demolition assessment, the Phase I report recommended schedules. subdividing the property into 36 Site Classification Units (SCUs). These have been In addition to the phased decommissioning grouped into larger tracts of land with that Sysco is conducting, in compliance common characteristics in order to facilitate with the Canadian Council of Ministers of the discussion of environmental issues and the Environment (CCME) guidelines, other to assist with future land use planning. remediation work that has been completed in 2003–2004 includes the following: During 2003–2004 work was completed on Phase II Environmental Site Assessments • cleaning and demolition of two 2.5- for several portions of the site. Specifically, million–gallon bunker fuel oil tanks these include the following: • excavation/cleaning of approximately 3
• the “high dump” area, which has also km of underground fuel and coke oven undergone a resource identification/ tar lines stratification study • removal/disposal of 50 000 kg of PCB
• the blast furnace stockyard and tracts waste of land north of this area to the • removal/disposal of 600 000 kg of shoreline. asbestos debris 218 Crown Corporation Sydney Environmental Resources Ltd. / Sydney Steel Corporation Business Plans
• removal/disposal of 7 000 tons creosote Services Inc., Provincial Energy Ventures timber Limited (PEV), Elk's Fabricators Limited, John Ross and Sons Limited, Atship Services • removal/disposal of 600 000 kg Limited (office space), Sydney Environmental industrial chemicals Resources Limited (office space), and the • recycling and sale of approximately Sydney Tar Ponds Agency (office space). 800 000 litres of waste oils In the last year, initiatives have been • environmental baseline study (EBS) of undertaken to contribute to site the area where Millcreek Environmental redevelopment and improve the Services Inc. is located marketability of the site. These include the following: Site Redevelopment • Sysco has partnered with Enterprise Sysco continues to implement the Final Cape Breton Corporation (ECBC) and Land Use Plan and Re-development Strategy retained Deloitte & Touche Fantus, a for the Former Sysco Property completed by site locator for Fortune 500 companies, Environmental Design and Management to help market the site and the region Ltd (EDM) in 2002. to potential tenants.
The plan recommended that the 180-ha • A property management plan is under (445-acre) site be redeveloped as a premier development looking at tenant mix, industrial park. It states that there is a real long-term management, and master potential for the site to attract new and plans for sewer, power, and water. different businesses to the area that might • A phased approach to business not otherwise choose to locate in Sydney. planning and establishment is being Sysco has land and buildings available that pursued. This will allow Sysco to would be suitable for a wide range of capitalize on business opportunities as businesses and projects from environmental they arise for the benefit of all remediation to port-related businesses to concerned. modern manufacturing and light industrial • Short-term investments have been uses. made to “shore up” certain site Although the Sysco property is not yet being infrastructure. In 2003–2004, the marketed in any formal way, a number of following improvements were made: companies have located here, and others – rail track upgrade on the main line have expressed interest in the site. Tenants from the entrance of Sysco to the currently include MillCreek Environmental docks. 219 Sydney Environmental Resources Ltd. / Sydney Steel Corporation
– completion of a preliminary power taxpayers. The road is expected to be fully supply plan for the site. opened to regular traffic in the summer of 2004. – rerouting of power for the Sydney River Pumping Station to provide “interruption” protection. Sale of Scrap Steel
– creation of a water supply for PEV and Sysco has also had success with the sale of Logistec Stevedoring (Atlantic) Inc. scrap steel. To date more than 115 000 tonnes have been sold for total revenue of – signing of a power infrastructure $17 million. In 2003–2004, a total of 41 000 agreement with PEV and Nova tonnes of steel were sold. Scotia Power Inc.
• Street infrastructure improvements Slag Operations have been made. In 2003–2004, Sysco processed and sold • Demolition is moving forward on approximately 100 000 tons of blast budget. furnace slag as aggregate. This material was used in projects including the Sydney • The environmental site assessments Port Access Road, CBRM Regional Landfill, and remediation are progressing at a Logistec Coal Handling Facility, PEV Coal steady pace to allow for appropriate Handling Facility, on-site redevelopment, development. and other uses throughout CBRM. • Contact with local stakeholders will In addition, research has been initiated in continue to be fostered through Sysco’s conjunction with Dalhousie University to community relations manager. determine higher, value-added applications for slag. Potential uses include septic bed Sydney Ports Access Road sand/gravel, cement, and concrete. Construction is nearing completion on the A large stockpile of slag on site will ensure Sydney Ports Access Road, connecting continued operations, employment, and Highway 125 to the Sysco and Nova Scotia revenue into the foreseeable future. Power piers. The road opened to truck traffic in late 2002 and has been well utilized. Sysco continues to work with partners like the Cape Breton Regional Municipality to build the road quickly, safely, and efficiently—in a way that works 220 for local businesses, residents and Crown Corporation Sydney Environmental Resources Ltd. / Sydney Steel Corporation Business Plans
Strategic Goals Core Business The overall goal of SERL/Sysco is to create a Areas vibrant industrial site where new industries SERL/Sysco will focus on the following six and businesses will locate. The site will be a core business areas in 2004–2005. Together, good place in which to work or establish a they form an ambitious agenda to further business. SERL/Sysco’s specific goals for the Province of Nova Scotia’s commitment 2004–2005 are: to remediate and redevelop the Sysco site • To promote sound occupational health for the benefit of Cape Bretoners and Nova and safety policies and practices. Scotians.
• To continue to fulfil all commitments Demolition for the wind-up of Sysco—provide employment opportunities for By the end of 2005, the demolition of the steelworkers, seek the best return on Sysco is expected to be between 80 and 90 assets, pursue a site cleanup, and chart per cent complete. The largest demolition a new plan for the future of the site. projects to be completed this year will be the EAF and universal mill buildings following • To remediate the site for future uses in the removal of their equipment. The an environmentally sound manner. remaining structures will be assessed for • To redevelop the Sysco site into a their ultimate removal or re-use in the new premier industrial park, providing site development plan. business and other opportunities to the communities of the Cape Breton Local Labour and Supplies Regional Municipality. Overall, the commitment to using local • To work with the community as labour for Sysco projects throughout the site partners on future directions and will continue for the duration of Sysco's opportunities for the Sysco site. mandate. SERL/Sysco is also committed to • To maximize financial returns to the continuing its practice of purchasing local shareholder from the sale of scrap supplies and services whenever possible steel, the sale of slag, and the leasing of and feasible. property through sound financial management.
