My favorite quasi-public organization, Business Cape Breton (BCB), was on the CBRM Council agenda last night.
Seems BCB is broke — it needs another $34,000 to see it through to the end of March.
It’s difficult to understand exactly what is going on here because CAO Marie Walsh was very guarded in her remarks and Mayor Cecil Clarke, who usually can’t wait to “clarify” things for council, was strangely reticent, but it seems that in deciding, of his own accord, to withdraw the CBRM from Regional Enterprise Network (REN) 6 in 2016, Cecil Clarke lost us thousands of dollars in provincial economic development funding.
In case you’ve forgotten how that all went down, here’s a reminder from a previous Spectator report:
[In June 2016] Mayor Clarke surprised CBRM Regional Council with the news the CBRM had withdrawn from Regional Enterprise Network (REN) 6, a provincially designated economic development region encompassing the CBRM plus Richmond, Inverness and Victoria Counties and served by two development organizations, Business Cape Breton (BCB) and the Cape Breton Partnership.
…Clarke made that decision to withdraw unilaterally, telling members of the REN’s Liaison & Oversight Committee at their 26 May 2016 meeting that the CBRM was taking its flower baskets…and going home. Although, strictly speaking, a municipality wishing to withdraw from the REN should have given a year’s notice, the committee bent the rules and allowed Clarke to pull the CBRM out and CBRM Council rubber-stamped this after the fact, agreeing to designate BCB as the CBRM’s “economic development arm.”
Clarke, as you can see in the clip below, said that there were a number of reasons for withdrawing from the REN, but the only one he named was HST. He also claimed that in the existing REN, BCB served the CBRM while the Cape Breton Partnership served the other municipalities, which wasn’t actually true, both organizations served all REN members.
Clarke’s proposal was that the province should treat the CBRM as a separate REN but the province, as the Spectator reported, declined to do so.
The upshoot of it all, apparently, was that the CBRM lost thousands of dollars in provincial economic development funding. You can see it in BCB’s 2016/17 financial statements (thank you, faithful Spectator readers, you know who you are). The organization received its full funding — $529,266 — from the municipality that year, with a big blank where the “Province of Nova Scotia” contribution should be.
Source: BCB 2017 reports
But what happened in 2017/18? I got the impression the province withheld money last year too — Walsh said BCB did not receive its full funding for 2017/18 which is, I guess, why it is currently broke. Is it possible the province has withheld funding for two years? I will have to sort this out and get back to you.
‘Deliverables’
The reason all of this is back on the agenda is that Municipal Affairs Minister Derek Mombourquette brought it up in a recent letter to the CBRM. The letter will require more parsing than I have time for right now, so for the moment, I’ll just note that Mombourquette promised the CBRM $224,000 in return for a number of “deliverables” one of which was:
Establish CBRM in the Regional Enterprise Network program in order to secure funding for economic development initiatives for the 2018/19 fiscal year. This will ensure that there can be continued transparent and accountable economic development funding provided to the municipality.
What that says to me is that the province does not consider the CBRM’s current setup, which sees it funneling economic development money through BCB, an organization that is not open to public scrutiny, “transparent and accountable.”
But I’m very confused as to what happens next. When District 7 Councilor Ivan Doncaster asked Walsh if we were “rejoining” the REN, she said:
We are putting forward a proposal as was discussed in the budget workshops that they will be sending us terms of reference on what constitutes being eligible to be part of the REN. So we have no approved funding for next year in our budget we will have our portion of the funding hoping that we will get matched funding from the province.
Does this mean we become a REN or we rejoin REN6? Mayor Clarke seems to think it’s the former. He wrapped up discussions on the agenda item saying:
I think an important thing that the minister was able to do, which was not the case going into this year, is the minister has clearly said that the CBRM is an economic region and should be recognized as an economic region, whereas that was not the case of the department before that, and the department as of when the last budget would have come through.
But lost in that answer is the fact that by deciding, all by himself, that the CBRM was a separate economic region, our mayor cost us thousands of dollars — and that loss is entirely on him. He made the decision to withdraw from the REN without consulting council or the province or anyone. I don’t think he should be allowed to gloss over that.
Clarke also spoke of the roles to be played by both BCB and the Cape Breton Partnership in servicing the CBRM in future and said not a word about the resulting HST costs. Go figure.
As for BCB, the CBRM will, as Walsh put it, “keep them whole” through the end of March, paying them $34,000 from that $244,000 to “facilitate” an economic review (another of the minister’s “deliverables”). After that, Walsh said council can decide how it wants to proceed as far as economic development funding is concerned.
There is much more to discuss here — District 4 Councilor Earlene MacMullin moved that the CBRM request a full provincial audit of the CBRM financials and that motion passed unanimously. The point is to show the province, once and for all, just how financially strapped the municipality is, but might it not also shine a light on some of the more obscure corners of the books? Like, the corner where BCB is hiding? I certainly hope so.
Council_Feb27_BCB_001
