Council: Port Mandates and Harbour Bottoms

During its May 26 session, the Cape Breton Regional Municipal council approved the Port of Sydney Development Corporation’s “Strategic Plan” and some “non-substantive changes” to its Articles of Association (which, fortunately, were written originally in pencil).

Before we discuss the latest developments, a brief history of the Articles of Association of the Port of Sydney Development Corporation (PSDC) is probably necessary (believe me, I’m sorry too.)


Articles of Association 1.0

The originals were concocted by Jim Gogan of Breton Law Group and Marlene Usher who presented them to council in draft form on 17 February 2015. Council had voted a couple of weeks earlier to second Usher from ACOA to head the new port corporation (which came as something of a surprise to the board of the old port corporation.) Explaining how they had come to be in charge of creating the PSDC’s constating documents, Gogan and Usher wrote:

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 establishing a new governing entity. The intention behind the establishment of a new harbour authority corporation was to broaden the current mandate which exists within 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 municipal land bank, and a more traditional coordinated harbour development strategy.

Remember these two points:

  • the creation of the Port of Sydney Development Corporation was predicated on discussions around the divestiture of the Sydney Harbour seabed;
  • the whole point of replacing the existing Sydney Ports Corporation, which looked after the cruise pavilion and marine terminal, was that the new entity would have a “broader mandate.”

(What’s not said here, but what I’ve read elsewhere, is that the CBRM also wanted to replace the old SPC because it was too independent and tended to view the CBRM merely as a landlord. But surely there were less complicated ways to deal with this — like, by altering the terms of their lease?)

The PSDC was incorporated on April Fool’s Day 2015 and for two years was overseen by an “interim” board, consisting of Mayor Cecil Clarke, Deputy Mayor George MacDonald and Councilors Clarence Prince, Kevin Saccary and Jim MacLeod. CAO Michael Merritt (ahh, remember him?), an ex officio board member, served as non-voting chair.


Articles of Association 2.0

At a meeting of the CBRM nominating committee on 24 January 2017, Gogan appeared to discuss proposed changes to the Articles of Association of the PSDC.

Watch the video of the meeting and you’ll hear more than one councilor note that they’d received Gogan’s proposed changes just hours before the meeting. You’ll also note that Gogan talks about the original Articles of Association as though he hadn’t written them and Mayor Cecil Clarke talks about the “port board” as though he wasn’t sitting on it.

The changes, Clarke notes, had been “recommended and approved” by the interim board in preparation for the arrival, on April Fool’s Day 2017, of the permanent board. Gogan explains that most of the changes are mere “housekeeping” items but they do propose “refining the scope and some of the functions of the corporation.”

By which he meant, narrowing its focus back down to the cruise pavilion and the marine terminal and returning responsibility for the broader harbor (and the container terminal project) to the CBRM.

It would have been very interesting to hear Gogan’s rationale for this change, given the PSDC had been incorporated precisely to fulfill the broader mandate he was now proposing to strip from it, but nobody asked him to elaborate. (I mean really, it’s like going through all the pain and expense of hair plugs and then shaving your head.)

Council would subsequently vote to reduce the mandate of the corporation, leaving the PSDC — with its $200,000/year CEO and nine-member public board — with the same mandate as the Sydney Ports Corporation it had replaced.


Articles of Association 3.0

At the 10 July 2018 CBRM regional council meeting, Usher presented the PSDC’s Strategic Plan  for 2018-2020 and made a play to broaden the PSDC’s mandate:

Adoption of the strategic plan goes hand in hand with the request to amend the Memorandum of Association (MOA) and Articles of Incorporation. The current definition of the “Port of Sydney”…is an impediment to the delivery and implementation of the Board’s new strategic plan. In the current articles the Port of Sydney is defined to include activities that relate to the Joan Harriss Cruise Pavilion. This definition has dramatically diminished the mandate compared to the definition of the “Port of Sydney” in the original articles dated 2015.

Under questioning from council, Usher said the expanded mandate would not see the PSDC taking over management of the greenfield site, instead it would “advocate” on behalf of harbor development. Council balked at this and instead of approving the plan and broadening the corporation’s mandate, it called for a staff issue paper on the subject.

As you may recall, however, 2018 was the year the mayor was pursuing the leadership of the provincial Progressive Conservative Party, an endeavor that necessitated the sidelining of any number of issues, including this one. Clarke lost the leadership to Tim Houston in late October and returned to the CBRM ready to tie up all manner of loose ends, including the port plan. During a December 2018 meeting he suggested council combine consideration of the plan with the “full review” of all matters related to the port that had been requested by District 2 Councilor Earlene MacMullin months earlier.

And then…crickets.

Until the PSDC held its annual AGM in October 2019 and and its “member,” the CBRM council, refused to approve those parts of its strategic plan that required the expansion of its mandate — in other words, everyone found themselves in precisely the same situation they’d been in over a year before, in July 2018.

In response, the executive of the port board quit en masse. (I’d feel sorry for them, I really would, except their first act as board was to vote NOT to publish the minutes of their meetings, from which point, they were dead to me.)

During a special council meeting on 4 November 2019, Regional Solicitor Demetri Kachafanas presented a “detailed report” on the requested changes to the Articles of Association, dividing them into “substantive” and “non-substantive.” The report was “for information only.” The meeting minutes conclude:

Mayor Clarke noted that the existing Articles of Association are in place and the non-substantive items as well as the details on the location of AGM meetings [it was suggested they be held in CBRM council chambers] will be brought forward as requested.