221 Sydney Environmental Resources Ltd. / Sydney Steel Corporation
Liquidation and Sale of Major Environmental Remediation Equipment, Scrap, and Slag Major initiatives that will be undertaken All of Sysco’s major equipment has been regarding environmental remediation in sold. The last items, the electric arc furnace 2004–2005 include the following: and associated steelmaking equipment, • The “hig- dump” area. The next step is have been sold and will be removed in the development of an environmental 2004. Following the removal of the management plan (EMP) that will remaining equipment, the remaining scrap outline a strategy for the future of this steel will be harvested for future sale. As area. This EMP will detail where well, anticipated slag sales for 2004–2005 remediation is necessary, where slag are projected at more than 100 000 tons. mining is practical, and what other activities are reasonable. Site Redevelopment • The blast furnace stockyard and tracts of The following initiatives are planned for land north of this area to the shoreline. the upcoming fiscal year: An EMP will also be developed for these • Re-open the west bridge to provide areas, outlining the longer-term plan for public access to the main entrance of the site and any remediation that must the administration building. occur.
• Complete the water supply study and • The area adjacent to Victoria Road make a decision regarding the future overpass, extending into the former water supply source for the site. maintenance shops area and south to the Coke Ovens brook. From the Phase • Complete engineering survey, II some additional testing (Phase III) preliminary detailed infrastructure will be conducted to delineate all plans, and related costing analysis on environmental issues and remediation the front (or south) end of the site. approaches. • Create a long-term global information • The area of the administration systems database for property building and north to beyond the management. former mobile shops. A Phase III of this • Complete engineering, survey, and area will be completed this year. detailed plans for the greening project for the Whitney Pier area adjacent to Sysco and the Sydney Ports Access Road.
222 Crown Corporation Sydney Environmental Resources Ltd. / Sydney Steel Corporation Business Plans
Additional plans for 2004–2005 include:
• cleaning and demolition of the two remaining 2.5 million–gallon oil tanks
• removal/disposal of remaining PCBs (estimated at 50 000 kg)
• removal/cleaning oil/tar lines (approximately 2 km)
• removal/disposal of remaining industrial chemicals
• removal/disposal of remaining asbestos
• environmental baseline study (ESB) of the area where Elk’s Fabricators Ltd. and John Ross and Sons Ltd are located
Moving expeditiously towards a better understanding and characterization of these areas will help identify any additional issues with respect to the redevelopment of these properties.
Budget Context The Province of Nova Scotia has accounted for the anticipated costs of decommissioning the site and addressing the environmental remediation issues. Beginning in 2004–2005, Sysco and SERL will be combined and reported as one operating entity. The data below includes a forecast of the separate operating results of SERL and Sysco for the current fiscal year and the combined budget for 2004–2005.
223 Sydney Environmental Resources Ltd. / Sydney Steel Corporation
Budget Context
Forecast Forecast Forecast Budget 2003–2004 2003–2004 2003–2004 2004–2005 ($) ($) Total ($) ($)
Sysco SERL Total Revenue: Contribution from Province 11,620,000 1,609,000 13,229,000 22,280,000 Other 7,850,000 17,000 7,867,000 850,000 Total Revenue 19,470,000 1,626,000 21,096,000 23,130,000 Expenses: Payroll 1,060,000 407,000 1,467,000 1,490,000 Consulting 1,350,000 27,000 1,377,000 1,340,000 Scrap Processing 1,670,000 1,670,000 General and Administration 3,150,000 321,000 3,471,000 2,520,000 Security 730,000 730,000 710,000 Demolition and Environmental 6,930,000 6,930,000 16,290,000 Remediation Coke Ovens 283,000 283,000 300,000 TPW (Dept. of Transportation and Public Works) 169,000 169,000 200,000 Incinerator/Water Treatment 419,000 419,000 280,000
Total Expenses 14,890,000 1,626,000 16,516,000 23,130,000 Surplus 4,580,000 NIL 4,580,000 NIL
224
Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Trade Centre Limited Business Plan 2004–2005
Table of Contents Mission ...... 227 Introduction ...... 227 Planning Context ...... 228 Strategic Goals ...... 229 Core Business Areas ...... 230 Priorities for 2004–2005 ...... 231 Performance in 2003–2004 ...... 231 Budget Context ...... 235 Outcomes and Performance Measures ...... 236
Crown Corporation Trade Centre Limited Business Plans
The original business units managed by Mission TCL included the World Trade and Convention Centre, the World Trade Centre Trade Centre Limited creates economic Tower (which was constructed in benefits by bringing people together in conjunction with the Convention Centre in Halifax and Nova Scotia. order to offset annual operating costs for the convention facility), the Atlantic Canada World Trade Centre, and Halifax Metro Centre. In 1999, TCL created Events Introduction Halifax, whose mandate is to actively seek Trade Centre Limited (TCL) was created in large cultural and sporting events for HRM. November of 1981 by Order in Council as a Also, in 1999, TCL, at the request of the Crown corporation and was also Government of Nova Scotia, took over incorporated under the Nova Scotia management of the facilities at Exhibition Companies Act. The Province of Nova Park. This transfer of management was Scotia is the beneficial owner of all shares of designed to capitalize on TCL’s expertise in the company. The company reports to sales and events management in both the government through the Minister of the meetings and conventions industry and in Office of Economic Development. The the entertainment industry. As part of the original mandate defined the primary Exhibition Park acquisition, TCL was also purpose of the company, i.e., to oversee and asked to support the formation of a new fall administer the activities related to the fair and assist in making it the pre-eminent Trade Centre complex. A secondary fall fair in the Maritimes. The Maritime Fall purpose was to actively promote the facility, Fair Association (MFFA) was created as a Halifax, and Nova Scotia. In 1982, an not-for-profit society in December 1999, agreement was signed between the City of and TCL assumed responsibility for the Halifax and the Province of Nova Scotia MFFA in April 2001. that gave management of the Halifax Trade Centre Limited, in the fall of 2003, Metro Centre to TCL, although the city was underwent a strategic planning process to continue to accept financial that resulted in a renewed strategic vision responsibility for any and all costs of and supporting plan for TCL, which was operation in excess of revenues. The two approved by the Board of Directors in facilities/properties are linked in all aspects December 2003. The plan is intended to of physical plant and interdependent in all position the organization for future growth operations, which is necessary to achieve by capitalizing on its cumulative maximum efficiencies. experience and event successes in the 227 Trade Centre Limited
