Scottish Rural Communities Policy Review: stage 2 - Canada case study

4. Provincial/Territorial and Local Government Rural Support/Policy

Infrastructure

As rural development is a joint jurisdiction in Canada, provincial and territorial governments have implemented a range of policies, programmes, and strategies to support it. Similar to the federal government, these policies, programmes, and strategies have ebbed and flowed over time. There is often overlap in direction among the various levels of government. Illustrative recent provincial/territorial rural development policies include those in Ontario and Quebec (see Boxes 1 and 2 below).

Box 1. Rural development policies: Ontario

The Ontario Ministry of Rural Affairs released a rural economic development strategy in 2025 focused on population growth, housing, infrastructure, broadband connectivity, workforce development, rural business growth, and rural Gross Domestic Product (GDP) growth (Ontario Ministry of Rural Affairs, 2025) . No evaluation has been conducted on the strategy to date.

Box 2. Rural development policies: Quebec

From 2001-2014, the Government of Quebec implemented a national rural policy (Politique nationale de la ruralité in French). The policy was praised for its engagement of multiple actors in building strategies, making decisions, and evaluating success (OECD, 2010) . The Quebec rural policy not only provided a vision for rural development, it provided substantial financial resources to achieve its objectives (Jean, 2020) . This investment, however, was not viewed as a positive public investment and the policy was discontinued in 2014 (Jean et al., 2014) .

The primary department responsible for rural development varies across the provincial and territorial governments. In some governments, such as Ontario, there is a stand-alone ministry. In other provinces, rural development is ‘housed’ in departments focused on agriculture, economic development, or natural resources. This inconsistency creates challenges for sharing knowledge between provincial and territorial departments (Hernandez Gongora & Gibson, 2020).

At the local government level there are a wide variety of policies and supports related to rural development. Local governments in Canada have limited powers devolved to them in comparison to other Organisation for Economic Co-operation and Development (OECD) countries (Watts, 2005). Local governments in Canada are also one of the most under-resourced among the OECD (Douglas, 2023). Local governments receive less than 12% of the Canadian tax base, but are responsible for approximately 60% of infrastructure investment (Douglas, 2023). Local governments can set their own approaches, strategies, and policies; however, often these approaches align with federal and/or provincial and territorial priorities. Local approaches may include economic development strategies, community development corporations, community improvement plans, immigration strategies, or workforce development strategies (Hall & Vinodrai, 2021). The human and financial capacities of rural local governments is limited and further strained by continually receiving additional responsibilities from senior levels of government (Barrett & Vodden, 2023; Douglas, 2023; Gibson & Dale, 2023).

There is no coordinated approach at the national level for local government initiatives for rural development in Canada. However, non-governmental organisations representing local governments, at both national and provincial/territorial level, convene rural forums for discussions and to advocate for rural policy and approaches (cf. Federation of Canadian Municipalities, 2019, 2025).

Community Futures Program

In 1985, the Community Futures Program was created by the federal government to empower rural communities in Canada to provide funding for local business development (both new businesses and the expansion of existing businesses), training and mentorship for entrepreneurs, and community economic development activities. The Community Futures Program represents a long-term, place-based approach to rural development focused on empowering local actors and providing financial resources (Larsson et al., 2012).

The Community Futures Program emerged following two earlier federal initiatives to address persistent rural unemployment and labour market adjustments: the Local Economic Development Assistance program (1980-1983) and the Local Employment Assistance and Development program (1983-1985). These programmes created community-specific responses and promoted a grassroots approach to federal government involvement in rural development (Ries, 2016). Evaluations of the two programmes demonstrated that effective rural development approaches need to be bottom-up, empower local actors, include dedicated funding, and incorporate both economic and social elements in the approach (Ries, 2016).

The Community Futures Program initially prioritised disadvantaged rural regions and focused primarily on job creation. The Program’s goals have evolved and now focus on three key objectives:

1. fostering economic stability, growth and job creation;

2. creating diversified and competitive local rural economies; and

3. building economically sustainable communities (Industry Canada, 2014).

The Community Futures Program provides funding to local incorporated non-profit organisations (referred to as Community Futures Development Corporations^[1]) to facilitate four activities:

1. Strategic community and socio-economic development planning

2. Business service provision

3. Financial capital for new and existing businesses and social enterprises through loans, loan guarantees, and equity investments

4. Support for local projects and special initiatives

Since 1985, the Community Futures Program has created 267 Community Futures Development Corporations, which operate as community-led non-profit organisations that provide services to 13.9 million people across rural Canada (Community Futures Canada, 2024). Most rural communities across the country can access services through one of the Community Futures Development Corporations. Each local Community Futures Development Corporation represents a region consisting of several rural communities ranging in population from 4,000 – 220,000 residents (Innovation, Science and Economic Development Canada, 2019).

