|2002/03 Annual Service
Ministry of Competition, Science and Enterprise
Ministry Role and Services
The Ministry of Competition, Science and Enterprise is the primary
agency responsible for initiatives and programs dedicated to creating
a strong provincial economy in British Columbia. The Ministry is
- establishing and expanding partnerships with entrepreneurs,
businesses and organizations throughout British Columbia;
- encouraging a culture of innovation and entrepreneurship;
- developing and enhancing national and international investment
and trading relationships; and
- implementing the Heartlands Economic Strategy across the province.
In fulfilling this mandate, the Ministry deals with a broad spectrum
of industries including bio-technology, high-technology, ports and
marine industries, aero-space and automotive industries. Additionally,
the Ministry has specific responsibility for: small business, venture
capital, tourism, film and television production, and new media.
The Ministry is also responsible for the government-wide deregulation
This Annual Service Plan Report is the first annual report following
the government-wide implementation of rolling annual three-year
service plans for the period 2002/03 to 2004/05. Service Plans play
an important role in ensuring each ministry effectively plans the
future use of its resources, guides ministry endeavours, and creates
a range of performance targets. This Annual Service Plan Report
describes the Ministry's goals, objectives and strategies, as well
as reports on the degree to which the Ministry succeeded in achieving
its performance targets in 2002/03.
Ministry Vision, Mission and Values
The Ministry's vision echoes two key elements of the Government's
- A thriving private sector economy that creates high-paying job
- The fastest growing technology industry in Canada.
The Ministry's mission statement is focused on three key areas:
Ensure British Columbia has the most attractive investment climate
and business climate in North America.
Encourage a culture of innovation and the development and transfer
of new knowledge benefiting individuals, businesses and communities.
Promote economic growth by aggressively pursuing increased marketing
of British Columbia which results in the growth of investment and
3. Core Values
The Ministry is focused on establishing and expanding partnerships
with entrepreneurs, businesses and organizations throughout British
Columbia in order to build a strong private sector-driven economy;
foster an innovation culture for science and technology; and develop
national and international investment and trade relationships.
We are advocates within Government for entrepreneurs and business,
and marketers of our competitive economic climate to national and
international investors in the global market place.
Our Ministry believes in customer service. We will be a results-driven
organization that measures performance at both the global and individual
The Ministry of Competition, Science and Enterprise is the primary
provincial agency responsible for initiatives and programs dedicated
to creating a strong provincial economy in British Columbia. Activities
within the Ministry are focused on building a competitive business
environment, that gives the private sector the confidence to invest,
generate opportunity, and create jobs throughout British Columbia.
The Ministry's responsibilities are to:
- Remove barriers to business;
- Champion competitive business practices;
- Market British Columbia as an attractive investment location;
- Encourage innovation and the development and transfer of knowledge;
- Ensure efficient, effective management and regulation.
- Establish and expand partnerships with entrepreneurs, business
and organizations throughout British Columbia;
- Encourage a culture of innovation and entrepreneurship;
- Develop and enhance national and international investment and
- Be the advocate in Government for the competitive interests
of entrepreneurs, business and investment community; and
- Focus on expanding pools of venture capital in the Province.
The Ministry is also responsible, through the mandate of the Minister
of State for Deregulation, for the deregulation initiative to achieve
the New Era commitment to cut red tape and reduce the regulatory
burden by one third within three years.
The Ministry delivers its services and programs through four divisions
and the Deregulation Office:
Economic Policy — provides for the development, analysis
and preparation of policy and strategies relating to enhanced competitiveness
and economic development in the Province, particularly trade, tourism,
and the film industry, as well as the delivery of federal-provincial
economic development programs.
British Columbia Trade and Investment Office — promotes
growth and diversity of British Columbia's economic base by actively
pursuing new investment, expansion of existing business, and development
of trade and market opportunities.
Science, Technology and Telecommunications — develops
policies and initiatives to support science and technology including
the promotion of new technologies in existing industries and the
creation of new knowledge-based industries.
Management Services Division — provides financial,
human resources, records management and information systems support
to the Ministry.
