More About RENs

While writing last week about the CBRM Regional Enterprise Network or CBRM REN it suddenly struck me that I didn’t know what I was talking about.

I didn’t really know what a Regional Enterprise Network was, so I decided I’d better educate myself. I began by looking up the existing Cape Breton REN in the Joint Stocks Registry, and under “Type of Business” I read: Municipal Government Act.

Helpful.

I then contacted the Department of Municipal Affairs (DMA) and Mark Peck, executive director of planning and advisory services, called me back and answered my REN questions. Peck and I don’t see eye to eye on all matters REN, as you’ll see, but as someone who is always trying to get answers from government, I have to say it was incredibly refreshing to skip the communications staff and have an actual conversation with someone involved in the decision making. Full points for that.

Also, and I’m admitting this reluctantly because it represents a serious research fail on my part, there is a Province of Nova Scotia web site dedicated to “Nova Scotia Regional Enterprise Networks” that gives you a lot of information about them. (Never say I don’t keep it real with you, dear readers.)

So, what is a REN?

 

Legal entity

Peck warned me from the outset that he’d first answer the question and then explain why the Cape Breton Regional Municipality REN was a little different, so we’ll begin with the basic answer.

The REN model was launched in Nova Scotia in 2013 (under Darrell Dexter’s NDP government) and but the first REN wasn’t established until 2014, under Stephen McNeil’s Liberals.

A REN is a “body corporate” — i.e. a corporation or legal entity — formed in accordance with Section 60 (“Municipality and village service agreements”) of the Nova Scotia Municipal Government Act (MGA):

Section 60 (1)  A municipality or a village may agree with one or more municipalities, villages, service commissions, the Government of the Province or of Canada or a department or agency of either of them or a band council pursuant to the Indian Act (Canada) to provide or administer municipal or village services.

The Cape Breton REN includes Inverness, Richmond and Victoria Counties, as I’ve been reporting, but it also includes Eskasoni, Membertou and We’koqma’q First Nations and the Province of Nova Scotia. As the website explains, each REN member contributes to its funding and those contributions are matched each fiscal year by the provincial government.

According to the website:

Each REN is governed by a board of directors, which represents the regional business community and develops the strategic plan. A local Liaison and Oversight Committee, representing all the funding partners, approves the strategic plan and oversees the board.

This connection to business is actually spelled out even more explicitly:

RENs are business-led and business-facing organizations.

What this means, of course, is that the aspect of the CBRM REN that got my hackles up — the fact that public money is being placed under the supervision of a private sector board — turns out to be not a bug but a feature (the key feature, in fact) of the REN system.

That’s…awkward.

Local businesspeople providing "regional leadership on economic priorities." (Source: CB Partnership https://capebretonpartnership.com/about/)

Local businesspeople providing “regional leadership on economic priorities.” (Source: CB Partnership)

 

Partners

All the work of the CBREN is carried out through a contractual arrangement with its service provider, the Cape Breton Partnership. The Partnership, said Peck, is responsible for “executing” the REN’s business plan, as set by the board. The CBRM REN will have a similar agreement.

But the CBREN board that sets the business plan is drawn from the Partnership board. The CBRM REN will also draw its board from the Partnership, as Ron Dauphinee of the Department of Municipal Affairs explained in a letter to the CBRM’s Liaison & Oversight [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.

The current board of the CBREN looks like this:

Blaire Martell (Chair)
Lobsters ‘R’ Us Seafood
Sean Coyle
Casino Nova Scotia
Osborne Burke
Victoria Co-op Fisheries Ltd.
Scott MacNeil

Martell, Coyle and Burke all sit on the Cape Breton Partnership board — MacNeil does not.  I’m not exactly sure how the REN board selection process works, but it seems that it is not simply a matter of picking members of the Partnership board to serve on the REN board (although it is mostly that and in the case of the CBRM’s “interim” board — which is to be reviewed at the end of the fiscal year — it was exactly that. All the CBRM REN board members serve on the Partnership board).

The Partnership is also the direct recipient of the provincial share of REN funding — as in, the money is delivered directly to the Cape Breton Partnership (which is identified in the Public Accounts as both the Cape Breton Partnership and the Cape Breton Business Partnership Inc — its official name).

