Vancouver
Economic
Development
Commission

YEAR END REPORT 2000

December, 2000
(revised March 2001)

Achieving Our Core Mission

Since its inception in 1996 the Vancouver Economic Development Commission has worked hard to achieve its mandate and to meet its Core Function

commitments pursuant to its annual operating contract with the City of Vancouver. These include:

¨ Promoting Vancouver nationally and internationally

¨ Responding to inquiries and providing information to potential investors;

¨ Organizing outbound trade missions and hosting incoming business delegations;

¨ Coordinating economic development activities of other levels of government as they pertain to Vancouver; and

¨ Defining the goals of an economic vision for Vancouver and creating an action plan to achieve that vision.

The Commission's accomplishments in the pursuit of these Core Function commitments during the year 2000 have been significant and the City of Vancouver has benefited from them.

¨ Job Creation We were instrumental in bringing over 500 new jobs to Vancouver through the establishment of two major call center operations in the City, and the attraction of an engineering firm from New Zealand to the Vancouver International Airport.

¨ Inquiry Response We have responded to over 800 first round business location information requests; held over 200 in-depth follow up information requests; and met with 20 companies, site selectors and location managers to promote the merits of Vancouver as a business location.

¨ Business Contacts Our inquiry response activities have increased dramatically as the Commission has become more than ever the first point of contact for business information on the City of Vancouver and the Region as a whole.
¨ Promotional Materials A full range of high quality multi-lingual promotional materials has been produced and over 12,000 files and other documents were downloaded by the over 33,000 users that logged on to our increasingly popular web site.

¨ Publications A number of high quality publications were produced, including our first ever Economic Outlook Report; a Special Feature in the British Columbia Business Magazine on the revitalization of the False Creek Flats; a Guide to 101 Financing Sources for Small Business in Vancouver; and a Guide to Business Opportunities in Vancouver, an 88-page full color booklet fully funded by sponsorship revenues.

¨ Promotion of Vancouver The Commission recruited delegates and exhibitors for Globe 2000; mounted a Team-Vancouver display at the Hong Kong Information Infrastructure Expo and Trade Show 2000 (along with 12 Vancouver companies); presented information on Vancouver at the Shanghai Products Show and Exhibition in Richmond; participated in an Italian Chamber of Commerce Media event; and participated in numerous Vancouver Board of Trade Events.

¨ Regional Coordination The Commission fostered the creation of a region-wide economic development vehicle - the Greater Vancouver Economic Partnership - and has supported it and other organizations in their pursuit of positive economic development initiatives important to our city

¨ Public Affairs The Commission was routinely called upon to provide informed public commentary on key issues, and we were cited in numerous press and other media reports. Many of our publications were sponsored in whole or in part by the corporate sector.

¨ Corporate Support The Commission was successful in raising over $100,000 in sponsorship-in-kind support for its endeavors. Much of this support was in the form of advertising revenue for Commission publications, free Internet systems support services and free translation services.

¨ Volunteer Support Throughout 2000 the Commission benefited from the volunteer assistance of a number of international and local student interns, who in addition to assisting in translating our publications, also contributed to many of our project activities, particularly in the Downtown Eastside.

¨ Advisory Board The Commission benefited this year from the insights and advice of a talented group of area business and academic leaders. The Commission's Advisory Board held its inaugural meeting in September and a number of important recommendations arose from this session. Many of these ideas will find expression in the Year 2001 Business Plan.

¨ Policy Commentary The Commission provided Council with a number of issues of substance, including regional transportation financing, major road network, urban transit system development. The Commission participates in a number of policy development activities managed by the City of Vancouver, including the Financing Growth Review.

In all, despite severe pressures in terms of lack of staff and financial constraints, the Commission was able to meet its Core Function obligations set out in its Service Contract with the City.

Project Activities

In addition to our Core Functions achievements, the Commission maintained a highly active project-oriented work program. These included the Downtown Eastside Economic Revitalization Project, Small Business Development Project, and the International City Project. In each of these areas, there were significant gains recorded.

The Downtown Eastside Economic Revitalization Initiative

The Downtown Eastside Economic Revitalization Initiative was a major part of the Commission's work program throughout the past year.

Over the past two decades, economic and social conditions in the communities that constitute the Downtown Eastside have taken a serious downturn.¹ To address the issues of crime, poverty, drug and alcohol addiction, homelessness and health, the City of Vancouver, the Province of British Columbia and the Government of Canada have come together under the umbrella of the Vancouver Agreement.

