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ECBC Annual Report 2008


Message from the Chair
Message from the CEO
Board of Directors
Senior Management
Who We Are
Our Mission
Our Mandate
Economic Context
Performance Against Objectives
Support to Business
Support to Communities
Business Recruitment and
Policy and Research 
Delivery Service Agent for the
Government of Canada
Property Operations
Accountability and Transparency
Human Resources
Corporate Social Responsibility
Official Languages and Communications
Corporate Governance
Risk Management
Management Discussion and Analysis
Financial Statements

Message from Board Chairperson
Monique Collette

It is my pleasure to present this annual report on behalf of the board of directors and staff of Enterprise Cape Breton Corporation (ECBC). As the principal federal government organization for economic development in Cape Breton, ECBC's mission is to work in partnership with governments, the private sector and the community to assist, promote and coordinate efforts that foster an environment supportive of the generation of wealth and job creation on Cape Breton Island and in Mulgrave.

The past year has been one of change and renewal for ECBC. At an institutional level, the Corporation is currently undergoing a mandate review requested by the Treasury Board Secretariat. At an operational level, a recruitment process was initiated in late 2007 to find a new chief executive officer for the Corporation. At a board level, the composition of the ECBC board of directors changed at the end of the 2006-2007 with the appointment of five new external directors and the departure of the former vice-president, who was also a board member.

This new board was quick to embrace its stewardship responsibilities: developing an appropriate and effective working relationship between the board and management; and ensuring there are mechanisms in place to achieve accountability. The board is committed to the ongoing improvement of its corporate governance practices. Efforts throughout the year have focused on strategic planning and increased dialogue with partners and stakeholders.

The economy of Cape Breton Island and Mulgrave continues to be in transition as communities adjust to the decline of traditional industries. ECBC's broad and flexible mandate makes it uniquely positioned to be a catalyst for growth and development but clearly the Corporation's strength is rooted in the dedication of its board of directors and staff. They take ECBC's mission to heart and are committed to its success. This was particularly evident in 2007-2008 when Marlene Usher graciously accepted the position of Acting CEO. The board of directors extends its sincere appreciation for her leadership through this period of transition.

Message from Acting CEO
Marlene Usher

It has been both a pleasure and an honour to serve as Acting CEO of ECBC during 2007-2008.

The Corporation’s focus throughout the year has been the strengthening of its strategic planning and governance framework. With leadership from the board of directors and the dedication of management and staff, progress has been made in re-engaging the community and government stakeholders. Strategic planning has been paramount and the Corporation began work on the implementation of management resources and results structure based on its strategic plan. 

Using its own programs and acting as a delivery agent for the programs of the Atlantic Canada Opportunities Agency (ACOA), ECBC is able to offer "made in Cape Breton" economic development solutions. The Corporation's focus is on strengthening the area's economic foundation. At a community level, the Corporation works with its partners to develop community infrastructure that facilitates further investment and growth. ECBC also works with the private sector to explore new opportunities and to make strategic business investments.

Although economic development is a gradual process with no quick fix, the Island's indicators show signs of improvement. The unemployment rate for 2007 stood at 14%, a far cry from 25% in 1993. 

The future offers choices for the people of Cape Breton and Mulgrave. While there are no guarantees of prosperity, opportunities await and, with partnership and leadership, Cape Breton's economy has the potential to become a solid base on which to build our future.


Ms. Collette assumed the responsibilities of Chair of the Enterprise Cape Breton Corporation in 2003. She is also President of ACOA.

A native of Sydney, Mr. Munroe is a chartered accountant and an associate partner with MGM & Associates in Sydney. He has extensive experience in auditing, accounting, tax and other financial advisory services. Mr. Munroe is involved in various professional and community activities.

Ms. Landry, a resident of St. Peters, brings a wealth of professional experience to the board. Ms. Landry was the first woman to hold the positions of inspector and superintendent of schools in Nova Scotia and has also worked as a consultant in education. Now retired, Ms. Landry is an active volunteer in her community.

