The Best-Laid Strategic Plans of Mice and Men…

The executive of the Port of Sydney Development Corporation (PSDC) board has quit and I have to thank them for making that information public because if they hadn’t told us, we probably wouldn’t have noticed until next year’s AGM.

The executive — chair Lucia MacIsaac, vice-chair John Khattar, treasurer John Anderson and secretary Owen Fitzgerald — blamed their resignations on the failure of CBRM council (the sole “member” of the PSDC which is incorporated as a Nova Scotia Limited by Guarantee Company) to approve their “strategic plan” in its entirety, a failure they viewed as a vote of non-confidence.

As the CBC’s Tom Ayers reported:

At the port AGM last week, the board sought to extend its mandate to cover the rest of the port and infrastructure, but several councillors and the mayor voted unanimously to accept only those parts of the proposed strategic plan that form part of the board’s existing articles of incorporation or projects that are already approved and underway.

During Monday’s irregular regular monthly council meeting, regional solicitor Demetri Kachafanas presented a memo outlining his concerns with the changes the board had requested, breaking them down into “substantive” and “non-substantive” issues.

I want to touch briefly on two non-substantive changes:

Article 4.08 — changing the number of meetings from two to one.

Initially, the corporation (not to be confused with the board, which meets more frequently) had one meeting — its Annual General Meeting (AGM) — but this was changed in 2017 to two meetings and council was told it was to bring the corporation’s Articles of Association in line with changes to the Nova Scotia Companies Act.

5.08 – Currently director can be removed by special resolution which requires 2/3 majority vote of the members. The change requested changes this to a simple majority vote of the members.

The 2/3 majority vote for a special resolution was introduced in 2017 (replacing the 3/4 majority vote) and, again, council was told the change was necessary to bring the Articles in line with the Companies Act.

Has the Companies Act changed again? If not, are these “non-substantive changes” legal? I think council might want to look into that.


Back to the Future

The main change I want to discuss, though, is one Kachafanas labeled a “substantive change” — one pertaining to the PSDC’s mandate.

The port board wants to modify Article 1.03(e) of the Articles of Association, prompting Kachafanas to write:

Deleting reference to the Cruise Pavilion and wharf and adding the expanded definition of the Port would expand the operation of the Board beyond the current mandate of operations surrounding cruise ships, the wharf and second berth. If Council does not want to expand the mandate of the Port of Sydney Development Corporation then I do not recommend a change to this Article.

What Kachafanas didn’t note was that Article 1.03(e) wasn’t actually in the original Articles of Association of the PSDC, as they were drafted in 2015:



Article 1.03(e) was added just before the arm’s length port board took over from the interim port board in 2017:


The change was one of a number of amendments Jim Gogan, in his role as international man of mystery solicitor for the Port of Sydney, brought to a nominating committee meeting on 24 January 2017 and presented to council later that same day. As I reported at the time:

The councilors on the nominating committee — Kendra Coombes (District 11), Darren Bruckschwaiger (District 10), Amanda McDougall (District 8), Ray Paruch (District 6) and Earlene MacMullin (District 2) — indicated they’d been notified they’d be discussing changes to the articles but, as usual in our municipality where everything moves at the speed of light and decisions must be made yesterday, they’d received the details hours before the meeting.

Watching the videos of both meetings, what jumps out at you is that Gogan never really explains why these changes are necessary. During the nominating committee meeting, Paruch, in reference to some particular power that was being stripped from the board, actually asked Gogan the relevant question:

Why was it in and now why is it out?

Gogan replied:

[T]hese changes were brought about as a result of limiting the scope of the mandate of the corporation to the operation of the cruise terminal pavilion and the wharf…the original scope of the Memorandum was much broader, it talked about any economic development in or around the harbor itself, which would have then included the discussion around a proposed potential bulk handling facility, a container terminal, any of these types of operations were originally envisioned to be brought under the scope of this corporation. Now it’s been narrowed down so those economic development activities stay within, wholly within, the CBRM…Something I believe flowed back through Council and ultimately to the board of directors that these larger economic development issues were seen to be issues that involved all of the council as a whole and needed to be addressed at council…

You’ve got to admit, that’s smooth. “I know you just complained a minute ago that you were taken completely by surprise by these changes, but really, they were your idea. We’re just doing what you wanted.” Gogan liked the sound of this so much he repeated during the actual council meeting:

Now that we’re moving towards the external board, it was discussed and it principally came about as a discussion, I believe, that took place in this council that perhaps that mandate should be scoped and reduced in scope and that the economic development portion of the mandate of the original corporation be brought back to the municipality…

It’s smooth, but with all due respect, it’s also hooey.


Institutional amnesia

The plan to establish the PSDC and second Marlene Usher from ACOA to head it was seemingly cooked up over the course of 23 in camera council meetings from 7 January 2014 to 3 February 2015. After that February 3 meeting, council went into public session just long enough to approve the governance model for the new corporation and the secondment of Usher. Both motions passed unanimously without any public discussion.

But a few days later, during the regular monthly council meeting on February 17, Usher and Gogan appeared before council to deliver their Port Governance report. Here’s how they introduced it:

Our involvement with the establishment of a new corporate entity mandated with the broad economic development of the Sydney Harbour and surrounding municipally owned lands, dates back to mid year 2014. The proposed divestiture of Sydney Harbour Seabed from Transport Canada to CBRM formed the genesis for consideration of establishment of a new governing entity. The intention behind the establishment of a new harbour authority corporation was to broaden the current mandate which exists with the Sydney Ports Corporation (SPC) to a larger economic model encompassing intermodal transportation issues relating to Sydney Harbour development, appropriate land use development, contemplated establishment of a municipal land bank, and a more traditional coordinated harbour development strategy.