Prior to the conclusion of this Agreement, however, Vancouver City Council had tasked the Economic Development Commission to exercise leadership on efforts to stimulate economic revitalization of the Downtown Eastside.²

From the outset of its involvement in this community, the Commission realized that its economic revitalization efforts had to contribute toward:

¨ Improving safety on the streets by helping to make law enforcement and the administration of justice more effective;

¨ Ensuring that residents of the Downtown Eastside played an important role in the revitalization of their community;

¨ Providing accommodation for residents (as opposed to their displacement) by generating a good mix of non-market and market housing;

¨ Increasing the spending power of the local community to support local retail stores and services;

¨ Improving the capacity for all levels of government to address the needs of the community in a coordinated and cooperative manner; and

¨ Encouraging the many community-based organizations that work in the area to coordinate their activities in support of the economic revitalization.

To these ends the Commission's action program over the past year focused on the following priorities:

1. Augmenting entrepreneurial and business support services in the community;

2. Identifying viable revitalization models and programs;

3. Developing and implementing targeted business development and revitalization strategies;

4. Involving the community in the above activities.

The Commission has been successful in each of these areas.

¨ Working closely with City officials, the Commission launched the $300,000 Lease-Subsidy and Tenant Improvement Programs. Subsidy support under these programs is being provided to Common Concerns, the parent organization for the Clothes Encounters Laundromat. Two otherDowntown Eastside non-profits are developing social enterprise initiatives, which could utilize the Lease-Subsidy program.

¨ The Commission was successful in negotiating a comprehensive federal/provincial program for enterprise development in the Downtown Eastside in partnership with the Four Corners Support Fund Society. This program (PEACH - Partnership for Economic and Community Help), was officially launched earlier this year and will become operational effective January 2001.

¨ In support of this program, the Commission secured $500,000 in enterprise development funding from Western Economic Diversification, which in turn was levered to create a $2 million program of federal and provincial funding for loans, loan guarantees and non-repayable grants for enterprise development.

¨ These programs will be supported by a further $500,000 in operating funds that will be provided by Provincial and Federal agencies.

¨ Direct funding provided to the Commission by the City of Vancouver in the Year 2000 for Downtown Eastside activities consisted of $15,000 to administer the Lease-Subsidy and Tenant-Improvement Programs.

¨ The Commission was able to lever additional funding commitments in excess of $400,000 from various federal programs, which financed the bulk of our Downtown Eastside project activity. This funding covered the costs of project staff, some of our research activity (Part 1 of the Downtown Eastside Economic Capacity Study), and sundry other special events and publications.

¨ The Commission also established a Downtown Eastside Economic Revitalization Steering Committee and has engaged many business organizations on Downtown Eastside issues (Vancouver Board of Trade Community Affairs Committee; Downtown Vancouver Association; Urban Aboriginal Strategy Consultative Group).

¨ The Commission completed Phase One of the Downtown Eastside Economic Capacity Study, a project to determine the economic potential of the Downtown Eastside area.

Over the past year the Commission also engaged in a number of capacity building activities, including:

¨ Business Information and Self-Employment Training Workshops;

¨ A half-day workshop on Social Enterprise Development with the support and sponsorship of Telus; and

¨ Several small enterprise development projects in the Downtown Eastside with non-profit groups (DERA, Common Concerns, Tradeworks Training Society, etc.), for such endeavors as a laundromat/coffee shop, a street market, expansion of the Firehall Theatre, expanding the United We Can bottle depot, developing a First Nations crafts and tourism centre and programs to help employ local residents in the film industry.

In all, the Commission's efforts in the Downtown Eastside have resulted in significant benefits for the communities involved as well as for the City as a whole.

We recognize, however, that a great deal more is required. That is why the Commission has made the Downtown Eastside Economic Revitalization Initiative a major part of its Year 2001 Business Plan.

Small Business Development Project

The Commission launched a number of successfully initiatives in cooperation with other government agencies and business associations to promote small business development and to assist start-up companies in the City. These included:

¨ Small Business E-Office. Accessible on the Commission's website at http://www.vancouvereconomic.com, a Vancouver Small Business / Business Improvement Area (BIA) E-Office was developed offering free e-commerce tools, quick business guides, a financing directory, web casts, photos, PowerPoint templates, and other resources to help Vancouver entrepreneurs start and grow their small businesses. Since its launch in May, 2000, the website has attracted over 12,400 visitors from over 60 countries, and now averages some 120 visitors a day

¨ Business Development Events. Since March 2000, the Commission has delivered over 40 workshops and seminars on topics such as e-commerce and investing in Vancouver to over 2,000 small businesspeople in all parts of the city.

¨ Business Improvement Area Liaison. In cooperation with the City of Vancouver, the Commission developed a BIA Resource Guide for the 13 existing and four proposed Business Improvement Areas in the City. The guide includes a contact directory, a FAG (frequently asked questions) Guide, a sample budget, and a compendium of funding sources.