Mr. MacInnis, a resident of Creignish, Inverness County, is a graduate of St. Francis Xavier University. He is now retired from a career in education. Mr. MacInnis serves on several boards and numerous organizing committees.

Ms. Usher  joined the Corporation in 2001, after 12 years with a national chartered accounting firm. As a chartered accountant, she brings a wealth of experience in private sector business and consulting services.

A native of North Sydney, Ms. Figliomeni is a graduate of Mount Saint Vincent University and has knowledge and experience in the hospitality industry as a female entrepreneur. Ms. Figliomeni is currently the owner/operator of Joe’s Warehouse Restaurant in Sydney and serves on several boards and community organizations.

Mr. Miller is a long-time resident of Cape Breton Island. He is a graduate of St. Mary’s University and has recently retired from a career in banking. He is currently employed with the Cape Breton District Health Authority.


Acting Chief Executive Officer

Director, Communications and Access to Information/Privacy

Acting Director General, Development

Director General, Corporate Services

Director, Internal Audit

Acting Driector General, Commercial Programs

ECBC is a Crown corporation established pursuant to Part II of the Government Organization Act, Atlantic Canada, 1987 (also known as the Enterprise Cape Breton Corporation Act).

ECBC’s small geographical focus, local control and flexible mandate enable the Corporation to devise initiatives that are very specific to local needs and priorities. The Corporation can take a direct or holistic approach to any problem and is able to bring together and involve all stakeholders in the local economy for direction and input.

As a Crown corporation, ECBC is a distinct legal entity reporting to Parliament through the Minister of the Atlantic Canada Opportunities Agency.

In addition to its own programs, ECBC is responsible for the delivery of ACOA's programs on Cape Breton Island. In 1995, ECBC and ACOA signed a Memorandum of Understanding (MOU) allowing ECBC to design its programming and economic development strategies to complement ACOA programming. The MOU was renegotiated with ACOA for two additional five-year terms effective April 1, 2000 and April 1, 2005.

ECBC has a history of working in partnership with Service Canada, Nova Scotia Economic Development, Regional Development Authorities, Nova Scotia Business Inc., Nova Scotia Department of Tourism and Culture, Nova Scotia Department of Energy, Cape Breton Development Corporation (DEVCO) and Destination Cape Breton. They are also in partnership with community business development corporations (CBDCs), various not-for-profit organizations, municipalities and the private sector on a number of economic development initiatives.

The Enterprise Cape Breton Corporation Act provides the Corporation with a broad legislative mandate which reads:

The objects of the Corporation are to promote and assist, either alone or in conjunction with any person or the Government of Canada or of Nova Scotia or any agency of either of those governments, the financing and development of industry on Cape Breton Island* to provide employment outside the coal producing industry and to broaden the base of the economy of Cape Breton Island.
*This definition of Cape Breton includes the Mulgrave area.

The mission statement focuses the Corporation on the major issues affecting the economy of Cape Breton Island and the Mulgrave area. ECBC’s mission statement reads:

Enterprise Cape Breton Corporation (ECBC) is the principal federal government organization for economic development in Cape Breton. ECBC, in partnership with all levels of government, the private sector and other community stakeholders, will use its broad and flexible powers to assist, promote and co-ordinate efforts that foster an environment supportive of the generation of wealth to effect sustainable job creation throughout Cape Breton Island and Mulgrave.

Cape Breton Island continues to redefine its economy after the closure of the Island's two main industries, coal and steel, at the turn of the millennium. Heavy investment in these industries for many years crowded out other potential areas for growth, leaving the Island at a relative disadvantage compared with other regions. Building economic capacity takes time as investment and growth are a long-term process.

Changing demographics, highlighted by an aging labour force and out-migration continue to be the most significant issues facing the Cape Breton economy today. Between 1996 and 2006, Cape Breton Island witnessed a 10% decrease in population, with large decreases in the younger age groups and an increase in age groups over 55 years of age.  

Cape Breton saw a decline in both the labour force and employment in 2007.

