Transparency in Action: Business Cape Breton
Some organizations are like cats, not in the sense that they hunt and kill mice (although with the level of transparency we have in the CBRM, who knows?) but in the sense that they have nine lives — end one and they start another.
Business Cape Breton Association (BCB) is like that.
BCB has existed since 2013, when it replaced the Cape Breton County Economic Development Authority (CBCEDA), which lost its federal funding when the government decided to fund regional development by project rather than through agencies. (CBCEDA briefly became the Cape Breton Small Business Development Centre Society — proud sponsors of the Cape Breton Small Business Development Centre Society Peewee AAA Ice Caps, which is not true but would have been great, you have to admit it — before becoming BCB).
Of course, BCB didn’t lose quite all of its federal money because ECBC/ACOA continued to fund its small business development program. I asked ACOA spokesperson Alex Smith how much money the federal government has provided BCB and he said that since 1 April 2013, ACOA and ECBC combined have provided $965,067 to the organization.
In 2013, the province stepped in to make up for the lost federal funding and decided a fun thing to do would be to force Nova Scotia municipalities into “regional enterprise networks” or RENs. The CBRM became part of Regional Enterprise Network 6 (which sounds like something from a dystopian sci-fi novel) along with the counties of Victoria, Richmond and Inverness. BCB and the Cape Breton Partnership were to be REN 6’s “delivery agencies.”
This apparently worked for a year and then in May 2016, CBRM Mayor Cecil Clarke suddenly went to the REN 6 Liaison and Oversight Committee and told them the CBRM was leaving the organization. Clarke should have given a year’s notice to withdraw, but members of the committee passed a motion waiving that requirement (silly old rules).
Clarke then, on 8 June 2016, told CBRM Council the municipality had left REN 6 and asked it to a) approve the 2016/17 budget for BCB and b) declare BCB the CBRM’s economic development “entity,” without providing any detail as to what that would look like.
Council (with the exception of District 6 Councilor Ray Paruch) complied. (I used to wonder, sometimes, what that old Council’s limits were. If the Mayor had put before them a motion stating they should all take a long walk off a short wharf, would they have approved it? In my darker moments, I think so.)
Clarke assured Council the province would play ball and give the CBRM its share of the REN 6 funding directly.
But the province didn’t play ball, as I just discovered last week. The CBRM requested it be treated as a REN in its own right and the province said, “Go pound sand.” (I’m paraphrasing.)
I asked the Department of Municipal Affairs why it turned down the CBRM’s request and spokesperson Sarah Gillis told me by email:
The request was outside the scope of the REN program.
So, that’s enlightening.
Whatever the reason for the brush-off, it left BCB without any provincial funding in 2016. Fortunately, the CBRM gave it $223,956, plus another $63,562 for its Small Business Development Centre and an additional $106,000 in the form of a “sustainability” grant for its CBRM Blossoming project. (A project that didn’t actually meet the CBRM’s criteria for sustainability grants and which the CBRM’s CFO recommended should, in future, be the responsibility of Parks and Grounds. Silly old rules.)
ACOA was supposed to provide an additional $285,080 for the Small Business Development Centre but BCB CEO Eileen Lannon-Oldford told the Cape Breton Post in January that they had lost the small business program and its three employees and were “trying to work with ACOA to move forward on that. If that’s going to be a project as we move forward and if not, we would like the contribution from CBRM so we retain a business development officer…”
I asked ACOA spokesperson Alex Smith what the status of funding for BCB’s small business program was and he replied that ACOA does not comment on funding applications.
Let’s recap: having lost most of its federal funding in 2013, CBCEDA become BCB with municipal and provincial funding (plus some ECBC/ACOA funding). Then, in 2016, it lost its federal and its provincial funding, shed five of its eight employees and yet somehow continued to cling to life, claiming to be the economic development entity of the CBRM.
And then, like a bolt from the blue in January 2017, came $225,000 from the Department of Municipal Affairs to fund a Glace Bay revitalization study.
Sarah Gillis said that money is not REN funding. I asked if a portion of it could be used to finance BCB’s operations and she replied:
If CBRM has BCB administer the project, then it is likely that a portion of the funding will be used for administration cost. This is a question for both CBRM and BCB.