business hospitality and entertainment Canada for the first time), and a host of industry. Under the previous strategic plan, important national and international TCL was not due to have reassessed its conventions, including the International strategic direction until 2005, but it was felt Lions Convention, Rendezvous Canada, and that significant changes in TCL’s business the G8 Finance Ministers Summit. As well, environment necessitated an earlier review. Exhibition Park has become a major trade Specifically, both on the meetings and and public show venue with such annual conventions side of the business, and on the shows as the Ideal Home Show, the Maritime entertainment side, customers’ needs are Fall Fair, the International Boat Show, and changing and evolving rapidly, and others. infrastructure weaknesses are preventing As TCL’s business has grown, so has the TCL from being able to fully maximize need for expanded facilities. With current existing and emerging opportunities, even infrastructure, Halifax is optimal for as competitors from across Canada and the meetings with attendance up to 1,000; United States are growing their facilities. events above this number are challenged by the convention space available. Even though Halifax outperforms its competitors Planning Context in the Canadian associations market, the TCL business units are all engaged in destination is in danger of losing business in “bringing people together,” and through this size range due to the increasingly this, TCL is a major contributor to the inadequate size of facilities. In addition, TCL Halifax and Nova Scotia economies. In attracts between 1 and 4 per cent of 2002–2003, TCL welcomed a record number US/international meetings and conventions of 1.2 million visitors to the Convention business, while competitors’ event mix Centre, the Metro Centre, and Exhibition comprises 16 per cent of international Park. The economic impact of spending by events. We are losing competitive ground on those visitors, planners, promoters, two fronts: (1) we are unable to service more delegates, and exhibitors amounted to $99.6 Canadian business due to the increasingly million in direct expenditures and $60.2 inadequate size of our facilities, and we are million in spin-off expenditures. High-profile missing opportunities in the larger US and events included the 2003 World Junior international markets (1,000+ attendees); Hockey Championship, which broke all (2) the wear and tear placed on our facilities previous attendance records, the Nokia Brier, over the past 20 years is negatively affecting the East Coast Music Awards, the World our reputation as a premier destination. Key Theatre Congress and Festival, the World competitors include Ottawa, Toronto, 228 Trade Centres General Assembly (held in Quebec, Montreal, Winnipeg, Edmonton,
Crown Corporation Trade Centre Limited Business Plans
Calgary, Vancouver, and Hamilton. TCL’s recent strategic review was driven by Moncton is very competitive with the realities of its competitive environment Exhibition Park for regional trade shows. All and by the opportunities that present of those cities, except Hamilton and themselves as a result of a growing Moncton, offer more convention and reputation for successful event delivery. If exposition facilities than Halifax, although TCL is to remain competitive in the events few have the destination appeal. industry, in the next five years it must have in place plans for major capital investment A new and expanded convention centre to expand existing meeting and would continue to serve the existing base of convention space and build a new and meeting and convention business, more modern sport and entertainment retaining current associations that require complex. more space, while opening new business opportunities for Halifax in the areas of large (1000+ participants) national and international events. The needs of the Strategic Goals expanding meetings and convention Based on TCL’s mission of creating market could be most cost-effectively served economic impacts by bringing people through redevelopment of the Metro Centre together in Halifax and Nova Scotia, TCL arena to provide added meeting facilities. has developed the strategic intent of In combination with the WTCC, the size is becoming the best events destination in appropriate, and the downtown location North America within 15 years. To within the central business and tourist support the mission and the intent, district would protect one of Halifax’s strategic goals have been set as follows: natural competitive advantages. The • To ensure that we have sufficient capital redevelopment of Metro Centre to provide and operating revenue to sustain needed meeting facilities would therefore existing infrastructure and operations reinforce Halifax’s strengths and would and to take full advantage of growth encourage a major hotel development of opportunities available to TCL. 500 rooms or more. As well, a new Metro Centre would enhance overall growth • To achieve confirmation of the opportunities, increase attendance in both stakeholder commitment that is facilities, and provide growth in the tourism necessary to firmly establish Halifax as market. Significant revenue opportunities the best events destination in North all lead to net economic growth for the America. province. 229 Trade Centre Limited
• To achieve the infrastructure necessary to 1. Atlantic Canada World Trade Centre— host major national and international a membership-based organization that events. Necessary infrastructure includes, belongs to a global network of 300 world but is not limited to, convention centre trade centres in 90 countries engaged in expansion, a new entertainment creating trade opportunities for small complex, and a sports stadium. and medium-sized businesses by providing trade research services, trade Key strategies to achieve the above goals education, and trade consulting. are as follows: 2. World Trade and Convention Centre— – Complete a feasibility study that the premium meeting and convention identifies infrastructure needs along with facility in Atlantic Canada with 100,000 capital and operating funding needs. sq. ft. of contiguous meeting and exhibit – Identify current facility utilization and space. service offerings and identify the 3. Halifax Metro Centre—a 10,000-seat capital funds necessary to keep sports and entertainment centre in facilities at maximum utilization. Atlantic Canada whose primary activity – Launch a stakeholder communications is delivery of live entertainment program that supports the process of experiences and events, managed by stakeholder alignment that is necessary TCL on behalf of HRM. to support TCL major initiatives. 4. Exhibition Park—the largest exhibition – Develop a market research–based space in Atlantic Canada with 200,000 approach that is based on an ongoing sq. ft.; primary activity is presentation collection of best practices to measure of trade and public shows. Exhibition results against and establishes the basis Park houses the annual Maritime Fall for ongoing performance measurement. Fair, an annual anchor event, which is treated as a separate TCL business unit and which is designed to highlight the Core Business importance of the agricultural sector in Areas Nova Scotia Trade Centre Limited’s core business is 5. Events Halifax—a research-based bringing people together through events organization that identifies large and trade activities for economic benefit. national and international sporting That happens through the work of the and cultural events for Halifax and following business units: Nova Scotia 230 Crown Corporation Trade Centre Limited Business Plans
activities, particularly in the area of new Priorities for trade shows.