The decline in the labour force can be attributed in part to retirements and the steady out-migration of workers to other labour markets. The number of employed between 25 and 44 years of age now represents 38% of total employment, down from 54% in 1987. 

On the whole, there is a long-term trend toward an older workforce in both Canada and Nova Scotia, due to a demographic structure that is significantly influenced by aging baby boomers.

In Cape Breton, this trend has been exacerbated by a lack of employment opportunities over the past few decades, resulting in an outmigration of workers. From 2001 to 2006, Cape Breton Island experienced a net out-migration flow of 4,726 individuals. Almost all (95%) or 4,493, of these individuals were under 45 years of age, and 73% were under 25.

Efforts to diversify the Cape Breton economy continue. Pockets of development have emerged, which help to build a foundation for further development and growth.

The tourism industry continues to be one of the main economic drivers for the Island. A $300-million tourism development - Louisbourg Resort Golf and Spa - is currently underway. The company will initially construct 24 luxurious homes, but the plan is to expand to a 200-300 home resort. This 18-hole championship golf resort will be complete by 2011.

A decision on the $300-million Donkin coal mine project is due in 2008, once the feasibility work is complete. Xstrata PLC, a Swiss multinational mining firm, was selected to revive the abandoned Donkin coal mine. If the project proceeds, it will be two to three years before the mine is operational; it could employ up to 300 people. 

Work is currently underway for the remediation of the Sydney Tar Ponds and will continue for at least nine years, at a cost of about $400 million.

In 2007, PharmEng International Inc. opened a state-of-the-art pharmaceutical manufacturing facility in Cape Breton. The facility will initially employ 65 workers and is anticipated to grow to in excess of 150 workers within three years.

The tele-services industry has expanded and employs over 3,900 people in a number of communities throughout the Island. The employment provided by tele-services centres lends flexibility to the labour market and provides skills and training for those looking for entry-level employment. 

In the interest of greater government accountability, departments, agencies and Crown corporations within the Government of Canada have moved to a more comprehensive, results-focused accountability structure for reporting financial and non-financial information.

This results-focused accountability structure requires departments, agencies and Crown corporations to clearly define the results to be achieved in terms of impacts and effects of the programs or services being delivered. It also requires them to measure and evaluate performance, and where necessary, make adjustments to improve both efficiency and effectiveness. A results-based approach provides information that enables departments and agencies to distinguish program strengths and weaknesses, as well as guidance to management on what does and does not work.

In 2000, ECBC implemented a performance management framework. Developed by ECBC, in consultation with the Treasury Board of Canada Secretariat (TBS), the primary objective of the framework was to ensure a consistent basis for presenting results-oriented information on the Corporation's activities from year to year.

Effective April 1, 2005, the Management, Resources, and Results Structure Policy (MRRS Policy) replaced the 1996 Planning, Reporting and Accountability Structure policy framework. The MRRS Policy provides the federal government with an integrated, modern expenditure management framework to establish a common government-wide approach to the collection, management, and public reporting of financial and non-financial performance information.

The MRRS Policy applies to all departments as defined in section 2 of the Financial Administration Act. It also applies to any Crown corporation seeking appropriations from Parliament. Guidelines indicate that Crown corporations are required to discuss an appropriately modified application of the MRRS Policy with TBS.

The MRRS Policy requires departments to develop an MRRS comprising of three components:

•  Strategic Outcomes;
•  Program Activity Architecture (PAA); and
•  Governance Structure.

During 2007-2008, ECBC contracted the services of the Performance Management Network to revise the Corporation's PAA, prepare its MRRS and revise its performance management framework. 

Five program activities continued to guide the Corporation's strategic direction. They are:

•  Support to Business;
•  Support to Communities;
•  Business Recruitment and Investment;
•  Policy and Research; and
•  Provision of Services for the Government of Canada.


To grow the economy by encouraging private sector investment in projects that enhance the competiveness of commercial enterprises and increase trade opportunities to produce long-term, sustainable jobs.