¨ Financing Assistance. A first of its kind ever directory of leading capital sources in the Vancouver area 101 Sources of Business Financing in Vancouver was published and made available on the Internet.

¨ One-on-One Consultations. Since April, 2000, approximately 300 small businesspeople in Vancouver have contacted the VEDC with questions on how to start and grow a business in Vancouver All efforts are made to respond within 24 hours and to provide as detailed answers as possible.

¨ Education. The Commission has developed custom tutorials and articles to help raise the general level of competence of small businesses in Vancouver. Written especially for Vancouver small business people, 10 tutorials areposted on the Vancouver E-Office website, and include primers on investment, international trade, and financing in Vancouver.

The Commission's Small Business Project and its many achievements were delivered without cost to the City. This represented over $60,000 of in-kind and alternate funding support provided by other government departments and agencies.

International City Project

Throughout 2000 the Commission worked to bring private and public sector players together in common cause to promote Vancouver as a major international city.

The Commission participated in a number of international events and coordinated an outgoing trade mission to Hong Kong's Information Infrastructure Expo and Conference. A number of Vancouver high technology companies showcased their products and expertise at the event and participated in one-on-one business matching meetings.

An important function of the Commission is to pass on information on the changing Vancouver economy and the business opportunities that exist for international investors. We do this in a variety of ways, including hosting incoming delegations and providing liaison services between Vancouver companies and visiting organizations with similar interests.

As part of Phase II of the International City Strategy Project, the Commission assembled information and promotional materials to market Vancouver as a model sustainable city. A number of business associations, organizations and individual companies will be brought in as partners on this initiative to complete a database on sustainable city contacts and urban design expertise.

This information, as well as the wide array of Commission material that has already been translated into such languages as Spanish, Japanese, Chinese, German and French, etc., will be placed on the Commission's International Vancouver web site scheduled for completion in May 2001.

These translations have been undertaken through the extraordinary commitment of a talented group of volunteers and interns from various International English Language Schools in Vancouver, supported by in-kind assistance from such organizations such as the Hong Kong Trade Development Council, the Japanese External Trade Organization, and several private companies.

In terms of specific achievements during the year, the following are of note:

¨ Trade Mission A Team-Vancouver Trade Mission to Hong Kong, Shenzhen and Guangzhou in Southern China took place in March, 2000. Led by Deputy Mayor Lynne Kennedy 13 companies took part in the mission, including companies concerned with:

¨ Financial management (KPMG, S&L Investments);
¨ IT innovation (Seagate Software, Sierra Wireless Clickhouse.com, Blast Radius);
¨ IT in education (Brainium.com);
¨ Healthcare Technology (Millennium Technology Inc.);

¨ Infrastructure (YVR Airport Authority);

¨ Communications (Choice Communications);
¨ Business Innovation and Management (The Knight Group); and
¨ Investment in Vancouver (Busby Associates Architects and Finning International).

The mission attended:

¨ Hong Kong Information Infrastructure Expo and Conference (HKII) -4 days;
¨ Shenzhen - Canadian Business Forum on Information Technology in E-Commerce, Multimedia and IT in Education- 2 days;
¨ Guangzhou - Canadian Business Forum on Information Technology in E-Commerce, Multimedia and IT in Education, and to promote Sister City relationships between Vancouver and Guangzhou - 2 days

¨ Follow On Benefits The Commission's trade mission to China generated important spin off business opportunities in the area of Information Technology in the Education sector that are being pursued in collaboration with UBC, Simon Fraser University and the Vancouver School Board.

¨ Multi-Lingual Promotion During 2000 the Commission produced multilingual inserts in Japanese, Italian, German, Spanish, Chinese, French, Russian and Korean.

¨ Incoming Delegations The Commission hosted 24 in-coming delegations from cities from around the world (Taipei, Italy, Fujian, Yuxi and Guongdong Provinces, China, the cities of Tian Jin, Pudong, Xiamen, Liaong, Tangsham, Qinhuangdao, and Shanghai China, Hong Kong (HK Secretary for IT), New York City (Downtown Economic Development Corporation), Rochester, NY, the State of Utah, etc.) Over 6000 pieces of information were provided to local and international organizations, delegations and individuals.

¨ Survey of Consulates A survey was completed of over 30 foreign consulates in Vancouver, consisting of questionnaires and follow up telephone interviews. The survey was designed to better coordinate the hosting of in-coming delegation. As a consequence, a number of these consulates now regularly use the Commission's services host incoming delegations.

¨ Survey of Trade Associations A second survey was conducted of business and trade promotional associations to seek a better understanding of the demands placed on them in hosting incoming missions or business delegations. Many associations confirmed the need for better coordination and suggested such coordination could be set up on a fee-for-service basis.