2004–2005 • Events Halifax’s priority is to use its Business priorities for 2004–2005 will include expertise and leadership position to a number of functional strategies from each build partnerships with sports business unit, which have been developed to organizations and all levels of support the corporate strategies listed above. government to bring even more major sporting and cultural events to Halifax • Atlantic Canada World Trade Centre and Nova Scotia. will focus on establishing relationships with a wider audience of Nova Scotian exporters and importers and expanding consulting and trade servicing capability. Performance in
• The World Trade and Convention 2003–2004 Centre will focus on managing and maximizing existing business ACWTC opportunities while preparing to plan for The Atlantic Canada World Trade Centre the business anticipated for new facilities, (ACWTC) had a successful year, exceeding in in recognition of the long planning spans the goals of making trade happen for Nova necessary for this business sector (i.e., Scotian companies and fiscal responsibility. national and international conventions). A key area of new business effort for ACWTC • Halifax Metro Centre’s strategic focus is administering federal government trade will be to strengthen relationships with services. Currently, the ACWTC is the project key clients by delivering events with manager for ACOA’s Trade Mentoring and optimal efficiency. The goal is to create Intern Mentoring Programs and Team additional event days by working with Canada Atlantic’s trade missions to promoters to increase the success of Washington and Chicago. Through these existing events and build additional programs the ACWTC has helped over 150 event days through new activities and mainland Nova Scotian companies with growth in new facilities their export efforts.
• At Exhibition Park the priorities are to Another key area of business delivery is achieve an operating profit while membership services. Over the past year, continuing to bring operational ACWTC provided many trade services, components into line with TCL customer including an internship program, trade service standards and to expand research, and trade training—helping our 231
Trade Centre Limited
members become more successful with Exhibition Park their business. In 2003, 2004, Exhibition Park continued With regard to fiscal achievement, ACWTC is its growth as a premier trade and consumer forecast to make a positive bottom-line show facility, with the Maritime Fall Fair as contribution to Trade Centre Limited an anchor event designed to highlight the revenues. Key areas of continuing effort will achievements of the agricultural sector in be to deliver new trade services for Nova Nova Scotia. Scotian companies and continue to Major consumer shows dominated the contribute positively to TCL’s revenue growth. roster of events. Shows such as the Halifax RV Show, Atlantic Woodworking Show, WTCC Halifax Antique Car Show, Spring and Fall The World Trade and Convention Centre Ideal Home Shows, 50+ Expo, as well as the experienced a successful year in terms of Outdoor Sports and RV Show proved that the number of national and international “’Ex’ marked the spot” in 2003 and 2004. events. However, in keeping with industry Sporting events are becoming a growing trends, actual delegate counts, along with part of the business mix, with the Black Belt food and beverage functions, were down for Canada 2003, Golf Show 2003, and a number of the national conventions. Atlantic Canada Gymnastics Competition There were a record number of international bringing increasing numbers of spectators social groups, including International Order and consumers to Exhibition Park. of Oddfellows (Aug 2003, 1000 persons), Banquets are also a growing market at Harmony Inc. (Nov 2003, 1000 persons), and Exhibition Park. Christmas parties alone Telecom Pioneers (Aug 2003, 950 persons). produced valuable revenue for non-peak Canadian corporate bookings were strong rental days. Ongoing weekly activities such with a number of annual general meetings as the Sunday flea markets and indoor and conferences. A sample of these groups soccer leagues also contribute valuable included CN, Grant Thornton LLP, Shoppers income in non-peak periods. Drug Mart, and Re/Max Corporation.
Canadian association meetings continued to Events Halifax contribute largely to revenue. Examples of Events Halifax (Eh!) was involved in groups booked were National Managers helping to win the bid, create a sponsorship Secretariat Conference (May 2003, 900 program, and advise the organizing persons) and Canadian Association for committee of the 2003 Eastern Canadian AIDS/HIV Research (April 2003, 350 persons). 232 Gymnastics Championships held at Crown Corporation Trade Centre Limited Business Plans
Exhibition Park May 9–10, 2003. The 2003 long-term lease renewals. Block plans for World Theatre Congress and Festival was proposed new consolidated offices for the held in HRM July 13–19, 2003. Eh! had Office of Economic Development; the helped to win this event and during 2003 Department of Tourism, Culture and advised the executive committee. Eh! Heritage; Nova Scotia Business Inc; helped to set up the steering committee for Industry Canada, and Agriculture; and the 2003 Canadian Under-14 Boys and Agri-foods Canada were developed. Girls Soccer championships held in October In particular, floor layouts were reviewed, 2003. Eh! is involved in the ticket campaign common areas were identified, and methods and bookkeeping for the 2004 World were established to maximize the rentable Women’s Hockey Championship held area of each floor. Such changes will March 28–April 04, 2004. improve the ratio between tenant useable In the summer of 2003, Eh! won the right to space and common area assessment. host the 2004 FIBA Americas World Additionally, TCL addressed issues related to Qualification Tournament in Halifax July modernizing building infrastructure. 28–August 1, 2004 as well the 2004 Master Various projects include upgrades to Card Skate Canada Championship in heating, ventilation, air conditioning, October. Eh! also been instrumental in elevators, lighting, electrical, lighting, helping to win the right to host the 2009 communications, electronic surveillance, World Senior Canoe Championship and washrooms, plumbing, equipment controls, are helping to set up the event steering walls, ceilings, and flooring. Preliminary committee. budgets have been developed for various office space layouts (leasehold Office Tower improvements) and building infrastructure projects. Work began with provincial The office tower continued to be fully representatives to forge a document occupied over the last year. requesting provincial capital funding. The rent budgets are being met, with the Upon securing funding, much of the fourth, exception of the planned increase in federal fifth, sixth, and seventh floors will be rents upon lease renewal. The period began renovated to modernize the building with several tenant moves to create over infrastructure and reconfigure the tenant 4000 sq. ft. of office space on the eighth floor spaces and part of the eighth floor to for a new tenant—Destination Halifax. accommodate current needs. TCL Property Management worked with tenant representatives to establish current office space requirements as the first step of 233
Trade Centre Limited
HMC of the 2003 World Junior Hockey Championship—the hugely successful Halifax Metro Centre continued to attract Halifax tournament earned record profits, high-profile events in 2003–2004. Among divided among Hockey Canada, the them were the WWE Raw and SmackDown, Canadian Hockey League, and the 12 popular wrestling shows that were provincial branches of Hockey Canada. broadcast in 125 countries and 12 Hockey Nova Scotia’s share amounted to languages. Well-known groups such as $288,000, which will be used for sport Shaggy, Def Leppard, Matchbox Twenty, development throughout Nova Scotia. Sum 41, Snoop Dogg, and Nickelback all included Halifax in their touring circuits last year and drew large audiences. The International Tattoo once again attracted 60,000 attendees over eight shows. On the sports side, in addition to a full season of junior hockey by the Mooseheads, there was a Canada/Russia Challenge featuring the Quebec Major League All Stars game in November, and in September, an NHL pre- season game with the Boston Bruins vs. the Pittsburgh Penguins.