Actually, I already knew the answer to the question, as the Post story announcing the study carried the headline, “Business Cape Breton to Oversee Glace Bay Revitalization,” and contained this quote from BCB’s new board chair, Parker Rudderham:
Business Cape Breton has a great track record in facilitating community revitalization planning.
Which is why Cape Breton is just crawling with revitalized communities, I guess. (I wonder if a “revitalized” Glace Bay will include large baskets of flowers?) So the question becomes, how much of that money will be spent on “revitalization planning” and how much will disappear into BCB?
What does BCB do?
Now seems as good a time as any to try to pin down exactly what it is BCB does. The Cape Breton Post dedicated an entire page to the organization in January 2017 with the stated purpose of finding out “what the body does, who it works with and how it is funded,” which makes me think that, like me, the Post looks at BCB the way Spinal Tap looked at the Druids — “Nobody knew who they were or what they were doing.”
Here’s Lannon-Oldford’s response to the question, “Can you talk a bit about what it is Business Cape Breton does?’
Entrepreneurial awareness — what we’re trying to do is to plant the seed in the minds of young people, middle aged-people, anyone that is interested and thinking about an option of opening their business, becoming an entrepreneur. We have a business online training program that they can go in at their own leisure, go through all of the processes there …People are extremely busy and they can’t always come into an office, come into a workshop or whatever.
So, whatever it is they do, they’ve found software to do it for them.
The Post’s full-page profile (which was followed a week later by a full-page ad for BCB — coincidence?) included an interview with BCB’s new board chair, Parker Rudderham. Rudderham, the paper said, joined the board “six months ago” and now heads it.
Longtime BCB board member LeRoy Peach told me that Rudderham became BCB’s board chair in September 2016. (Peach said he himself had served as interim chairperson of BCB for “a couple of months” after “Rev. Tom Whent retired from the post.”) The board also went from eight to seven directors.
What’s interesting about this is that the BCB listing in the Nova Scotia Registry of Joint Stock Companies still lists eight board members, with Peach as chair (this screen shot was taken yesterday, 7 February 2017):
According to Karla Park of the Nova Scotia Registry of Joint Stock Companies:
As per the Societies Act you are required to submit any changes to the Registry within 2 weeks (14 days) of the change. This is as per section 20. Once received by our office we would update the records accordingly within the turn around of 5-10 business days if everything is complete.
Which means Business Cape Breton, which advises clients on establishing businesses in Nova Scotia, is breaking the rules for doing business in Nova Scotia. Silly old rules.
So that’s fun. And then there’s this (see right):
That would be BCB signs in the windows of an empty storefront on Charlotte Street in Sydney. The building is owned by Rudderham. I emailed information at BCB to ask if they planned to move into the Charlotte Street space (their current offices, on King’s Road, are in a building that is for sale). The Mystery Person who answered the email said:
BCB is currently using the space at the Smart Shop for promotional purposes. We have no immediate plans to change our location. I hope this helps!
I asked if they were renting the space for “promotional purposes” – which, even before I read The Ethicist this week on conflicts of interest I knew would be a no-no — and Mystery Person replied:
No, we are not.
Watch that space…
Attach some strings
The point of all this — by which I mean, this week’s articles on BCB and Destination Cape Breton Association — is that organizations, agencies, associations or any other bodies that receive significant amounts of public funding (we could define it as a certain proportion of their overall budgets) should be open to public scrutiny.
They should be subject to the same rules that govern actual public bodies — their board structures should be transparent, their by-laws should be publicly accessible, their hiring practices should be clear and fair (and involve calling for resumes, interviewing applicants and making informed choices).
Salaries above a certain level should be public knowledge, expense claims should be posted.
Moreover, in the case of BCB, which is apparently some sort of arm of the CBRM, it should receive direction from Council — and should report to Council regularly, not once a year when it wants its budget rubber-stamped. Council should know when its economic development entity has been denied provincial or federal funding, for example.
These organizations should have clear goals and Council or the province or the feds should agree on what “success” in achieving these goals will look like. Instead, organizations entirely funded by government money are rating their own performances based on their own criteria and telling us what a great job they’re doing. It’s madness, I tell you.
And all of this could easily be arranged — all it would take would be the three levels of government attaching a few strings to the monies they grant these organizations.
More strings, please.
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