Why? Because It’s Business Cape Breton!

It’s Wednesday and you know what that means — time to beat the Business Cape Breton (BCB) drum!

This week we’ve learned that BCB is both an outside organization immune to the rules governing departments of the Cape Breton Regional Municipality AND the CBRM’s “economic development entity,” immune to the rules governing outside organizations.

Business Cape Breton logo

What does that look like, in practical terms? It looks like what happened during the CBRM budget sessions last week.

CBRM council agreed to provide BCB funding worth $288,000 for the 2017/18 fiscal year, although neither the federal government, via the Atlantic Canada Opportunities Agency (ACOA), nor the province has officially agreed to fund BCB in 2017/18.

CBRM CAO Michael Merritt admitted there was no word on BCB’s ACOA funding for 2016/17 yet, let alone funding for 2017/18. As for provincial funding, he told council the province had funded BCB in 2016/17, which is not really true (I’ll deal with that in a minute) and BCB has requested almost $224,000 from the province for the upcoming fiscal year.

BCB board chair Parker Rudderham was on hand to tell council he personally had “received a commitment from Municipal Affairs Minister Zach Churchill confirming the province’s funding.”

However, Department of Municipal Affairs spokesperson Sarah Gillis told me in an email Wednesday:

Minister Churchill did not commit provincial funding for Business Cape Breton in 2017/18. The Department of Municipal Affairs advised that the project funding is provided to the municipality and it is up to CBRM to determine how that funding is allocated.


Horrible Optics

At least two CBRM councilors were puzzled by the decision to fund BCB without matching federal or provincial funding.

District 2 Councilor Earlene MacMullin “questioned whether the CBRM’s financial commitment to Business Cape Breton is, as with other community groups, contingent on it successfully leveraging funds from other sources.”

CBRM CAO Michael Merritt replied that it is not. Why? Because BCB is the CBRM’s “economic development entity.”

I asked MacMullin by email on Tuesday if that answer had satisfied her and she told me:

The explanation given to me in regards to why BCB is granted funding when other levels of funding are not secured does not satisfy me…I do not fully understand the nature of our relationship. I know they are currently our economic development entity and provide services to potential new business[es] and entrepreneurship but they also take part in other CBRM activities such as logistics, the blossoming program, community improvement programs etc which I will admit is a little confusing to me.

District 8 Councilor Amanda McDougall said that statement left her “a bit gobsmacked,” according to the Cape Breton Post report:

We are very diligent with our community groups and organizations in saying, ‘yes, we will support you but you have to prove that you are going to get confirmation of funding from various levels of government.

I know we need economic development here but the optics of this is horrible in the public. This is taxpayer money, we can’t just make up rules for one organization over another.

McDougall told me by email on Wednesday:

I do not fully understand where we stand on overseeing the organization, or if we have any right to question their operations. I have ask the Clerk’s office for the following documents;

  • Financial Statements submitted to the CBRM from BCB
  • a copy of the contract or agreement that outlines the relationship between CBRM and BCB
  • Minutes from the meeting where council decided to make BCB the economic development arming the CBRM.

Once she receives them, she said, she will be better placed to comment on the relationship between the CBRM and BCB.



There’s no doubt BCB marches to a different drummer (I think it’s Keith Moon).

How different becomes crystal clear when you dive deeper into that “provincial” funding Merritt said BCB received in 2016/17.

In January 2017, the Department of Municipal Affairs came up with $225,000 to fund a revitalization plan for Glace Bay and area and “engaged” BCB (BCB’s term) to “manage” its development.  (Councilor McDougall, who said she was very excited to see the money going into the plan, said it was her understanding the province gave the money to the CBRM which in turn engaged BCB.)

According to the “tender package” I received from BCB, the organization is seeking a “qualified consultant or company” to devise a revitalization plan (if you’re thinking of applying, sorry, you’re too late — the RFP was posted on the BCB website on 21 January 2017 and bids closed on 8 February 2017.) Here’s the good part:

Projected range for project cost – $80,000 to $100,000 (inclusive of HST).

Which leaves $125,000 to $145,000.

I asked BCB how the remaining funds were to be spent and the Mystery Person who answers their emails said:

The remaining funds will cover costs applicable to Business Cape Breton’s implementation of the Glace Bay and Area Revitalization Plan project.

And there you have it.


Glace Bay represent

If I were District 9 Councilor George MacDonald and I saw $145,000 that could be going into something — anything! — in my district going instead to fund BCB’s operations, I would be hopping mad.

If I were a resident of District 9, I’d be hopping madder and I’d be asking why the CBRM didn’t just ask its newly minted economic development manager to engage a consultant and oversee the development of the revitalization plan?

Councilor McDougall bore down on that very point during Thursday’s budget session (which I missed thinking I could watch the video before I published this but the video  has yet to appear on the CBRM website) according to the Post:

McDougall suggested doing more economic development projects in-house, rather than using an outside organization, adding she doubts that this late in the fiscal year the ACOA money is forthcoming.

It makes sense. The CBRM’s economic development manager — oh, give him a name, call him John Phalen — is a CBRM employee. He, presumably, has a salary and an office and a desk and office supplies  (and if not, we’ll just have to start a GoFundMe campaign to build him a proper enclosure, like Little Bear). Any provincial or government funding he received could, therefore, go into economic development programs, rather than into office expenses and salaries, as is the case with BCB.

Moreover, as an employee of the CBRM, Phalen’s salary and expenses would be public knowledge and his work would, presumably, be subject to oversight by council.

Who could look at this and say, “Yeah, that makes sense, but I think we should stick to funneling taxpayers’ money into an opaque, quasi-public organization that sets its own priorities, judges its own work and makes its own spending and hiring decisions.”

Who, I mean, aside from the CBRM councilors whose votes indicate they thought precisely that?



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