Key event announcements in the past year included the successful bid by Halifax to host the 2004 Under-21 Tournament of the Americas which is a qualifying event for the FIBA Under-22 World Championships— qualifying tournaments have been held in Canada on only three previous occasions. As well, a press conference was held to announce that Halifax once again broke a national ticket sales record—outselling all previous host cities for the 2004 World Women’s Hockey Championship, two months before the tournament was actually due to begin. Another significant event announcement was related to the legacies 234 Crown Corporation Trade Centre Limited Business Plans
Budget Context
For the year ended March 31 Estimate Forecast Estimate 2003–2004 2003–2004 2004–2005 ($) ($) ($)
Revenues $11,125,503 $10,453,561 $10,730,318
Expenses
Event Operations 4,448,061 4,211,190 4,132,446
Salaries and Benefits 2,569,585 2,432,266 2,713,446
General Operations 2,960,323 2,982,355 2,979,125
Taxes and Insurance 1,056,450 1,048,132 1,084,396
11,057,968 10,673,943 10,909,413
Income (Loss) before Other Items 67,535 (220,382) (179,095)
Other Income 60,000 20,500 30,000
Income (Loss) before Depreciation $ 127,535 $(199,882) $(149,095)
Depreciation 1,650,000 1,640,645 1,650,000
Income (Loss) for the Year $(1,522,465) $(1,840,527) $(1,799,095)
Note: Revenues and expenditures for the Halifax Metro Centre are not reflected in this budget. The Halifax Metro Centre is owned by the Halifax Regional Municipality and operated by Trade Centre Limited under a management agreement. All operating deficits or surpluses accrue to the municipality.
235 vice offerings arget arget Identify areas for efficiency improvements and expansion opportunities in current operations Assess current facility utilization and ser and assess level of capital funding sustain existing infrastructure Review and enhance current economic contribution to Nova Scotia by TCL support case for capital and operational support Conduct feasibility study Conduct economic impact study Develop partnership opportunities Present plans to appropriate government leaders • • • • • • • Strategies to Achieve T Strategies to Achieve T e and operations to take arget 2004–05 arget 2005–06 Executive council decision T T evenue to sustain existing infrastructur arget 2003–04 arget 2004–05 Operating revenue: $10.7 million Capital funding: $1.65 million Complete study for presentation to key stakeholders T T mance Measures y to host major national and international events. for Measure Measure Income before depreciation Increased level of bookings owth opportunities. e necessar ward plan Indicator Indicator Annual audited financial statements Approval for go- for e that TCL has sufficient capital funds and operating r o achieve the infrastructur Ensur T full advantage of available gr Goal 2 Goal 1 Outcome Outcomes and Per Outcome Level of profitability that can sustain operations and nominal capital expenditures 236 A convention facilities plan that can be validated Crown Corporation Business Plans arget Identify key stakeholders and appropriate messaging Design stakeholder relations program • • Strategies to Achieve T arget 2004–05 Begin facility expansion planning presentations to key stakeholders T y arget 2003–04 Secure necessar agreements T vey Measure Level of stakeholder support, as measured by a stakeholder sur Indicator Stakeholder satisfaction y Achieve confirmation of stakeholder commitment Goal 3 Outcome Confirmation of the necessar stakeholder commitment to firmly establish Halifax as the best events destination in North America 237 Nova Scotia Farm Loan Board Crown Corporation BUSINESS PLANS FOR THE FISCAL YEAR 2004–2005
Waterfront Development Corporation Limited Business Plan 2004–2005 Table of Contents Mission ...... 241 Planning Context ...... 241 Strategic Goals ...... 244 Core Business Areas ...... 245 Priorities for 2004–2005 ...... 245 Budget Context ...... 248 Outcomes and Performance Measures ...... 249 Crown Corporation Waterfront Development Corporation Limited Business Plans
issues around the entire harbour. This new Mission mandate will require changes in operational budget, and additional resources may be To serve as champion of a dynamic required as WDCL undertakes new activities. vision and to plan, coordinate, promote, and develop properties, events, and Organizational activities on designated waterfronts Structure and Financial within Halifax Harbour. The corporation has a staff of 15: 7 involved in planning, development, and administration, and 8 in maintenance and Planning Context parking operations. The corporation’s ordinary revenues Mandate ($3,000,000 in the year ended March 2003) are derived primarily from building and Waterfront Development Corporation ground leases ($1,100,000, or 37 per cent) Limited is a Crown corporation established and parking lot operations ($1,900,000, 62 in 1976 to revitalize the waterfronts of per cent). In the year past, ordinary expenses Bedford, Dartmouth, and Halifax. Its were approximately $1,800,000 and re made current mandate includes the following: up of property expenses (maintenance and • property acquisition, management, repair, taxes, depreciation, $973,000, 54 per and development within designated cent), corporate overhead, including areas in Bedford, Dartmouth, and planning, ($94,000, 5 per cent), interest Halifax expense ($280,000, 15 per cent), and • marketing and promotion designed to contribution to public facilities, both owned attract public use of the waterfronts and non-owned ($296,000, 16 per cent).