According to the Canadian Federation of Independent Business, small and medium-sized enterprises (SMEs) are Canada's main employer.  Data from 2004 reveal that 32% of employed Canadians had a job in a firm with fewer than 50 employees, while 24% work for mid-sized businesses employing between 50 and 500 workers. SMEs make up the bulk of Canadian establishments with small establishments representing over 97% of all Canadian businesses.

SMEs are one of the key economic drivers on Cape Breton Island. ECBC works with businesses in various stages of growth, making investments in business start-ups, expansions, innovation, export development, e-business, business skills development, strategic infrastructure and telecommunications links. 

The Corporation can provide access to capital in the form of secured, unsecured or interest-free loans, equity or non-repayable assistance. During 2007-2008, ECBC committed over $6 million in assistance as part of its support to business activities.

ECBC's support to business has helped businesses to increase employment and their level of export sales, as well as to leverage other sources of investment. Between April 1, 2007, and March 31, 2008, ECBC assisted in the direct creation of an estimated 167 jobs, exceeding its annual and five-year job creation targets. The Corporation also exceeded its annual target for leveraged investment and its annual and five-year targets for the dollar value of new export sales. It did, however, fall short on its target for the number of e-commerce projects. During 2008-2009, the Corporation is undertaking a new awareness initiative to promote all of the Corporation's programs, of which e-commerce will be highlighted.


To help communities plan and implement community development projects that have a direct link to long-term, self-sustaining economic activity.

ECBC worked with a number of community economic development organizations during the year, to help achieve specific goals identified within their individual strategic plans. The Corporation made a number of strategic investments that help to create an environment for sustainable economic growth. 

During the year, the Corporation provided funding to 97 festival and events across the Island, leveraging over $1.9 million.  ECBC provided funding to a number of other tourism-related projects including the Silver Dart Centennial, a tourism marketing strategy for Cape Breton Island, the Clipper 07-08 Round the World Yacht Race, experiential programming workshops at the Fortress of Louisbourg, and marketing for an International Drum Festival. 

Assistance was also provided to the Sydney Ports Corporation to conduct preliminary environmental assessment testing, to the Strait of Canso Superport Corporation for infrastructure improvements, as well as to many other community development projects.

ECBC continues to support conventions and sporting events.

During the year the Corporation provided assistance to the Grand Slam of Curling event, the 18th Annual Regional Harley Owners’ Group Rally on Cape Breton Island, and the 2008 Annual General Meeting and Entry Draft of the Quebec Major Junior Hockey League (QMJHL) in Cape Breton.

ECBC continued to work with First Nation communities on the Island in 2007-2008. The Corporation assisted with the establishment of an Aboriginal economic benefits office for coordinating opportunities related to the Sydney Tar Ponds cleanup project in order to maximize economic benefits for the five Unama'ki communities on Cape Breton Island.  The Sydney Tar Ponds Agency has set aside the cooling pond cleanup for Aboriginal businesses. Only companies with at least 51% Aboriginal ownership and control will be eligible to bid. In addition, if a bidder has more than five full-time employees, at least one-third of them must be Aboriginal. There are also Aboriginal content requirements for subcontractors.

The Corporation exceeded both its annual target and five-year target for leveraged investment. During 2007-2008, the Corporation leveraged $4.5 million under its Support to Community activities.


To attract new business investment to Cape Breton Island.

Foreign direct investment (FDI) plays a major role in the Canadian economy through job creation, advancing productivity, as well as fuelling innovation and technology. Foreign firms account for 7% of all employees in Nova Scotia.  An important aspect of FDI development is based on the provision of timely and relevant investment information and intelligence.

During the year, the Corporation worked in conjunction with the Cape Breton Business Partnership in the redevelopment of an investment website for Cape Breton. The Cape Breton investment attraction website will become the key channel to disseminate information on Cape Breton Island. The redeveloped website will provide an all-encompassing, easily accessible web-based investment attraction portal that gives the latest and most accurate economic data and other important indicators. It is important that accurate, factual information about the business climate and lifestyle of Cape Breton Island be available to ensure that decision makers, investors and individuals are aware of investment opportunities.