As an organization, the Cape Breton Partnership actually pre-dates the REN system — I went through the Public Accounts and found references to it stretching back to 2011. Keep in mind as you look at this table that the REN system didn’t officially kick in until 2014. But I think it’s worth including all the public, provincial money this avowedly private sector organization has been granted since 2011:

AgencyDepartment201120122013201420152016201720182011-2018 Totals
Totals$138,408$1,534,742.11$1,084,107.64$1,153,167.58$1,339,038.84$1,137,414.14$1,812,371.37$1,377.945.10$9,081,078.78
Cape Breton Business Partnership, IncEconomic and Rural Development and Tourism$7,322.50 $85,107.50 $112,940.19 $217,946.43 $423,316.62
Labour and Advanced Education$802,492.11 $999,000.14 $1,034,941.39 $1,011,975.55 $975,137.64 $1,758,243.27$1,302,945.10$7,922,235.20
$37,500.00
Community Services$109,116.86 $92,501.50 $201,618.36
Business$21,775.00 $54,128.10 $75,903.10
Communities Culture & Heritage$48,000.00 $37,500$85,500
Cape Breton PartnershipDepartment of Economic and Rural Development$11,029.00 $11,029.00
Department of Labour and Workforce Development$127,379.00 $127,379.00
Department of Economic and Rural Development and Tourism$5,286.00 $5,286.00
Department of Communities, Culture and Heritage$66,000.00 $66,000.00
Department of Labour and Advanced Education
$162,811.50 $162,811.50

 

Little Miss Different

Peck calls the organization the CBRM is in the process of forming (it has yet to be incorporated or listed in the Joint Stocks Registry) “REN-like” because it is not based on an intermunicipal agreement and will instead include the municipality and the province (no mention of First Nations that I’ve seen).

Peck said that although the CBRM REN is “really in the infancy stages” right now it is,  in his opinion, ” kind of a good news story.”

To have economic development in Cape Breton under one umbrella, of the Partnership, I really think it’s a positive first step.

Even I, an avowed regional development skeptic, can see some truth in that. It reminded me of that paper I quoted some weeks ago — “From carboniferous capitalism to call centres: the case of Cape Breton” — published in 2006 by Professor Ray Hudson, a political-economic geographer from Durham University in England. Hudson referenced a 1995 survey of “agencies ostensibly mandated to restore” Cape Breton’s economy which discovered that:

…no fewer than 65 agencies (entities) were seeking to do this. Essentially “saving the island’s economy” had become a sector and quite an active one.

Bringing the number of agencies engaged in regional economic development in Cape Breton from 65 to one does count as a “positive first step.” But it hands an awful lot of responsibility — not to mention money — to that one agency.

 

Conflict of interest?

My concern (expressed last week) was that the businesspeople sitting on the CBRM REN board, overseeing the spending of thousands of public dollars, have an obvious conflict of interest, whether real or perceived.

Peck doesn’t see it that way:

I think what’s really important when it comes to economic development is …and I can’t quote from the One Nova Scotia Report, but it was like, “Let business do business.” And these private sector-run boards of directors, they’re the ones that are in the trenches in terms of the day-to-day activities with economic development. They know the business, you know, be it right, be it wrong, probably better than…council.

So the position is, let business run business. And that…is the philosophy with the RENS, having private sector boards provide the economic development direction for economic development within a region….Look, we all know how councils can be when they come together, they’re more about what’s within their boundaries, whereas the private sector board…looks at things within a region, not necessarily kind of what’s in my backyard, so to speak. Which is really important for economic development. So it’s business decisions, not necessarily political decisions.

My problem with that, obviously, is that we’re “letting business do business” with public money.

It’s also worth noting that the REN Start-Up Guide published by the provincial government in 2014 had a much more expansive notion of “economic development” than that expressed in the phrase “let business do business”:

Economic growth is just one aspect of economic development. Economic developers may also focus on other aspects, such as infrastructure, transportation, sector development, environmentalism, urban planning, education, literacy, health, safety, and social inclusion, all of which are needed for a healthy economy, or “eco-system.”

Because of its varied nature, economic development – by its very definition – depends on many partnerships, such as with different levels of government, the private sector, not-for-profit organizations, and the community at large.

Why couldn’t the CBRM REN board include a representative of an environmental NGO, a literacy specialist, a health specialist, a transport specialist, a social inclusion specialist, a food security expert? No reason, really, except that we’ve decided to draw our REN board from the CB Partnership board which includes none of the above.