• coordination and planning of the The corporation’s loan balance at the end waterfronts of Bedford, Dartmouth, of the fiscal 2003–2004 will be $8,665,000. and Halifax, including championing Capital projects to fulfil the 2004–2005 assets owned by the province Business Plan in the coming and future throughout the entire harbour years will generate loan balances of:
As a result of the expanded mandate of 2003–04 = $ 8,665,000.00 WDCL in Dartmouth and Bedford, there has 2004–05 = $ 9,849,000.00 been an increase in staff complement. The 2005–06 = $10,766,000.00 mandate is also being expanded to have the 241 corporation become more active in waterfront 2006–07 = $14,906,000.00 Waterfront Development Corporation Limited
The financial health of the corporation is federal government on the basis that the largely dependent on revenue sources from public infrastructure that it builds and parking fees and tenant rents. For the past maintains is similar to that of a fiscal year budget targets for parking municipality. Not receiving disaster relief revenues were down, and this year’s will be a significant financial burden. forecast has been adjusted accordingly. The loan balance of the corporation is Rents from tenants are subject to economic anticipated to approach its current credit and market conditions. The provincial facility of $14.5 million through a loan government allows an interest rate 1 per guarantee from the province and $3.6 cent below prime guarantees loans of the million available with a negative pledge of corporation. Increased revenues have assets. It is important to note that property positively contributed to our financial assets of the corporation, which are health and the ability to carry out capital scheduled for development, have a projects and partner with others. A significantly higher value than that combination of these increased revenues allowed to be shown on our books. Not allows the corporation to pay down the including new land being created in principal on its loan, and decreased interest Bedford and land dedicated to public space, rates have benefited the overall financial real estate assets are valued between $40 status. Should there be a regional economic million and $45 million. downturn, revenue sources and the funds from private sector partnerships could be Also it should be noted that revenues in reduced. later years are temporarily reduced in the transition from parking lots to development This year the corporation will be strategically sites during the construction period. assessing its revenue generation capability, particularly on the Halifax waterfront where Finally, the development projects visitor attraction and special event anticipated in this plan will generate more opportunities are high. than $100 million in private investment. Hurricane Juan caused significant damage Halifax to WDCL’s properties and infrastructure in The lion’s share of the corporation’s Halifax Harbour. Total damage is estimated property assets is on the Halifax Waterfront. at $360,000. A minor portion will be The corporation has been working jointly covered by insurance. Federal disaster relief with Halifax Regional Municipality (HRM) guidelines exclude Crown corporations to achieve a financially viable plan. The from aid relief but include municipalities. Halifax Waterfront Openspace and The corporation is appealing this to the 242 Development Plan has yet to be approved Crown Corporation Waterfront Development Corporation Limited Business Plans due to continuing discussions with HRM on Dartmouth the eventual planning guidelines for the The Dartmouth Harbourwalk concept plan corporation’s development sites. Full developed in partnership with HRM is being implementation of the plan, with its completed in phases. Construction was significant open space and reduced completed on a 1-km portion on the Nova development intensity, is dependent on Scotia Hospital lands. Continuing the link to achieving a financial partnership the Woodside Ferry Terminal was delayed as agreement with Halifax Regional a result of concerns that the trail would Municipality. HRM believes that provincial conflict with future marine industrial financial contribution to the plan is potential on the hospital lands. It is necessary. anticipated that an alternative route will be A major project involving an expansion of selected, which will allow it to be completed the Maritime Museum of the Atlantic and a in 2004. Detailed design is being completed private associated development is under by HRM on another portion of the trail to analysis, with the results expected in 2004. Old Ferry Road. The achievement of the In addition to the private-sector Dartmouth Harbourwalk is dependent on investment. this development requires municipal contributions and private significant provincial and federal financial sponsorship, which will have to be support. negotiated. The corporation’s next priority is extending the trail through Dartmouth Tall Ships 2004, which is being managed by Cove. WDCL, is being strongly supported by provincial and municipal governments, A purchase and sale agreement for with federal support being applied to the corporation land in downtown Dartmouth After Port program. The event from a was not consummated as planned in 2003, budget perspective is targeted to have a and subsequently another RFP was issued for surplus of $280,000. The economic impact the site. Three proposals were submitted, but to the region and province should be none met the objectives of the corporation. comparable to Tall Ships 2000. The budget Also in Dartmouth, the corporation is in success of the event depends primarily on discussions and planning stages with the visitation, which is in turn dependent on Nova Scotia College of Art and Design for the weather. location of their second campus to the waterfront. In order for this initiative to be successful, it will require financial support from the province, possibly special incentives by the corporation, and partnership with the 243 Waterfront Development Corporation Limited
private sector. Discussions are under way for to fulfil needs of the community in terms of a public-private partnership in the joint public space and facilities, a public boat development of the corporation’s lands in launch, as well as new private development Dartmouth Cove and the Dartmouth Marine for residential, commercial, and marine use, Slips, which are to be purchased by the including a marina. The completion of the private sector. South Jetty, public boat launch, and extension of the Bedford Basin Harbourwalk Bedford will occur in 2004. The fill project and creation of additional land for public use and development continues. This fill site has also provided a Strategic Goals much-needed environmentally sound The corporation’s strategic goals are to ocean dumping area for pyritic slate. It is provide infrastructure, opportunity, and anticipated, subject to the availability of support for further public and private slate, that five to eight years will be investment that will enhance the capital required to complete the filling. For the long region as a place to live, do business, invest, term, development of the land in a and visit. By enhancing the quality of the partnership with the owner of a portion of waterfronts for residents and visitors, the the area is being considered. There also corporation creates the opportunity for continues to be an outstanding legal issue continuing economic growth by creating with this same private landowner left over increased leisure traffic and meeting and from Phase I development and inherited convention activity, as well as additional when the Bedford Waterfront Development residential, institutional, and commercial Corporation and WDCL were development. An emphasis is placed on amalgamated. As well, there will be quality development and programs that opportunities for other developers. The will make all Nova Scotians proud of their completion of Phase I has been delayed due capital region and province and encourage to negotiations between Provident people to visit Nova Scotia. Development Limited on a change in use of the last lands in Phase I from commercial to residential.