The WHOLE POINT of the PSDC was to establish an arm’s length corporation with a broader mandate than the old SPC. Otherwise, why establish it?

This isn’t ancient history — this happened FOUR YEARS AGO.

I’m sorry, I’m yelling. But for the love of god, people, have we no institutional memory?

Never mind, I know the answer to that — and so did Gogan (whom I’m starting to think of as part of the CBRM’s low-rent Deep State). He knew nobody would remember why they’d originally decided to establish the PSDC. He knew that two years after selling council on a “new corporate entity mandated with the broad economic development of the Sydney Harbour” he could come back arguing the “economic development” mandate belonged with the CBRM and not only would council buy it, they’d think it was their idea.

(They didn’t even stop to wonder why, with a mandate reduced to managing the cruise pavilion and marine terminal — both of which already had managers — the PSDC still needed a $200,000 a year CEO.)

In council’s defense, though, what Gogan sold them on and what he delivered were two different things. Thanks to a “notwithstanding clause” in the articles, the port was run for two years by “interim” board consisting of the mayor and four councilors and chaired by the CBRM’s CAO. They promised to put a permanent board in place by 2016 but didn’t deliver until 2017, by which time council was quite sick of the arrangement.

And you have only to consider some of the port “developments” that took place on the interim board’s watch to remember why: the sale of Archibald’s Wharf (final approval 15 May 2015), the decision to hire Albert Barbusci as our “exclusive” port promoter/developer (16 June 2015), the decision to buy Sydport land to lease to McKeil Marine (16 June 2015), the expenditure of thousands of dollars on consultants’ reports and trips to China.

What Gogan was really saying to council in 2017 was that a PSDC with a broad mandate was fine, as long as it was controlled by a clique of elected officials, but it would never do to give that kind of power to an independent board.


Port Board 2.0

You probably think I’m building up to a rousing defense of the current, independent port board.

I’m not.

The independent port board sounded good in theory — it would be made up of citizens, they would bring relevant skills to the table, it would be transparent and accountable to the public — but in practice it’s been a disappointment.

The board not only doesn’t meet publicly, it voted during its very first meeting not to publish its minutes, making it less transparent than the interim board, an achievement I would not have thought possible.

I do not think it should be allowed to appoint its own directors, another requested “substantive” change, and I’m bummed that it seems to be no more critical of cruise industry statistics than anyone else at the port is.

As for this strategic plan causing everyone such headaches, it was supposed to have been presented, along with a risk assessment, during the PSDC’s December 2017 AGM, but it wasn’t ready in time.



Instead, Port of Sydney CEO Marlene Usher presented both to council on 10 July 2018, (although the departing port executive says council had it in May 2018) explaining that if council adopted the plan as presented, it would also be necessary to amend the PSDC’s Memorandum of Association and Articles of Association (or the constating documents as Gogan and I like to call them) to expand the definition of the “Port of Sydney” beyond the cruise pavilion and marine terminal. The definition the board recommended was:

For the purposes herein, the “Port of Sydney” means the Sydney Harbour and associated infrastructure as well any operations collateral or incidental to the development of Sydney Harbour.

As I reported at the time:

Asked by District 7 Councilor Ivan Doncaster if this meant the board would once again control the greenfield site, Usher demurred, saying the board would simply “advocate” on behalf of harbor development.

That advocacy will include trying to get private businesses to offer services like treatment of international waste (a prerequisite for getting Andrew Prossin’s One Ocean Expeditions operation based here, and one that is much more complicated than it sounds, as the Spectator explained here and here) and providing fuel.

It will also include “advocating” on behalf of both container terminal…and the rail line.

The plan itself is just the independent board looking for permission to do all the fun stuff the interim board got to do like, pretending the harbor is ice free and that our “foreign trade zone designation” means something.  I particularly like the idea of this ultra-secretive board planning to:

Develop and implement a defined process for community outreach to increase transparency.

Let me help you with that: PUBLISH YOUR MINUTES.

Council wasn’t sure about any of this and decided that instead of approving the plan it would call for a staff Issue Paper on the subject. CAO Marie Walsh said they’d “shoot for August” but would definitely have something for council by September.

This does not seem to have happened. (I checked with the Municipal Clerk’s Office to be sure, but have yet to hear back).

Instead, September 2018 found District 2 Councilor Earlene MacMullin calling for a “full briefing” for council on the port file which she was in the dark about because it was difficult to get information from the new, transparent port board. The only one who seemed to know what was going on was the mayor, who was in hot pursuit of the provincial PC leadership. The meeting ultimately didn’t take place and Clarke failed in his bid for the PC leadership, so in December 2018, as I noted on my port development timeline:

A laundry list of subjects is presented to Council for discussion in future Council meetings. The list includes consideration of the Port of Sydney Development Corporation’s strategic plan. Clarke suggests they include MacMullin’s earlier requested port update in the meeting and council agrees.

I stand to be corrected, but I don’t recall this discussion ever taking place.

And now, almost a year later, the PSDC has again held an AGM (on October 29) and its member, the CBRM council, refused to approve those parts of its strategic plan that require the expansion of its mandate, which is exactly the same discussion council had in July 2018.

This is history repeating itself as it does in the CBRM — first as farce, then again as farce.

Maybe it’s time to re-instate the SPC.