ECBC supported a number of other investment-related activities during the year including an incoming buyer’s mission during the Celtic Colours International Festival, an Offshore Technology Conference in Houston, Texas, as well as advertisements during the national broadcast of the Christmas Daddies Telethon in December. 

ECBC captures new investment by identifying foreign direct investment from outside Canada, as well as off-Island investment from within Canada. ECBC attracted an estimated $124,000 in new investment to Cape Breton during 2007-2008, falling short of its target. This target has been revisited as part of ECBC's overall review of its performance management framework, particularly given the wind-up of the CBGF in 2007-2008. Over the past six years, ECBC has participated in a number of the projects supported by CBGF which, given their size and scope, resulted in significant investment in Cape Breton.


To help provide a sound basis for the Corporation's policy priorities and programs.

ECBC carries out policy research and analysis that provides a foundation for the Corporation's overall strategic approach. ECBC research and analysis reflects and supports:

• emerging local economic issues;
• structural challenges and opportunities;
• sector specific considerations;
• federal policies;
• ECBC's program and development initiatives; and
• the need for ongoing performance management   and evaluation.

In 2007-2008, ECBC conducted research into a number of areas including the following.

Prosperity Gap Model for Cape Breton
The Corporation worked closely with DEVCO and the Cape Breton Business Partnership in the development of an economic model to evaluate Cape Breton's economic performance relative to its North American peers. It will identify gaps and pertinent contributing factors. It will give policy makers the tools to assess the key drivers known to improve economic performance (education, physical assets, research and development and trade) and to identify those that could accelerate closing the Cape Breton prosperity gap.

Program Activity Architecture, Management, Resources and Results Structure and Performance Management Framework for Enterprise Cape Breton Corporation

Effective April 1, 2005, the Government of Canada's Management, Resources and Results Structure (MRRS) Policy  replaced the 1996 Planning, Reporting and Accountability Structure policy framework.

During the year, the Corporation worked with consultants from the Performance Management Network to revise ECBC's Program Activity Architecture, to prepare the MRRS and to revise the Corporation’s performance management framework.

Detailed Sector Profiles of the Cape Breton Economy
During the year, the Corporation contracted the services of Gardner Pinfold Consulting Economists Limited to carry out a situational analysis of various sectors of the Cape Breton economy, including tourism, knowledge-based industries, manufacturing and processing, resource, environment and energy.

This analysis includes a summary of the recent performance of each sector, including recent growth trends; a review of its strengths, weaknesses, opportunities and threats; and projected growth of the sector over the next ten years. The sector analysis provides an objective review of these sectors and assesses the potential of each sector to become a "niche" for Cape Breton. The situational analysis will ultimately assist ECBC in its corporate planning process to prioritize the sectors identified in an effort to determine which sectors should be targeted for pro-active development strategies.

Economic Impact of Federal Development Assistance on Cape Breton Island
The Corporation contracted the services of Canmac Economics to carry out an economic impact of federal development assistance on Cape Breton Island.  This report provides a comprehensive assessment of the impact of ECBC's federal development programs over the seven-year fiscal period 2000-2001 to 2006-2007. The assessment includes, by year, an economic impact (employment, income and gross domestic product), a fiscal impact (revenue as cost savings by level of government) and a review of the changing structure of the Cape Breton economy. Results of the study conclude the following.

A total of $298 million of labour income was provided to Cape Breton by 2006-2007.

By the 2006-2007 fiscal period, ECBC's overall annual employment creation had grown to 11,340 (full-time equivalents (FTEs). This total employment includes:

•  7,538 (FTEs) direct employment from short-term and sustainable activities; and
•  3,802 indirect and induced spinoff employment.

Total GDP creation of $315 million by 2006-2007.