Deregulation Office — provides policy advice and supports
the Minister of State for Deregulation's mandate to set the framework
and oversee the government-wide commitment to cut red tape and the
regulatory burden by one third within three years.
Ministry Operating Context
The operating context is an assessment of the general economic
operating environment that businesses faced during 2002/03. It also
includes some external and internal factors that have an impact
on the business and investment climate, and by extension, the Ministry's
ability to deliver results.
Fiscal year 2002/03 can be characterized as a year that started
with a period of economic uncertainty, then saw substantial job
gains through the middle part of the year, before ending with another
bout of uncertainty.
In the early part of the year, the US economy was still experiencing
the aftershock of the September 11, 2001 terrorist attacks. This,
combined with anaemic stock market performance and significant corporate
scandals, contributed to low consumer confidence. Some analysts
feared that low consumer and investor confidence in the US, along
with the US Government indicating an impending confrontation with
Iraq, would negatively impact Canada's economic prospects.
By the middle of the fiscal year the Canadian economy had outpaced
the US economy by a wide margin, and it was apparent that the Canadian
and US consumers had differing views. In Canada, consumer confidence
rose to a 14 year high, while in the US it remained just above recession
levels. By late summer 2002, the US economy had lost 380,000 manufacturing
jobs, and factory shipments had increased by only 1.4 per cent.
In contrast, the Canadian economy had created 148,600 jobs, and
manufacturing shipments had risen seven per cent.1 Analysts
credit Canada's economic success in 2002 to a combination of low
interest rates and tax relief that released pent up consumer demand.
This trend was particularly apparent in the housing and auto-manufacturing
British Columbia's economy also saw significant job growth with
a gain of over 85,000 jobs — an increase of nearly
five per cent — from the beginning of the year through August 2002.
The British Columbia economy experienced strong job gains in construction,
manufacturing and small business sectors. While these sectors saw
positive job growth, the Province's resource sectors, particularly
forestry and fishing, continued to struggle through the year.2
By the last quarter of 2002, the economy showed signs of succumbing
to economic weaknesses in the US. Canada's growth tumbled from about
3.6 per cent in Q3 to about 1.6 per cent in Q4.3 British Columbia's
economy also started to shed jobs as some rebalancing set in to
compensate for huge job gains during 2002.
By the end of fiscal 2002/03, the war in Iraq contributed to plummeting
consumer confidence. In Canada consumer confidence fell to its lowest
level in a year, while in the US consumer confidence plunged to
its lowest level in almost a decade.4
In the last three months of the fiscal year, the divergence between
the Canadian and US economies pushed the Canadian dollar to recent
highs against the US dollar. During the first three months of 2003,
the Canadian dollar gained four cents US to stand at over US$0.68.
This increase is attributed to weak US economic performance, and
higher interest rates prevailing in Canada.
Overall, British Columbia's economy grew by 1.8 per cent in 2002,
recovering from a 0.2 per cent decline of 2001.5 For the
first three months of 2003, British Columbia's economic index grew
by 1.3 per cent, indicating improving economic conditions for 2003.6
Business Sector Overview
Travel to British Columbia is growing despite on-going global challenges.
The Province hosted over 5.1 million overnight visitors in 2002,
up two per cent from 2001. Overnight entries to British Columbia
accounted for more than one quarter of all such entries to Canada.
Entries from the US increased 3.8 per cent in 2002. Visitors from
the Asia Pacific region increased 2.3 per cent compared to 2001,
while performance in European markets was mixed. However, the outbreak
of Severe Acute Respiratory Syndrome (SARS), and war in Iraq depressed
global travel in the first quarter of 2003, and also impacted British
Columbia. Visitors to British Columbia declined 12.6 per cent during
the first three months of 2003, although the decline was less in
British Columbia than in the rest of Canada, which declined 18.4
per cent during this period.
British Columbia and its travel industry continue to be recognized
as tourism leaders internationally:
- Number 1 destination in North America for kayaking and whale
watching (UK's Harpers and Queen Magazine);
- BC Escapes Program garnered its second consecutive RSVP Award
for excellence in direct marketing (Canadian Marketing Association);
- Wedgewood Hotel in Vancouver rated as the best hotel in Canada
(Conde Nast); and
- Aerie Resort on Vancouver Island rated as the best North American
resort (Conde Nast).