¨ Promotional Efforts A 35 minute Power Point presentation entitled "Vancouver: The 21st Century Gateway", was presented to numerous public and private sector organizations. It outlines Vancouver's assets as a "Livable City", ranging from our strategic geographic location to a comprehensive accounting of the City's industrial sectors, infrastructure assets and educational institutions.

¨ Research Project A key aspect of the International City Project was to assess emerging global issues not adequately handled by a defined international institution or agency and to assess whether Vancouver would be a suitable location to establish such an organization. This endeavor - the GERM Project - was an important element in developing an international city strategy paper.

Financial Report

Our limited staff and tight financial resources demand that we work in close partnership with other organizations and to bring together the resources of all three levels of government to benefit the economic development of Vancouver.

The Commission's original budget of $1,190,000 was reduced to $935,000 in August 2000 and then to $685,000 in September to reflect lower than anticipated sponsorship and revenue generation receipts. Actual operating revenues were $634,817 in 2000 and actual operating expenses for the year were $704,794 resulting in an operating shortfall for the year of $69,977.

This operating shortfall was caused by unbudgeted spending in several areas and due to the inability to generate sponsorship revenues as forecasted in the original budget. More specifically project work was commenced on the expectation that sponsorship revenues would be secured to assist with funding those projects. As noted above the commission was unsuccessful in securing these anticipated revenues during 2000 resulting in financial shortfalls.

Unbudgeted spending occurred in areas related to the introduction of a benefit plan for employees and due to higher than anticipated costs in obtaining legal, accounting, and insurance services.

Table 1 attached provides an un-audited income statement for the VEDC for the year 2000.

Maintaining Adequate Levels of Service

Our Commissioners have proven to be hard working and committed advocates for the city. Though acting solely as volunteers, they have given tirelessly of their time to make a difference for Vancouver. Throughout 2000, Commissioners examined closely how best they could contribute to the economic well being of the community at large. The debate was energetic and wide-ranging, totally in keeping with the maturation of the Commission as was envisaged when Council first approved its creation.

Despite the success of the Commission in raising resources from other government agencies or through sponsorship in kind, throughout the year many Commissioners expressed concern that the Commission was under-funded relative to the level of services required to meet its core services contract with the City of Vancouver. Certainly in comparison to other urban centers with which we compete for investment, this fact is obvious.

Based on 1999 levels of municipal funding provided to maintain a distinct Economic Development office, the City of Vancouver ($200,000) ranked second behind Surrey ($400,000), but only modestly ahead of Richmond ($150,000), North Vancouver District ($150,000) and Port Moody ($80,000) despite having a significantly higher general population and a much larger number of business establishments.

Comparison of Economic Development Spending by Local Municipality Relative to Vancouver (1999)
Municipality	Structure	Staff	MunicipalFunding	Population	Number of Employers2
Coquitlam	Separate office	1	$145,000	101,820	2,296
Delta	Separate office	1	$150,000	95,410	2,544
Maple Ridge	Within department	1	$100,000	56,175	1,390
N. Vancouver	Separate office	1	$150,000	80,420	3,603
Richmond	Separate office	1	$150,000	148,865	5,653
Surrey	Separate office	5	$400,000	304,475	6,810
Vancouver	VEDC1	6	$200,000	514,010	23,081
Notes: Source: Greater Vancouver Economic Partnership 1VEDC funding supplemented by sponsorship and alternate funding. 2 1994 data only.

Relative to other Canadian cities, Vancouver's funding for the economic development function ranks quite low. Edmonton's Economic Development Commission received $1.2 million in 1999. Calgary's EconomicDevelopment Authority received $1.5 million. The Greater Toronto Marketing Alliance and Greater Halifax Partnership received $2.4 million and $1.1 million respectfully. In addition, the Halifax Regional Development Agency receives $400,000 annually.

Compared to key American cities with whom Vancouver competes for investment dollars, the disparities are even greater.

Naturally there are marked differences between these agencies in terms of their composition and mandates. But what is evident in the comparisons at the local, national and international levels is that Vancouver's Economic Development function is severely under funded relative to the population base it serves.

For a City with so much to offer, and so much to lose by not being competitive, this is not a good situation. As the Commission has noted often, "Great Cities don't just Happen!" To make Vancouver great, we need to work hard and work together.

1 The Downtown Eastside and surrounding communities include five very distinct neighborhoods and historic areas that include Thornton Park and an Industrial Area. These include: Chinatown, Gastown, Strathcona, Oppenheimer and areas near Victory Square.

2 Council Decision, Standing Committee on Community Services and Budgets, July 9, 1999. " ...That the Vancouver Economic Development Commission (VEDC) be requested to take a lead role on behalf of the City in working with the three levels of government and the public to develop and begin implementation of a Downtown Eastside Economic Revitalization Strategy over the next eighteen months ...."