So…What is the CBRM REN?

Now that Business Cape Breton (BCB) has been consigned to the ash heap of history, it’s time to meet the CBRM’s new sidekick in economic development — the Cape Breton Partnership.

Because it seems there is to be a Cape Breton Regional Municipality Regional Enterprise Network (REN) and the Cape Breton Partnership will be its “service provider”  — but it will be so much more than that, as you will see.

In terms of structure, the CBRM REN will look like the existing Cape Breton REN (CBREN) which, you may recall, Mayor Clarke pulled the municipality out of in 2016, opting to go it alone with BCB as our economic development arm instead (and losing out on provincial funding in the process).

The CBREN, which includes the Counties of Richmond, Inverness and Victoria, looks like this:

 

Liaison & Oversight

As it happens, CBRM Economic Development Manager John Phalen updated Council on the CBRM REN last night. [Full disclosure: I did not watch the meeting and am relying on the documents attached to the agenda which is, I will be the first to admit, a dangerous thing to do.]

Like the CBREN REN, our REN is also overseen by a Liaison & Oversight (L&O) Committee, which is made up of two CBRM councilors, two CBRM staffers and two representatives of the Department of Municipal Affairs (DMA):

Darren Bruckschwaiger (District 10 councilor)

Earlene MacMullin (District 2 councilor)

John Phalen (CBRM Economic Development Manager)

Jennifer Campbell (CBRM CFO)

Emily Pond (DMA)

Ron Dauphinee (DMA)

This committee has met twice and, I am happy to report, the minutes of those meetings have been posted online. Hurrah!

 

Staff

As you can see from the CBREN chart, the bottom rung consists of Cape Breton Partnership REN staff. According to the Partnership website, these number four — three economic development officers (one for each county) and a communications and meeting coordinator.

Presumably, additional staff will be hired to service the CBRM REN. Mayor Clarke actually had something interesting to say about that during his CBC interview — interesting, that is, given that he was BCB’s leading cheerleader and now seems to be criticizing the way the CBRM’s “economic development arm” operated. He told Steve Sutherland:

[S]pending dollars for the sake of just spending them and hiring people just because there’s money there isn’t a good use of dollars, either. So, we’re getting it right. I think, as we go forward, what we want is the dollars that we have for a REN to be focused on actual outcomes as opposed to creating too many positions in the process and just be funding positions rather than what we want as deliverables.

This seems to be a pretty direct criticism of BCB which spent the bulk of its funding on salaries, as you can see from these budgets (which also illustrate the agency’s incredible disappearing provincial and shrinking federal funding). Click on the image to enlarge:

 

I have yet to see any discussion of staff for the CBRM REN, but it will be interesting — as it always is — to see how many jobs are created and who gets them.

 

REN Board

The L&O Committee will oversee a six-member CBRM REN board. As Ron Dauphinee of the DMA explained in a letter to the L&O Committee:

In most cases, Boards of Directors are recruited from the general public. However, this is not the case with the CB REN or the CBRM REN, which have both elected to draw from the existing Board of their REN service provider, the Cape Breton Partnership.

WHY??????????

Why have we elected to ask members of a “private sector board” (not my words, CB Partnership President and CEO Carla Arsenault’s words) to oversee the spending of public money? Isn’t this precisely the problem we had with BCB?

I asked Arsenault how the CB Partnership board is chosen and she replied:

An external call for nominations goes out in August each year, and the interested candidate names are presented to the Governance Committee for review. The Governance Committee will nominate a slate of Director candidates for election at each annual meeting in October and the Board will elect Directors to fill vacancies.

And how is the Governance Committee chosen and who currently sits on it? Arsenault explained:

The Cape Breton Partnership’s Governance Committee is made up of members of the Executive, plus additional Directors from the Board who are chosen from a general call for volunteers to sit on the committee.

The most recent slate of members for the Governance Committee included: Alex Paul, Bill Kachafanas, Rob Wadden, Sandra Killam, Sean Coyle, Gordon MacInnis, Jim Wooder and Dan MacDonald.

Here’s the current Cape Breton Partnership board:

Alex Paul – Chair
Mi’kmaw Economic Benefits Office of Nova Scotia

Rob Wadden – Treasurer
Grant Thornton

Sandra Killam – Secretary
Seaside Wireless Communications Inc.

Allan Eddy
Port Hawkesbury Paper LP

Amanda Mombourquette
Strait Area Chamber of Commerce

Andrew Alkenbrack
Cabot Links

Beth Mason
Cape Breton University

Blaire Martell
Lobsters ‘R’ Us Seafood

Brian Purchase
Schwartz Furniture

Cheryl Smith
Celtic Music Interpretive Centre

Dan MacDonald
CBCL Ltd.