The corporation will be seeking a review of planning policy for Phase II from HRM, and a public consultation and planning process will be undertaken. There is an opportunity 244 Crown Corporation Waterfront Development Corporation Limited Business Plans
– Promote/advertise berthing for Core Business visiting vessels in Bedford, Areas Dartmouth, and Halifax. 1. Acquisition, management, and – Maintain properties and public development of waterfront property in spaces (including limited winter Bedford, Dartmouth, and Halifax maintenance) to a high standard and use best practices, in 2. Marketing and promotion (public coordination with other stakeholders relations) of the waterfronts as centres e.g., HRM. of year-round activity and interest for residents and visitors – Undertake repairs to existing deteriorating infrastructure along 3. Coordination and planning of the Halifax Harbourwalk. waterfront activities and development – Improve quality of seasonal vending establishments through design, Priorities for construction, and leasing structures 2004–2005 to tenants. • Development
1. Acquisition, management, – As a result of a call for proposals in and development of waterfront 2003, obtain planning and property in Bedford, Dartmouth, development approval of land at the and Halifax foot of and to the south of Salter • Acquisition Street in Halifax to achieve additional public space and private- – Acquire/dispose of assets essential sector development opportunities. for realization of waterfront plans. – Negotiate a partnership with the – Create new land for public space and Nova Scotia College of Art and development through infilling of Design for the location of a second waterlots. college campus on the Dartmouth • Management Waterfront to include the
– Manage property leasing and parking corporation’s land in Dartmouth operations to provide funds for and private land at the Dartmouth investment in further development. Marine Slips.
245 Waterfront Development Corporation Limited
– Negotiate a partnership with the 2. Marketing and promotion of private-sector land and water lot the waterfronts as centres of owner adjacent to Phase II in year-round activity and interest Bedford to achieve access and a joint for residents and visitors development opportunity. • Develop a communications plan to – Resolve legal actions related to Phase expand public relations coverage with I Bedford. media interviews, paid advertising,
– Resolve land-use change with direct mailings, and participation in developer of Site 3.2 in Phase I. business networking sessions and events. – Improve public facilities in all waterfront areas, in particular trails, • Install interpretation panels for the washrooms, and public spaces. Halifax Waterfront to improve overall visitor experience. – Complete Phase I of the Dartmouth Harbourwalk between Woodside and • Co-operate with Downtown Development Cusack Street; initiate Phase II in Commissions in promoting business Dartmouth Cove. development.
– Continue to evaluate timing of • Source and encourage new events and expansion of the NovaScotian festivals to use the waterfront(s) as Crystal Building. event sites.
– Completethe South Jetty in Bedford, • Provide leadership, in co-operation construct a public boat launch, and with the Maritime Museum of the extend the waterfront boardwalk to Atlantic, in advancing a Visiting Ships the South Jetty. program, to include periodic tall ships visits and a potential tall ships festival – Enter into a partnership with the every four to five years. local Rotary Club to build a commemorative kiosk at South • Work with community groups and Battery Park. private sector art program to the waterfront(s).
• Examine the need for additional staff resources to implement this program.
246 Crown Corporation Waterfront Development Corporation Limited Business Plans
3. Coordination and planning • Provide support to annual waterfront of waterfront activities and festivals and events, such as Canada development Day Celebrations, International Buskers Festival, Halifax-Dartmouth • Champion and coordinate with HRM, Natal Day Celebrations, Atlantic Film on waterfront park and trail Festival, and Bedford Days Festival. development along the Dartmouth waterfront, from the MacDonald Bridge • Provide a leadership role in to Woodside Ferry Terminal, and seek coordinating provincial interest in public- and private-sector funding lands on Halifax Harbour via the support. Deputy Minister’s Committee on Port Development and Land Use. • Continue to establish partnership/policy agreements with Halifax Regional • Assess alternatives and develop a plan Municipality in areas of planning and for Bedford Phase II, including meeting maintenance. a commitment for a public boat launch. • Coordinate with others in the planning and development of the Nova Scotia • Review policy and guidelines for Hospital lands in Dartmouth. signage on the Halifax waterfront.
• Resolve title issues associated with • Continue to explore the feasibility of a certain water lots claimed by the marina at Mill Cove in Bedford.
Halifax Port Authority. • Seek to have the development of • In co-operation with HRM and other George’s Island as a tourist attraction a provincial and federal agencies, higher priority of the federal develop a vision and plan for Halifax government. Harbour.
• Jointly with the private sector, determine the feasibility of a public/private partnership in expansion of the Maritime Museum of the Atlantic and development of adjacent Queen’s Landing.
247
Waterfront Development Corporation Limited
Budget Context
02/03 03/04 03/04 04/05 Actual Estimate Forecast Estimate REVENUE Rent 1,108,950 1,162,798 1,173,517 1,101,846 Parking 1,870,307 1,910,765 1,872,218 1,885,345 Recoveries 27,123 9,200 9,069 9,200 Interest Revenue 5,379 4,500 5,300 4,500 Other 20,721 2,000 1,700 2,000 3,032,480 3,089,263 3,061,804 3,002,891 PROPERTY EXPENSES Operating 652,296 600,000 559,317 600,000 Taxes 18,217 32,750 29,970 32,000 Amort. & Deprec. 385,329 371,000 371,424 371,000 Non-owned infrastructure 213,183 – 2,770 – 1,269,025 1,003,750 963,481 1,003,000 INCOME BEFORE OTHER ITEMS 1,763,455 2,085,513 2,098,323 1,999,891
CORPORATE EXPENSES Directors 36,768 32,000 49,475 50,000 Office Op. 62,872 65,000 64,236 67,000 Audit 13,000 14,000 14,500 14,500 Legal 33,221 20,000 183,617 80,000 Promotions & Public Rel. 41,688 6,000 43,317 6,000 Salaries & Ben. 439,918 426,500 465,423 566,912 Staff Expenses 31,052 34,000 32,000 34,000 Tall Ships Recoveries (sal. & exp.) – – – 78,347 Doubtful accounts 91,890 – – – 750,409 597,500 852,568 896,759 PROGRAM EXPENSES Consulting 63,642 375,000 130,000 390,000 Festivals & Promotions 30,107 60,000 40,665 75,000 93,749 435,000 170,665 465,000
Loan Interest 280,017 310,500 272,000 208,000