And Peck’s contention that it is reasonable to replace parochial municipal councils with regionally-minded private sector boards sounds more than a little dangerous to me.

It was at this point that I remembered that Peck was not sharing his own personal thoughts on the best way to deliver economic development funding but explaining the system our present government has put in place. And our present government, as CBU Political Science Professor Tom Urbaniak pointed out in a recent column about the lack of transparency afflicting many boards and agencies in Nova Scotia, isn’t really a big fan of democratically elected bodies:

Earlier this year, the government of Nova Scotia eliminated the elected regional school boards…McNeil and Education Minister Zach Churchill assured Nova Scotians that a new, appointed Provincial Advisory Council on Education would do better than the regional boards in representing the concerns of citizens.

In the same way, presumably, that self-selecting, private-sector boards, unaccountable to the public, are better at spending regional economic development money.

Peck told me that he would imagine that if a board member had a conflict — say, for example, they worked for a consultancy that would be likely to bid for a contract the REN was contemplating — they would recuse themselves from any discussion or decision-making on said contract. “[N]o different than municipal council,” said Peck.

But it is very different than municipal council, which brings me to the crux of this matter.

 

Transparency

The only way I would know the consultant in the example above had declared a conflict of interest and recused himself from such a discussion would be if the meeting at which the recusal occurred had been open to the public or the minutes from the meeting had been published — “no different than municipal council.”

But REN board meetings are not open to the public and the minutes of those meetings are not published. Moreover, it’s not even clear that REN boards are subject to access to information requests — the last resort for a member of the public seeking information about a public body.

This is the heart of the matter: RENs are entirely publicly funded and the price of “doing business” with public funds should be transparency.

Transparency, in fact, was the subject of that article by Professor Urbaniak I cited earlier and his key argument, I think, applies to REN boards:

As a citizen, I want to know that I can observe if I wish. As an educator, I want to be able to tell my political science students that they can sit in on a meeting of a public board that is deliberating on public affairs. They should be able to hear the debate, not just the decision after the fact.

Scrutiny and potential scrutiny keep people accountable.

Urbaniak suggests Nova Scotia adopt an Open Meetings Act, which could be accomplished by means of ” short bill would amend the Municipal Government Act, the Education Act, the Public Libraries Act, the Nova Scotia Health Authority Act and other statutes.”

Now you may tell me that, strictly speaking, a REN is not a public body, even though it is a legal entity made up of and receiving all its funding from governments.

Nova Scotia’s Freedom of Information and Protection of Privacy Act (FOIPOP) applies to “all provincial government departments, agencies, boards, commissions, universities and community colleges” while the MGA, which oversees municipal access to information, applies to “all municipal governments in the province and their departments and utilities.” It’s possible RENs slip neatly between those cracks. (It’s possible they’re meant to.)

But as the Right to Know Coalition of Nova Scotia has pointed out time and again, other jurisdictions have adopted more wide-ranging definitions of public bodies, there’s no reason why we couldn’t do the same. Consider principle number three of the Right to Know movement’s 10 guiding principles:

3. The right applies to all public bodies The public has a right to receive information in the possession of any institution funded by the public and private bodies performing public functions [emphasis mine], such as water and electricity providers.

In fact, I’d argue that in one way we already have defined public body in such a way as to capture entities like the RENs (and the Cape Breton Partnership, for that matter). I refer you to the definition of “public sector body” found in the Public Disclosure of Compensation in the Public Sector Act:

(f) “public sector body” means

(i) a member of the Government Reporting Entity, as defined in the Finance Act,
(ii) a person, organization or body designated as a public sector body by the regulations, and
(iii) any other person, organization or body, whether or not incorporated, that does not carry on its activities for the purpose of profit and receives in a fiscal year from one or more other public sector bodies funding that totals at least five hundred thousand dollars or, where the funding is fifty per cent or more of its total revenue for the fiscal year, at least two hundred thousand dollars. [emphasis mine]

But while we’re waiting for Nova Scotia’s privacy laws to catch up to reality, Urbaniak suggests there’s:

…nothing to stop public bodies themselves from passing by-laws or resolutions to ensure that, with a few exceptions, their meetings are open to public observation.

The CBRM REN has yet to be incorporated, maybe there’s still time to make it more representative of and accountable to the people whose money it spends.

 

 

 

 

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