Each Community Futures Development Corporation is governed by a board of directors composed of local leaders, businesses, and stakeholder groups. The board is responsible for approving strategic directions and financial commitments. Local boards are intimately familiar with their community’s economic realities and opportunities. The federal government does not play a formal role with the board of directors. Community Futures Development Corporations typically have 2-4 staff members to facilitate their activities. The federal government provides annual funding through multi-year agreements to Community Futures Development Corporations to offset operating expenses, and funding to establish loan capital to provide loans in their communities. These agreements typically span 3-5 years in length, enabling longer-term planning.

Each Community Futures Development Corporation receives an annual operating grant to deliver services and programmes, ranging from C$150,000 to C$350,000 (approximately £82,000 - £191,000) depending on the size and diversity of their region (Innovation, Science and Economic Development Canada, 2019). Their primary programmes and services include providing business loans, business capacity building and mentoring, and community economic development grants. Business loans can support new entrepreneurs, expansion of existing businesses, or business transitions to new products or services. Businesses loans can range from C$5,000 to C$300,000 (approximately £2,700 to £163,000). Decisions on loans and grants are made by the Community Futures Development Corporation’s board of directors. As a community-led initiative, there is a diversity in the programmes and services offered at each Community Futures Development Corporation. In addition to the business loans, Community Futures Development Corporations can also provide grants to support local projects and special initiatives. These grants provide support for a wide variety of initiatives, such as tourism promotion, local events/workshops, and promotion of local businesses.

Community Futures Development Corporations may also access funding from other departments of the federal government, provincial/territorial governments, and nonprofit/voluntary organisations to support their activities. Community Futures Development Corporations can also administer programmes on behalf of other organisations, such as the Regional Relief and Recovery Fund (as discussed in the next section).

Evaluations of the Community Futures Program are conducted by the federal government and by the network of Community Futures Development Corporations. Over the past two decades Community Futures Development Corporations have loaned “$6.3 billion to 135,000 businesses and leveraged $11.3 billion and influenced 779,856 jobs” (Community Futures Canada, 2024, p. 5). The impact of the Community Futures Program is significant in rural Canada, however, it should be noted that the achievements of each local Community Futures Development Corporation are often ‘lost’ in the national and provincial/territorial evaluations (Larsson et al., 2012).

Case Study: Community Futures Huron

Community Futures Huron is a Community Futures Development Corporation in southern Ontario. Created in 1993, it represents a region consisting of 58 communities and a total population of 61,366 residents (Statistics Canada, 2021). Community Futures Huron operates with a team of four staff members and a voluntary board of 13 directors.

Community Futures Huron receives an annual operating budget of approximately $333,000 (approximately £182,000) to deliver the four key services noted earlier. In addition to the annual operating budget, Community Futures Huron received a one-time investment of $1,000,000 (approximately £535,000) to create an Investment Fund. This investment from the Government of Canada was provided when Community Futures Huron was created. Each year the board of directors approves loans to existing and new businesses in the region. As loans are repaid, the principal and interest generated are re-invested in the Investment Fund.

Occasionally, Community Futures Huron is able to generate additional revenue for the Investment Fund through the administration of additional programmes beyond the initial Community Futures Program, such as the Regional Relief and Recovery Fund (see next section). In 2025, Community Futures Huron’s Investment Fund is $6.3 million (approximately £3.378 million). Box 3 outlines the key services/programmes and achievements for Community Futures Huron in 2024/2025 in the four main areas.

Box 3: Key services/programmes and achievements of Community Futures Huron, 2024/2025

Strategic community and socio-economic development planning

• • Partnered with 30 community organisations on 28 local economic development initiatives.

Business service provision

• • 155 jobs were created or maintained in the region this year through personalised business support consultations.
• • 120 one-on-one business consultations provided to local entrepreneurs and businesses.

Financial capital for new and existing businesses and social enterprises through loans, loan guarantees, and equity investments

• • C$1,273,554 (approximately £695,000) in loans to 23 businesses in the region.
• • 88 jobs were created and maintained as a direct result of loans disbursed.

Support for local projects and special initiatives

• • $214,700 was invested into community economic development projects as grants.

Source: Community Futures Huron (2025)

To facilitate support for local projects and special initiatives, Community Futures Huron partners with the county’s economic development board to increase the funds available. This partnership allows for the pooling of funds to support local initiatives, alleviates potential overlap in programmes, and can allow for more grants to be dispersed to support the economy. Recent examples of local projects supported include initiatives to create online markets for local produce, to support retention of health care workers, and to support conferences and events. Further details on recently funded local projects can be found on the Community Futures Huron website.