To deliver programs and services, on behalf of government organizations, in an effort to increase the opportunity for a coordinated approach to economic development on Cape Breton Island and, specifically, to enhance the growth of both earned incomes and employment opportunities in the region.


ECBC delivers the following programs on behalf of ACOA.

Business Development Program (BDP)
This program is designed to help SMEs establish, expand and modernize by offering access to capital in the form of interest-free, unsecured loans. The BDP also provides non-repayable support to non-profit organizations.

Consultant Advisory Services (CAS)
The CAS program provides clients with access to consulting expertise in pursuing business opportunities
or solving problems.

Municipal Rural Infrastructure Fund (MRIF)
This program supports small-scale municipal infrastructure projects. The MRIF also includes a component addressing the infrastructure needs of First Nation communities.

Atlantic Investment Partnership Second Wave
In 2000, the Atlantic Investment Partnership was launched as a $700-million investment to support economic development in Atlantic Canada. The Atlantic Investment Partnership has entered its second phase and addresses areas that are fundamental to continued economic growth investing in innovation, investing in communities, investing in people, and investing in the business climate.


The Cape Breton Growth Fund Corporation (Fund or CBGF) was incorporated in August 2000 as a wholly owned subsidiary of ECBC. Although a wholly owned subsidiary, Order in Council 2000-1341 pursuant to Section 86(2) of the Financial Administration Act (FAA) ordered that Part X of the FAA apply to the CBGF as if it were a parent Crown corporation, thus allowing a board of directors, independent of ECBC, to be appointed by Order in Council. The CBGF was established to administer the economic adjustment fund established by the Government of Canada and the Province of Nova Scotia in the wake of the federal government's decision to discontinue the coal mining operations of DEVCO.

The CBGF was designed as a transitional corporation to commence winding up its operations once the economic development funding was committed, or sooner if deemed appropriate by the Government of Canada. 

Change of Control
On June 7, 2007, the Governor in Council revoked the provision in the Order in Council establishing the Cape Breton Growth Fund Corporation that instructed the Fund to act as a parent Crown corporation for purposes of Part X of the FAA. Therefore, effective June 7, 2007, the Corporation assumed control of the Fund.  On April 1, 2008, the remaining assets and liabilities of the Growth Fund were transferred to the Corporation and the Growth Fund was dissolved. Financial statements for the period ended June 6, 2007 are found in Appendix 1. 

During the life of the Corporation, the CBGF made a commitment to develop an accountability and evaluation framework  that served to guide the Corporation's performance management activities. A performance management framework was implemented in 2001, which outlines result targets for the organization.

Two Types of Targets
To enhance transparency and accountability, the CBGF broadened its reporting system by creating two sets of result targets: global project targets and attribution targets. This ensures that management, the board, central agencies, Parliament, and the public have a greater understanding of the Corporation’s results.

Global Project Targets
These targets reflect the total expected results of projects funded by the CBGF and acknowledge its role as a catalytic financing agent.

Attribution Targets
These targets reflect an attribution of results to the CBGF by pro-rating among the government partner organizations as per the methodology in the CBGF’s performance management framework. These targets acknowledge that a number of organizations are involved in financing and share the results as per their level of financial contribution and partnership arrangements.


ECBC reactivated DARR (Cape Breton) Limited in 2003, a real estate holding company, in order to consolidate real property management and promote economic development in Cape Breton.

DARR deals with the acquisition and disposition of properties that financially benefit Cape Breton by encouraging private sector investment. DARR follows the policies of ECBC and reports its operational and financial activities at meetings of the ECBC Board of Directors.

During the 2007-2008 fiscal year, DARR incurred capital costs of $433,728 related to property additions and/or improvements and equipment. Proceeds on disposal of property and equipment totalled $368,749.

ECBC and DEVCO have collaborated during DEVCO's wind-up process in an effort to maximize the further potential for economic development as it relates to the transfer of DEVCO's real property assets to ECBC. To that end, a formal MOU was executed in 2005 and renewed in 2006. In January 2007, the first custodial transfer of approximately 3,700 acres of land to ECBC occurred. Both Crown corporations are currently working toward a second phase, which is expected to occur in fiscal 2008-2009. 