NET EARNINGS 639,280 742,513 803,090 430,132 plus: amort. & deprec. 385,329 371,000 371,424 371,000 less: infrastructure fund contrib. 400,000 400,000 400,000 400,000
Funds available for development 624,609 713,513 774,514 401,132
DEVELOPMENT PROJECT EXP. 765,137 1,169,500 800,000 1,580,500
Borrowing for Dev't. Projects – 455,987 25,486 1,179,368
Other funds Working capital 536,539 – (200,000) – Sale of Assets 52,500 1,350,000 (52,500) – Grants & Recoveries – 105,000 25,000 25,000 Recovery (Expense) - Juan – – (200,000) 200,000 Tall Ships Recovery (Expense) – – (110,000) 177,000 NS Gov’t Contribution 112,400 112,400 109,732 133,400 Bedford fill 2,455,163 613,350 500,000 – Total other funds 3,156,602 2,180,750 72,232 535,400 Ending cash (360,980) 46,198 (14,234) 41,797
Increase (decrease) in debt (3,500,000) (1,600,000) 300,000 700,000
Loan & Infra. Fund Balance, Y/E 7,899,325 8,795,365 8,665,083 9,849,472
Prime rate 5.5% 4.5% 5.0% 248 Crown Corporation Business Plans arget Lease agreement Selling of dumping space for slate Advertising, improvement to facilities Increase efficiency & control expenses, increase occupancy Capital investment in infrastructure Leasing of WDCL-owned kiosk Best practice and coordination with HRM Planning and development approval by HRM • • • • • • • • Strategies to Achieve T y parking lots, there will be fluctuations in revenue as sites are developed and arget 16 N/A 6% 6% 6% increase N/A 2005–06 T arget 100% 13.5 3% 0 3% 3% increase 100% 2004–05 T ear 3.3 acres $27,000 $1,480,000 11 3 1,011,000 (2001) 3.3 acres Measure Base Y mance Measures 1 for centage leased centage of % increase Per % increase 3 Change in maintenance cost Acres created Increase in visitation Per land leased Measure isitor satisfaction Lease of property Revenue Acres of land Number of kiosks Annual maintenance cost Gross revenue V Leasing of land Indicator 1 While revenue projections are proposed to increase because approximately 63 per cent of comes from temporar revenue is transformed from parking to more permanent uses. alue of assets maintained Outcomes and Per Outcome Lease of Salter Block New land for public use/development in Bedford Phase II Continued growth rates in revenue Increased usage of berthing facilities High-quality visitor experience New kiosk V Public/private development on Salter Street block 1 249 250
Outcome Indicator Measure Base Year Target Target Strategies to Achieve Target Measure 2004–05 2005–06
Development of land Agreement with Acres of land under Partnership 100% of N/A • Seek partnership with NSCAD and private sector including $$ in Dartmouth Cove NSCAD and private agreement Agreement agreement sector
Joint development Successful negotiation Legal agreement Agreement 100% of N/A • Seek partnership with private owner agreement of agreement to fill land of agreement private owner
Resolution of legal Effect on budget Cost of settlement N/A N/A N/A • Negotiation/arbitration actions in Phase I Bedford
Resolution of land use Agreement Legal agreement N/A N/A N/A • Negotiation change on Site 3.2
Improvement to Visitor satisfaction Increase in visitation 1,011,000 3% increase 6% increase • Invest in new public infrastructure public facilities (2001)
Public access to Visitor satisfaction Lineal kms of trail 1km 2 km 4 km • Completion of trail on NSHL and partnership with HRM waterfront in Dartmouth
Addition to Increase in leaseable Percentage increase 4500 sq. ft. 4500 sq. ft. 21,000 sq. ft. • Feasibility of expansion NovaScotian Crystal space/revenue in leaseable space
New facilities in Bedford Completion of South Completed facilities N/A Finished project N/A • Completion of construction Jetty and boat launch
Public Facility on Partnership with N/A N/A Construction N/A • Partnership with Rotary Halifax Waterfront Rotary Outcome Indicator Measure Base Year Target Target Strategies to Achieve Target Measure 2004–05 2005–06
Profile of corporation Public awareness Increase in awareness N/A N/A N/A • Communications plan and survey of corporation
Improved visitor experience Visitor satisfaction Increase in visitation 1,011,0003% increase 6% increase • Seek partners and sponsors for displays 2 (2001)
Business growth Tenant revenue Increase in revenue N/A N/A N/A • Partnering with business commissions
New events Visitor satisfaction Percentage increase 1,011,000 3% increase 6% increase • Sponsor and partner in events, Tall Ships 2004, new Maritime Festival in visitors (2001)
Visiting ships Number of ships Number of ships 5 ships 40 Ships for 10 ships • Partner and improve facilities Tall Ships
Use of Georges and Visitation Percentage increase 1,011,000 3% increase 6% increase • Partner in and support access to islands MacNab’s Islands (2001)
Improved visitor experience Visitor satisfaction Percentage increase 1,011,000 3% increase 6% increase • Visitor intercept survey (2001)
Public- and private-sector Sponsorship/ Contributions $75,000 $150,000 $200,000 • Partnering with HRM support for trail in partnership funds Dartmouth
Formal agreements Approved co-operative N/A N/A • Meetings at executive level agreements
Coordination of provincial Coordinated N/A N/A N/A • Deputy Ministers Committee and staff working group interest development
2 This number is derived from the median of two recent studies, WDCL Economic Impact Assessment by CanMac Economics, 2002 Limited and the Strategic Plan for the Canadian Naval Heritage Foundation by Economic Planning Group 2002. s Committee and arget A orking Group ork co-operatively with HRM and other governments W Negotiate with HP Develop consensus on concept and examine private-sector response Staff W Continued work of Deputy Minister’ Standardization of signage and vendor kiosk Determine feasibility Hire consultants and public consultation Co-operative partnerships and sponsorships of events Seek to have federal priority • • • • • • • • • Strategies to Achieve T arget N/A N/A N/A 6% increase N/A Final Plan 6% increase 2005–06 T arget N/A Adoption of vision/plan Public- and private-sector interest N/A N/A 3% increase N/A Draft Plan 3% increase 2004–05 T ear Agreement to develop vision/plan N/A Phase I analysis 8 ships N/A N/A 1,011,000 (2001) 1,011,000 (2001) 1990s plan Measure Base Y itle to water lots isitor increases Financial viability T Support from public and other governments V Economically viable Support for projects and programs Phased construction Increased visitation Adoption of plan Measure A isitor satisfaction Feasibility study Agreement with HP Adoption of vision/plan Feasibility assessment V Federal priority Successful events Provincial policy Public support Indicator front land ision/Plan s Island Clear title on certain water lots Outcome Harbour V Determination of feasibility to expand Museum of Atlantic Plan for Bedford Phase II High-quality signage and vendors Co-operative partnerships for events Coordinate approach to provincial water Marina in Bedford 252 George’ open to public