Articles of Association 4.0

During the CBRM council meeting on May 26, those “non-substantive” items were brought forward, as was the PSDC’s Strategic Plan — now simply dated “2020.”

Watch the video, the discussion of this item starts at 2:56:45 and ends at 3:00:54 with council setting some sort of municipal land-speed record by approving the non-substantive changes to the Articles of Association and the PSDC’s Strategic Plan in just over 4 minutes.

The strategic plan has been — sort of — updated. It looks forward to 2021 and 2022 and states:

Cruise traffic projections over the next few years are difficult to accurately predict as the industry is quite cyclical. There are several factors which could impact cruise line decisions in planning itineraries. For the years 2021 and 2022 projections indicated that the industry in Sydney will remain strong.

Nowhere does this “updated” plan mention the virus that has canceled the 2020 cruise season and “decimated” the Port’s profits and that threatens to be with us for the 2021 season if not the 2022 season, so that’s…strategic.

(On the bright side: navigational aids are back on the agenda, you can read the history of the navigational aids here.)

But the most interesting change relates to the other point I told you to remember at the outset of this article — that it was the  “proposed divestiture of Sydney Harbour Seabed from Transport Canada to CBRM formed the genesis for consideration of establishing a new governing entity.” In an email accompanying the new plan, dated 20 May 2020, Usher tells Kachafanas:

Demitri [sic], see the most recent strategic plan, no mention of Harbour bottom…

Harbour bottom acquisition – this has been removed from the strategic plan.

And indeed, it has been. Here are the “Strengths and Opportunities” from the 2018-2020 plan:

And here are the “Strengths and Opportunities” from the 2020 version:



Soggy bottom

To understand how strange this is, you have to understand that ownership of the harbor bottom has been cited as key to Sydney’s container port project for years now, since at least 2007, when the Sydney Ports Master Plan called for the dredging of the harbor, the addition of a second cruise berth and the construction of a container terminal on a “greenfield” site at Sydport noting (rather insouciently in retrospect):

The federal divestiture is continuing as the federal ownership of the bottom of the harbour, collection of harbour dues and employment of Harbour masters in both Sydney and North Sydney is expected to be discontinued and transfer to a local entity.

Port consultant Neil MacNeil, who was hired by Eileen Lannon Oldford of the Cape Breton County Economic Development Agency (CBCEDA) and paid $100,000 over three contracts in 2013-14, advised the CBRM to secure ownership of the harbour bottom before doing any “port promotion.” (Mind you, MacNeil also crapped all over the entire container terminal plan causing the mayor and Lannon Oldford to hide his report from the public for seven months before finally stamping it “rejected” and posting it to the municipal website.)

On the subject of the divestiture, MacNeil had written:

October and November [2013] were spent in negotiations with Transport Canada to discuss divestiture and to inform them that they did not have a valid offer from CBRM to pay $4.3 million to purchase the harbour bottom. Following the CAO’s letter to rescind the offer, Transport Canada requested that CBRM proceed through the normal process of divesting surplus property. Following meetings with the Minister of Transport in January 2014, it was agreed that a transfer would be negotiated with the Province of Nova Scotia for a nominal value, i.e. one dollar. The Province would then transfer the harbour bed to CBRM, also for a nominal value.

But the process did not go smoothly.

MacNeil reported that in February 2014, Transport Canada officials in Moncton were instructed by Ottawa to step back from the negotiations and CBRM discovered that the federal government had been looking to carve out a chunk of the harbor bottom for Marine Atlantic, meaning the company would no longer need to pay harbor dues. (It accounts for 40% of those collected in Sydney harbour). This was considered very bad news by the municipality, although I haven’t read anything, anywhere that suggests the feds were seriously considering allowing the CBRM’s new port entity to charge harbor dues, a privilege reserved for Port Authorities.

Anyway, negotiations apparently got underway again because in October 2014 — they stalled.

At a “special” council meeting on 7 October 2014, Jim Gogan of Breton Law Group (who had, like MacNeil, been hired through CBCEDA to work on the port file and who was now, according to the CBC “keeping track of negotiations with Transport Canada”) told  council they had hit a snag because the Kwilmu’kw Maw-klusuaqn Negotiation Office (KMKNO), the organization representing 12 Nova Scotian First Nations, had complained it had not been adequately consulted on the transfer.



Mayor Clarke was not happy with this, especially after Premier Stephen McNeil wrote to Transport Minister Lisa Raitt “reminding them of the duty and responsibility to consult” with KMK on the matter. By 15 September 2015, though, council was being asked to approve “the agreements reached in Phase 1 and II of the Aboriginal Consultation Process” related to harbour divestiture.

And roughly two-and-a-half years later, at end-March 2018, the Port of Sydney was reporting it had paid the Breton Law Group firm $149,000 for:

…ongoing legal work regarding all aspects of the project including exclusivity agreement and further legal documents as well as other port work such as harbor divestiture issues and FOIPOP.

Or “keeping track of the negotiations with Transport Canada” if you prefer.

And there, the trail basically goes cold until the harbour bottom appears in that email from Usher to Kachafanas but does not even rate a mention during council’s 4-minute discussion of port issues during last week’s meeting.

I asked Transport Canada what about the status of negotiations over ownership of the Sydney harbor bottom and was told:

Transport Canada has been having discussions with the Province of Nova Scotia on the potential transfer of the remaining public ports in Nova Scotia. Those discussions are ongoing.

So, there’s that.

Personally, I’m not discounting the possibility that as a municipality we’ve decided that ownership of the harbor bottom is both key to any future port development AND of no concern whatsoever.

We’re flexible that way.