The 2002 Small Business Profile identified that almost 98 per cent
of all businesses in British Columbia were small businesses.
An estimated 930,900 people were employed by small businesses. This
represents 52 per cent of all private sector jobs in the
Among the provinces, British Columbia ranked first in Canada with
the highest proportion of Gross Domestic Product (28 per cent) attributed
to the small business sector.
Small businesses exported $11.3 billion worth of merchandise to
international destinations, representing 34 per cent of
the total value of goods exported from the Province. Small businesses
comprised 93 per cent of employers in high technology, the
sector experiencing the fastest growth in new small businesses.
Science and Technology
British Columbia's high technology industries faced serious challenges
in 2001 as a result of the global economic turndown and continuing
financial challenges experienced by the telecommunications industry
in particular. It began a strong turn-around in the last half of
2002, ending with high technology service industries growing 7.6
per cent. Gross Domestic Product in the high technology sector grew
14 per cent in the last half of 2002. High technology exports to
the European Union doubled in the last half of 2002, with exports
to Japan up by a factor of 12.
British Columbia is the third largest centre in Canada for biotechnology
research and development and ranks the 16th largest in North America.
It is Canada's fastest growing biotech region. For example, exports
of life sciences products and services grew from $82 million
in 2000 to $186 million in 2002. Our expertise is gaining world
recognition — in May 2003 a British Columbia team at the Michael
Smith Genome Sciences Centre in Vancouver was the first in the world
to complete DNA sequencing on the coronavirus, implicated in SARS.
The Premier's Council on Technology is working to develop industry
sector strategies to grow industry clusters based on our science
and technology expertise in such areas as fuel cells and information
technologies. This, combined with Government investments in both
physical and human resource infrastructure in science and innovation,
is building a strong foundation for the future.
Since 2000, British Columbia has consistently received 10 to 13
per cent of the venture capital invested in Canada. In each of the
last three years — 2000 to 2002 — approximately $500
million was invested in the province with the cumulative amount
totalling $1.6 billion by the end of 2002.
However, venture capital in British Columbia faces a number of
challenges. For the past five years, "expansion" investments accounted
for approximately 80 per cent of all venture capital transactions
in British Columbia. This statistic reflects the acute shortage
of early-stage or "seed" capital for new venture start-ups. It is
the "equity capital gap" that the programs administered under the
Small Business Venture Capital Act and the Employee Investment
Act seek to address.
Regional economic development remains a priority. Currently, 98
per cent of all venture capital investment occurs within the boundaries
of the Greater Vancouver Regional District and the Capital Regional
District. The primary challenge is to balance the need for attractive
shareholder returns with the start-up and expansion capital needs
of emerging businesses in the Heartlands.
Another challenge to address is the relative scarcity of experienced
capital managers. However, recent amendments to the Small Business
Venture Capital Act to enable eligible small businesses greater
access to capital and the resultant dramatic upswing in venture
capital company registrations (i.e. from 30 registrations in all
of 2002/03 to 30 registrations in April 2003, alone), combined with
the launch of a new fund in the labour-sponsored fund market, have
been hailed as positive steps towards increasing the supply of venture
capital. This increased activity is expected to ultimately increase
the pool of experienced capital managers in British Columbia.
Film and Television
Film and television production in British Columbia reached $993.6
million in 2002. Some 205 productions were shot in the Province.
Of these, 140 were Canadian productions worth $163.6 million and
65 were foreign productions worth $830 million.
Three trends emerged in 2002:
- A 28 per cent increase in spending, over the previous year,
on big-budget foreign feature films;
- Fewer foreign television series due to the proliferation of
reality television; and
- The continuing downward trend in Canadian dramatic television
- Introduction of new animation or visual effects enhancements
to existing film and TV tax credit programs, as well as the extension
of the regional bonus to the Production Services Tax Credit program
will help ensure British Columbia maintains its position in an
increasingly competitive global industry.
The following are factors external to the Ministry that have impacted
British Columbia's economy, or specific business areas, to some
degree during 2002/03.
