Eco­nomic de­vel­op­ment needs to be em­braced

But CBRM coun­cil must adopt a more savvy ap­proach

Cape Breton Post - - Editorial - Jim Guy Politi­cal In­sights Dr. Jim Guy, au­thor and pro­fes­sor emer­i­tus of politi­cal science at Cape Bre­ton Univer­sity, can be reached for com­ment at

Back in 2014, Cape Bre­ton Re­gional Mu­nic­i­pal­ity (CBRM) Mayor Ce­cil Clarke ob­served pub­licly that “eco­nomic de­vel­op­ment” has never been the re­spon­si­bil­ity of the mu­nic­i­pal gov­ern­ment. Most politi­cal sci­en­tists would agree whole­heart­edly.

Barely ac­knowl­edged when Canada crafted its fed­eral sys­tem, mu­nic­i­pal gov­ern­ments were as­signed the mun­dane tasks of ser­vice de­liv­ery such as curb and gut­ter main­te­nance, garbage col­lec­tion, snow re­moval, and parks and recre­ation. Most of th­ese were the orig­i­nal 19th cen­tury func­tions ac­corded this level of gov­ern­ment.

Fast for­ward to the 21st cen­tury: Wel­come to the topsy-turvy world of Cana­dian fed­er­al­ism where today a mu­nic­i­pal­ity will en­gage in the in­ter­na­tional diplo­macy of invit­ing for­eign am­bas­sadors to town for talks on har­bour de­vel­op­ment and job cre­ation.

And re­mem­ber dur­ing the last mu­nic­i­pal cam­paign the may­oralty can­di­dates were bla­tantly asked to re­solve child poverty, high un­em­ploy­ment and to pre­pare the ground­work for a world-class con­tainer ter­mi­nal.


And don’t for­get to fix the pot­holes, re­tain heavy garbage pickup and build a new li­brary, among all the other “nor­mal” ground-level tasks of man­ag­ing the CBRM on a stretched mu­nic­i­pal bud­get.

Coun­cil has in­di­cated it now wishes to “tackle eco­nomic de­vel­op­ment.” But it must do so with no money or an ad­min­is­tra­tive in­fra­struc­ture to meet enor­mous eco­nomic chal­lenges. Coun­cil is not a min­istry of eco­nomic de­vel­op­ment.

With­out a doubt, th­ese are re­ally prob­lems of na­tional mag­ni­tude that have parachuted po­lit­i­cally to the mu­nic­i­pal level. The prob­lems re­quire the sub­stan­tial re­sources of the pro­vin­cial and fed­eral gov­ern­ments to re­solve them. Can’t be done by the CBRM on its own.

Some down­load­ing of gov­ern­ment re­spon­si­bil­i­ties be­gan with the prov­ince’s du­bi­ous plan to cre­ate ef­fi­cien­cies among the eight eastern Cape Bre­ton mu­nic­i­pal­i­ties. By the mid-1990s amal­ga­ma­tion had pushed us off the gov­ern­ment wharf with no in­struc­tion man­ual, a wink and a good luck wish.

At the end of the day, we were ex­pected to move for­ward with­out many of the re­sources that use to be avail­able to “re­gions” un­der pre­vi­ous fed­eral gov­ern­ments. This was when the fed­eral and pro­vin­cial gov­ern­ments took the “ini­tia­tive” on re­gional eco­nomic ex­pan­sion and pro­vided the money and ex­per­tise to fol­low up.

Re­gional eco­nomic de­vel­op­ment agen­cies have been estab­lished in each prov­ince, un­der the Min­istry of In­no­va­tion, Science and Eco­nomic De­vel­op­ment. The fed­eral gov­ern­ment pro­vides re­gions that ap­ply like ours with an eco­nomic de­vel­op­ment fa­cil­ity. The CBRM is an el­i­gi­ble client for the es­tab­lish­ment of such a fa­cil­ity, not­with­stand­ing the work of Busi­ness Cape Bre­ton and En­ter­prise Cape Bre­ton.

Re­cently, the CBRM coun­cil an­nounced that it wants to pre­pare its own eco­nomic de­vel­op­ment strat­egy. That strat­egy will have to be care­fully crafted within the thin fis­cal ca­pac­ity of the CBRM.

As the sec­ond ma­jor ur­ban cen­tre af­ter Hal­i­fax, the CBRM re­gret­tably faces a di­min­ish­ing tax base, high un­em­ploy­ment and a pro­vin­cial gov­ern­ment that an­nu­ally mis­ap­pro­pri­ates equal­iza­tion trans­fers to the CBRM and other mu­nic­i­pal­i­ties.

Once coun­cil demon­strates a com­plete un­der­stand­ing of this is­sue and how the is­sue it­self ex­plains the fis­cal dis­ad­van­tages un­der which the CBRM an­nu­ally op­er­ates, it will be in a po­si­tion to build a cred­i­ble strat­egy for eco­nomic de­vel­op­ment.

The strat­egy needs to start with rec­on­cil­ing our fis­cal re­la­tion­ship with the prov­ince. It has been ne­glected for too long. That in­volves ne­go­ti­at­ing a fair an­nual equal­iza­tion trans­fer based on the $1.8 bil­lion the fed­eral gov­ern­ment gives Nova Sco­tia, money to sta­bi­lize its pub­lic ser­vice de­liv­ery and to fund in­fra­struc­ture in mu­nic­i­pal­i­ties. Most of that money finds its way into the cap­i­tal re­gion and di­min­ishes fis­cal ca­pac­ity here.

An eco­nomic de­vel­op­ment strat­egy by coun­cil needs to ad­dress the out­stand­ing mat­ter of com­pa­ra­ble lev­els of tax­a­tion and ser­vices within the prov­ince. They are glar­ingly dis­torted!

The CBRM en­dures much higher res­i­den­tial and com­mer­cial lev­els of tax­a­tion than ex­ists in the rest of Nova Sco­tia. This re­sults from the de­lib­er­ate and sys­tem­atic un­der­fund­ing of mu­nic­i­pal­i­ties around the is­sue of equal­iza­tion.

All mu­nic­i­pal­i­ties out­side of Hal­i­fax are marginal­ized by the flawed fund­ing model of the pro­vin­cial gov­ern­ment. The Ivany Re­port em­pow­ered the cap­i­tal re­gion as the pre­ferred pro­vin­cial growth cen­tre and by so do­ing dis­em­pow­ered all other mu­nic­i­pal­i­ties in the over­all plan of eco­nomic re­cov­ery for the prov­ince. The CBRM will have to de­sign its own eco­nomic strat­egy with that in mind.


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