Fred Tilley
Nova Scotia Community College – Marconi Campus

James Wooder
JBW Consulting Inc.

Jennifer MacLeod
MacLeod Lorway

Jennifer Martin
Membertou First Nation

Osborne Burke
Victoria Co-op Fisheries Ltd.

Sean Coyle
Casino Nova Scotia

Sean Reid
Mulgrave Machine Works

Steve Parsons
Eskasoni Corporate Division

(The organization’s recognized agent is — of course — James Gogan of Breton Law Group.)

 

Interim Board

So once again, we’re looking at a private sector board overseeing the spending of public money — just like BCB. And just like BCB, many of the CB Partnership board members represent companies that tend to benefit from economic development spending.

Emily Pond, NS Department of Municipal Affairs, during 7 January 2019 L&O Committee meeting.

Emily Pond, NS Department of Municipal Affairs, during 7 January 2019 L&O Committee meeting.

Phalen told CBRM Council last night that the L&O Committee had selected an “interim” board to oversee CBRM REN activities for the rest of the 2018/19 fiscal year (i.e. until March, the board is apparently to be “reviewed at budget”). According to what Mayor Clarke told the CBC’s Steve Sutherland in a year-end interview, the board has $160,000 to play with for the next three months.

Arsenault apparently polled the CB Partnership board to see who would be willing to sit on the CBRM REN board and the lucky volunteers (who all live in the CBRM) are: Dan MacDonald, Rob Wadden, Sandra Killam, Jim Wooder, Fred Tilley and Brian Purchase.

Wadden’s firm, Grant Thornton, was just awarded a $191,198.30 provincially funded contract to conduct a “viability” study for the CBRM.

MacDonald’s engineering firm CBCL has been awarded any number of public contracts — including the $871,662 engineering services contract for Sydney’s second cruise ship berth, a project funded by all three levels of government.

Wooder is the project manager for Martin Chernin’s Harbour Royale Development Ltd, which has been tapped to develop the Sydney waterfront — an undertaking that includes a new, publicly funded, CBRM Central Library. Wooder also partners with Chernin in Sydport Terminals Ltd, a company formed to promote the idea of a container transshipment hub in the Port of Sydney.

Doesn’t putting these people in charge of a pile of public money give at least the appearance of multiple, potential conflicts of interest?

Apparently the chair of the CB Partnership board thought it did, because he wrote to the L&O Committee on January 7 about that very issue — Municipal Clerk Deborah Campbell-Ryan referenced the letter during the meeting, saying it addressed “any perceived conflict of interest” in the makeup of the board. Unfortunately, the letter was not attached to the agenda. I’ve requested a copy from the Clerk’s office.

(While on the subject of the REN board, it also struck me that one of the first projects Phalen — and the mayor — said the the municipality wants to tackle is encouraging the “creative economy.” There is arguably only one person on the CB Partnership board — Cheryl Smith of the Celtic Music Interpretive Centre — who is even involved in the creative economy and she is not on the board of the CBRM REN.)

Emily Pond stated during the L&O Committee meeting that the business plan for the CBRM REN will be drafted by the Cape Breton Partnership but that she assumed it would work closely with the CBRM as the municipality and the province are the only “shareholders” in the REN.

Although the outsized role to be played by the private sector in deciding how to spend public money frankly amazes me, at least we’ll have the Liaison & Oversight Committee to keep an eye on things, which certainly wasn’t the case with BCB. (That the committee is chaired by Councilor MacMullin is doubly comforting.)

I asked the Department of Municipal Affairs if the CBRM REN will be subject to FOIPOP requests. Given that it is funded entirely by public money and the L&O Committee is made up of bureaucrats and elected officials, it seemed to me it might meet the definition of a public body, which would be another improvement over BCB. But I may have been overly optimistic.

Krista Higdon, spokesperson for the DMA, told me in an email:

As the corporate structure for the CBRM REN has not been determined, and a number of the relevant legal documents have not been finalized, we are not in a position to advise as to the applicability of the various MGA provisions to that particular entity at this point in time.

In general, open meeting rules contained in the Municipal Government Act (MGA) do not apply to regional enterprise networks which means meetings are not public and minutes are not posted. If a public body is subject to the MGA, the freedom of information provisions contained in the MGA would apply. If a request for minutes was made through a FOIPOP request, the records would be evaluated to determine whether any severing might need to be applied in accordance with the Act.

That sounds to me like the REN board — like the BCB board before it — will not be accountable to the public. I was going to say, “One step forward, two steps back” but I’m not convinced it’s even a step forward.

 

 

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