- Strengthening Canadian Dollar: The resurgence of the
dollar towards the end of 2002/03 could impact some of British
Columbia's export-dependent industries such as forestry and high-tech
sectors. Also, the strengthening dollar raises issues for British Columbia's
film industry. To enhance the film sectors relative competitiveness,
the Ministry oversaw the implementation or expansion of regional
tax credits and film tax credits for new media, animation and
- Restricted International Travel: The reduction in corporate
travel spending and the increase in international security in
the aftermath of September 11, 2001, continued to dampen international
business activities in 2002/03. Many business events and missions
were cancelled in 2002/03.
- SARS: The outbreak of Severe Acute Respiratory Syndrome
(SARS) contributed to a further weakening of international business
activity towards the end of 2002/03. The tourism sector experienced
the greatest impact from SARS, due in large part to cancelled
visits from Asian travellers.
- Kyoto Protocol: There is continued uncertainty over plans
to meet Kyoto's stringent carbon emission targets and the potential
costs involved. This uncertainty is hampering the private sector's
ability to calculate the costs of ratification and make key decisions.
It is possible this uncertainty will discourage investment
in British Columbia (relative to the US which will not ratify
the protocol), particularly in the energy sector.
The main internal factors affecting the Ministry are:
- Ministry Workforce: Like other ministries across Government,
the Ministry of Competition, Science and Enterprise is facing
a demographic challenge as a result of its ageing workforce. This
presents significant recruitment and succession challenges.
- Shared Services: Implementation of the Government's shared
services program has resulted in staff transfers and required
staff adjustments regarding roles and responsibilities with respect
to finance and human resources functions.
- Communications: Centralization of communications functions
across Government has resulted in a reduced number of communication
staff supporting the Ministry.
Strategic Shifts and Significant Changes in Policy Direction
This section identifies significant changes in policy, structure
or key programs which have occurred in 2002/03.
The Ministry was established in 2001 with a mandate to create the
conditions for a thriving private sector economy by eliminating
unnecessary regulations and removing the barriers to business. Initial
first year efforts focused on identifying the barriers to business,
quantifying regulations and setting deregulation targets. In 2002/03,
the focus shifted towards removing barriers to business, and eliminating
regulations. Other shifts include:
- Embracing the move towards e-government by advancing the electronic
single business window approach to business registration and business
- Establishing innovative delivery mechanisms for services. The
Canada/British Columbia Business Service Centre, the Province's
key resource center for business information and services, was
transitioned from a federal/provincial partnership to a non-profit
- Created the "Invest British Columbia" label to unify and coordinate
under a single "brand identity" key investment activities led
by the British Columbia Trade and Investment Office, in partnership
with urban and rural communities, the Government of Canada and
business sector participants in real estate, utilities and other
- The Altura Growth Fund was selected as the second labour-sponsored
investment fund (LSIF) to be registered in British Columbia —
opening competition in the LSIF market for the first time.
- The Ministry refocused its marketing activities and moved from
developing an overall marketing and branding plan to a more structured
approach, targeting priority markets and key sectors in partnership
with the private sector.
Update on New Era Commitments
The following table identifies the Government's priorities for
which the Ministry is responsible, and describes the current status
of each priority.
|Within 90 days initiate commitment to eliminate
Government subsidies to businesses that give companies an unfair
advantage over their competitors.
||This review was completed in January 2003,
and 23 programs considered to be subsidies to business
were eliminated. On-going monitoring and advice regarding new initiatives.
|Within 90 days initiate a commitment to
establish a new Premier's Council on Technology.
||The Council has been operating for almost
two years and in March 2003 issued its fourth report. It outlines
the priorities the Government should address over the coming
year. The report also begins to address strategies for developing
key industry clusters.
|Cut "red-tape" and regulatory burden by
one-third with in three years.
||Commitment ongoing. As of the end of March
• Across Government, a total of 61,942 regulatory requirements
were eliminated, 11,821 added for a net reduction of 50,121
from the adjusted baseline of 382,139 requirements.1
• This 13 per cent net reduction exceeds the government-wide
target of 12 per cent.
