2006-2007 Annual Report: Program for Export Market Development (PEMD)

Year in Review

As reported in the Department's economic review, global economic growth was sustained in 2006 increasing at 3.9%, up from 3.4% in 2005, led by strong performances in Europe and Asia. Canadian growth performance was also sustained albeit at 2.7% in 2006, down from 2.9% in 2005, but with a record low unemployment rate of 6.3%. Despite a 6.8% appreciation of the Canadian dollar (against the US $), overall Canadian exports of goods and services increased 1.1% to $535.7 billion in 2006, especially in natural resources. At the same time however, Canadian imports of goods and services increased by 4.2% to $486.5 billion. Exports of goods to the US dropped by 1.9% while our imports from the US increased by the same percentage. This environment continues to require adjustments and increased marketing efforts from the Canadian industrial sector in order to maintain its competitive edge.

Given that the PEMD component devoted directly to industries closed down in 2004-2005, no new applications from individual enterprises have since been accepted. However, contracts signed prior to March 30, 2004 were honoured till expiry in March 2006. This program was a repayable one based on certain sales realized by the recipients over up to four years. Company repayments in 2006/07 from previous PEMD assistance amounted to $921,024.

As for PEMD-Associations, since the review of the program in 2002, the percentage of funds being approved has been consistently high. In 2006-2007, PEMD approved $4.69 million out of a requested $5.74 million or 81.7 % of requested funds. Furthermore, of the 67 applications PEMD received in this period, 64 were approved (in part or in full), or 96%.

The number of Associations participating in the program has kept steadily in the range of 55 to 60 since the 2002 program changes, up to 2005/06. However in 2006/07, there were 64 associations approved for PEMD funding, with 63 of them actually using approved funds (an 18.5% increase over the previous year). A total amount of $4,688,102 was approved for projects to be carried out in the year, and an actual $3,375,450 was spent in the execution of these projects.

When financially possible, PEMD Associations offers a supplemental round of funding that lasts from late summer to late fall. Supplemental funding allows well performing associations to easily apply for extra funding in order to undertake activities that have arisen on short notice and could thus not be part of the initial application. There was a supplemental round of funding in 2006/07 and $730,179 in new projects to be executed before March 31, 2007, was approved for 18 associations. These amounts are included in the totals reported in this report.