Economic development report sees room for improvement, slow growth ahead for Manitoba

From training and education to investment and tracking business successes, a new report from Deloitte on economic development in Manitoba sees plenty of room for improvement — and predicts slower economic growth for the province ahead.

Deloitte report calls for new economic agency to lead growth in Manitoba

Deloitte's report on economic development suggests the growth rate of Manitoba's gross domestic product could slow in 2018, citing slowdowns in mining, construction and agriculture. (CBC News )

From training and education to investment and tracking business successes, a new report from Deloitte on economic development in Manitoba sees plenty of room for improvement — and predicts slower economic growth for the province ahead.

The consultant has been working on the report for months, after being awarded the contract to review Manitoba's growth efforts in October.

On Friday, Deloitte delivered what it calls a "road map" for the government to follow for the near future.

Premier Brian Pallister accepted Deloitte's findings as a starting point for redeveloping how Manitoba will grow its economy.

"We need to be smarter and more focused about economic development," Pallister told reporters Friday.

Some of the more direct observations from Deloitte include a lack of an "overarching" economic development strategy and the need for a centralized, but arms-length, economic development agency.

The Progressive Conservative government has recruited former Winnipeg Chamber of Commerce president Dave Angus and Payworks owner Barb Gamey to stick-handle the recommendations in the Deloitte report into a strategy the government can use. 
Former Winnipeg Chamber of Commerce head Dave Angus, right, says the province's economic development strategy needs to 'create a sense of confidence we are on the right track.' (Sean Kavanagh/CBC )

Angus pledged to turn the recommendations into working solutions that get adopted into policy.

"I've been around a long time and seen a lot of economic development strategies," Angus said. "Many are documents that just sit around on a shelf."

Weak economic growth ahead: report

The need for a plan may be more critical if Deloitte's gloomy predictions come true.

The report suggests the growth rate of Manitoba's gross domestic product could slow to 0.3 per cent in 2018, citing slowdowns in mining, construction and agriculture. Deloitte's report says that trend could continue, with an average growth of one per cent through to 2021.

According to Statistics Canada, Manitoba's economy grew 2.4 per cent in 2016 and 2.8 per cent in 2017.

But Deloitte's dire forecast seemed of little concern to Pallister. 

"I'm a farm boy, right, so I care about grain in the bin, and everybody has a good crop in the spring before you actually determine the results," Pallister said.

"But theory at the start of the season doesn't actually matter much to me.… I've never worried too much about forecasts."

The premier said poor economic outlooks are a motivator to do better.

Complicated structure, poor tracking

There are other areas that offer room for improvement, the report says.

Deloitte says the government structure for providing funding to support business is complicated and sometimes has resulted in capital being given out without clear written expectations about how it's to be used.

In some cases funding is given to third parties based on a request, not a strategy, the report says.

It also says that often, the government is not paying close enough attention to what it's doing.

"Economic development programming is not being tracked consistently and when it is tracked, the data is insufficient," the report says.

Deloitte recommends the government collaborate across departments to collect the data it has and then accurately report on returns on the investments it has made.

The study also looked at programs the government supports — either through its own departments or through stand-alone agencies — and found there was "demonstrable" overlap. 
Payworks CEO Barb Gamey says an economic development strategy needs to establish benchmarks of success for government investment. (Sean Kavanagh/CBC)

Non-government agencies such as Economic Development Winnipeg and World Trade Centre Winnipeg receive funding from the Ministry of Growth, Enterprise and Trade, but appear to be doing some of the same work as departments within government.

Pallister told reporters direct funding is made through at least nine provincial departments to more than 100 different economic development agencies or projects.

"That's not focus, that's not target. That's just throwing money out there in massive numbers of different directions," Pallister said.

Pallister says the goal is to reduce some of the $50 million spent by the government on those efforts and redirect it with more precision.

The study also says Manitoba needs a better relationship with its federal counterparts, suggesting the province needs to better co-ordinate and collaborate with the feds to take advantage of initiatives supported by Ottawa.

Angus and Gamey are expected to have some strategic advice available no later than June of this year.