• At more than five-to-one, the results are well ahead of the
target of eliminating two requirements for every new one introduced.
|Stimulate tourism with a plan to improve
operators' ability to successfully compete for visitors from
around the world.
||• Chaired first meeting in years of Federal-Provincial-Territorial
Tourism Ministers in Victoria (December 2002), and another in
Vancouver (May 2003), to identify and remove barriers impairing
the competitiveness of the tourism industry, and to advance
British Columbia's tourism interests with the Government of
• Provided $750,000 funding to support targeted marketing efforts,
and an additional $500,000 to regional and aboriginal tourism
associations for tourism promotion.
|Work to extend high-speed broadband Internet
access in British Columbia through wireless technology, cable,
phone lines and fibre optics.
||British Columbia is the most connected Province
in Canada. By the end of 2003, more than 80 percent of our citizens
should have access to affordable high-speed broadband service.
Responsibility for this area has been transferred to the
Ministry of Management Services.
|Push to eliminate interprovincial trade
||Intergovernmental Relations brought the
Province into full compliance with Agreement on Internal Trade
(AIT); one of only two jurisdictions to achieve this. Working
with other jurisdictions across Canada to improve the AIT and
ensure barriers to businesses are removed.
|Key Projects — Set
Out in the Premier's Letter to the Minister (June 25, 2001)
|Take the lead role in ensuring our tax,
regulatory and labour environment is consistent with the new
||The business subsidy review has been completed
and combined with new tax policy, fees and licenses review and
the deregulation initiative, provides the basis for renewed
economic growth. The Ministry also renewed and expanded tax
credits to enhance the competitiveness of the Film Industry
(e.g., regions, new media, animation and special effects).
|Consolidate and rationalize scientific activities
with the Government, working with the Ministry of Advance Education.
||A comprehensive review has indicated that
there are no major areas of concern. No overlaps or duplication
of activities could be identified.
|Review the policy for fees and Licenses.
||Fees and licenses review policy developed
to ensure they are, among other things, simple, appropriate
and competitive. By March 31, 2003 over 80 per cent of fees
and licenses reviewed, with remainder to be reviewed by June
|Support the Premier's Technology Council.
||Responsibility for this area has been transferred
to the Ministry of Management Services.
Core Business Areas
The Government's overarching aim is for British Columbia to have
the best performing economy and the highest quality of life in North
America. A key goal of government is to establish a strong and
vibrant provincial economy, which includes:
- A thriving private sector economy that creates high-paying
- The fastest growing technology industry in Canada;
- Greater equity and equality for British Columbia in Canada;
- Responsible, accountable management of public resources and
To support this goal, and its components, the Ministry developed
a vision for "a thriving private sector economy that creates
high-paying job opportunities; and the fastest growing technology
industry in Canada."
In order to effectively and efficiently deliver functions to support
the Ministry's vision and its corresponding goals and objectives,
the Ministry created four core business areas for the provision
of programs and services. The core business areas in 2002/03 are:
1. Removing barriers to business;
2. Economic policy and strategic advice;
3. Marketing and investment; and
4. Encouraging innovation and the development and transfer of new
Core Business Area 1: Removing Barriers to Business
The primary role of Removing Barriers to Business is to:
- Oversee the government-wide deregulation initiative to cut red
tape to reduce the regulatory burden by one-third within three
years and implement the Ministry's three year deregulation plan;
- Conduct a comprehensive cross-government review of provincial
subsidy programs with the intention of eliminating subsidies to
- Review fees and licenses policy to ensure fees and licenses
are competitive and the rates levied are appropriate;
- Work with industry stakeholders and community groups to streamline
the permitting process, including film locations and land access;
- Removing barriers to key Government projects and initiatives.
|Ministry three-year Deregulation Plan.
||As of March 31, 2003 the Ministry had achieved
a 31 per cent net reduction from its baseline of 2,329
regulatory requirements through the repeal of obsolete legislation
associated with the venture capital investment strategy.
|Government-wide deregulation initiative.
||Achieved a net 13 per cent reduction from
the baseline of 382,139 regulatory requirements.
|Eliminate subsidies to business.
||23 subsidy programs terminated.
|Review fees and licenses.
||2,345 fees reviewed to date (some 80 per
cent completed, with outstanding items to be completed by June
30, 2003, subject to policy reviews).
|Streamline permitting process.
||Film locations policy under development
to enhance British Columbia's competitiveness as a film production
Core Business Area 2: Economic Policy and Strategic Advice
The primary role of Economic Policy and Strategic Advice is to:
- Coordinate the development of strategic options to respond to
specific provincial economic development issues and Government
initiatives (e.g. ports competitiveness, elimination of business
- Represent the Ministry's mandate and provide a business advocate
position during the development of key initiatives by other ministries
(e.g. input and comment during the development of the Community
Charter, Results Based Forest Practices Code);
- Provide advice to ministries and agencies to ensure emerging
policy initiatives do not compromise Government's advances to
improve competitiveness such as the elimination of business subsidies
(e.g. Economic Measures for First Nations);
- Manage and report on economic trends and conditions including
responsibility for updating the "Tax Environment" paper;
- Monitor economic development planning in key competing jurisdictions
and maintain an inventory of economic strategies and planning
documents from other jurisdictions; and
- Manage British Columbia/Canada Infrastructure program to improve
urban and rural local government infrastructure; and manage the
Western Economic Partnership Agreement to support economic development
in British Columbia.
|Canada-British Columbia Infrastructure Program.
||103 green community projects announced to
date. Preliminary discussions with the federal government as
to a successor initiative.
|Western Economic Partnership Agreement (WEPA).
||48 projects underway. Discussions with the
Federal Government on a successor agreement.
Core Business Area 3: Marketing and Investment
The primary role of Marketing and Investment is to:
- Develop a global marketing strategy to promote British Columbia
as a potential investment location and tourism destination, and
market British Columbia as a location for film and television
- Identify, market and promote British Columbia enterprise and
technologies, and work with industry on sectoral marketing initiatives;
- Organize and support missions to priority markets;
- Host incoming missions and trade delegations, and coordinate
and support the Ministers' and the Premier's trade missions; and,
- Administer programs, under the Small Business Venture Capital
Act, to assist small companies raise capital for business
start-up and expansion.
|Inbound Trade Missions.
||Hosted over 100 trade and investment missions
from key markets from around the world, including US, Europe,
|Outgoing Trade Missions.
||Organized investment and trade missions
to India, Japan, Taiwan and California.
||Attracted two new call centers to British
Columbia potentially creating over 1,400 new jobs.
|Implement international sales and marketing
• Developed an international marketing action plan;
• updated the "Investment Climate" package; and
• launched the Invest BC website containing business and community
information required by potential investors.
|Trade and Investment Initiatives - launched
sectoral initiatives to key markets.
||Showcased British Columbia products in major
international trade and investment events for:
• alternative energy;
• oil spill response;
• telecommunications; and
• green buildings.
|Initiatives to support capital formation.
• Small Business Venture Capital Act amendments to assist
small businesses raise start-up and expansion capital.
• Launched the Altura Growth Fund in the labour-sponsored fund
• Conducted information seminars for the new Provincial Nominee
Program (to attract business immigrants who meet provincial
|Vancouver Convention and Exhibition Centre
||Completed site purchase.
Core Business Area 4: Encouraging Innovation and the Development
and Transfer of New Knowledge
The primary role of Encouraging Innovation and the Development
and Transfer of New Knowledge is to:
- Stimulate the growth of infrastructure that will attract investments
in science, technology and telecommunications.
- Work with universities, entrepreneurs and venture capitalists
to increase technology commercialization in British Columbia.
- Make British Columbia a magnet for attracting and retaining
technology and science researchers.
|Investment in regional science and technology
||Invested $1.5 million in 12 regional organizations,
delivering a range of services, including new business start-up
seminars, venture capital workshops, technology mentoring programs,
investment matching opportunities, research and technology transfer
services, and patent and licensing assistance in all regions
across the Province.
|Investment in research and development infrastructure.
||Invested $4.45 million in five major research
and development infrastructure activities. This support resulted
in an additional $2.9 million (70 per cent) investment from
private and public sector sources.