Throughout this past year, there have been several architectural upgrades to the Silicon Island facility. These include the construction of a new garage to house company equipment along with an addition to the central records unit. 

Along with these upgrades, an elevator was purchased and will be installed in 2008-2009. This elevator will require a small addition to the building to provide space for an elevator shaft. Preliminary plans have begun on a revitalization project for Silicon Island. Plans include upgrades to the exterior of the building (façade and windows) along with the grounds (landscaping and a new parking lot). The work is expected to be implemented over several fiscal years.


ECBC is divided into a number of operational units that report to the CEO. The units consist of:
• Commercial Accounts;
• Community Economic Development;
• Internal Audit;
• Corporate Services; and
• Communications and Access to Information/Privacy.

Training is offered in a number of areas including French language skills, annual professional development for the Corporation's certified accountants, university-level courses, leadership training, corporate governance training, life planning and retirement seminars, and workplace health and safety conferences.

Many ECBC employees have significant private sector experience, contributing to the overall success of the Corporation. Over 14% of the staff hold professional designations and 7% have master degrees. Approximately 16% of staff members are bilingual.

ECBC has two locations to serve clients in its mandate area.  The main office, located in Sydney, Nova Scotia, is the day-time home to 40 employees. The Corporation also has a satellite office in Port Hawkesbury, Nova Scotia, which is staffed by two employees.
Union Certification
ECBC employees obtained certification with the Public Service Alliance of Canada (PSAC) in July 2007. The collective bargaining process is currently underway.

In Fond Memory
A great friend and co-worker, Kevin Warner, succumbed to cancer on Monday, July 16, 2007, after a valiant battle. Kevin worked at ECBC for 15 years and left us with many fond memories.

Kevin was an enthusiastic, charismatic and a very valuable member of the ECBC family who was always willing to share his knowledge and experience with others. He will always be remembered for his sense of humor, his kind and caring nature and his great love of the outdoors.   
Rest in Peace, Good Friend.

Our Community
ECBC employees are an integral part of the community. Not only do they have a vested interest in the success of ECBC's mission, they also hold a true Cape Breton spirit.

Helping the local community is a top priority at the office and at home. This past year, with generous contributions of their time and money, employees were able to make a positive impact on the local community through various fundraising efforts.

Along with the first signs of spring, ECBC's community spirit was in the air as employees participated in the Canadian Cancer Society's Daffodil Day.

Through various fundraising initiatives, the staff and management participated in the Big Brother Big Sister "Bowl for Kids Sake" fundraiser. This initiative has become a tradition for ECBC staff.

The United Way Campaign continues to receive generous support from staff. ECBC employees received the Silver Employee Group Contribution Level for their combined contribution.

Every Friday, ECBC employees support the local community by taking a break from regular business attire and sporting their denims. This year "Casual Fridays" support the Every Woman's Centre, which helps families in need. 

For the first time, the staff at ECBC hit the water and took part in the first annual Dragon Boat Festival on Cape Breton Island. The Enterprise Cape Breton Dragons put together a team and tested their rowing skills against other local businesses and organizations to support the Cape Breton Palliative Care Society. The festival promotes a healthy lifestyle and demonstrates the community’s spirit and vitality.

Hats Off
Over the years, staff members at ECBC have been recognized as advocates for community involvement for a variety of reasons. Whether they are coaching minor hockey or baseball volunteering at local schools, fundraising, or simply supporting community-driven initiatives, employees of the Corporation are giving back to the communities they call home. This year alone, their combined efforts have produced a monetary amount of approximately $5,000 for various charitable fundraising efforts.   


The Corporation is committed to accountability and transparency in its operations. A policy of proactive disclosure, whereby all travel and hospitality expenses of the management team are regularly posted on its website, has been implemented. The site also contains a detailed listing of all approved projects that is equipped with a search feature.

ECBC became subject to the Access to Information Act (ATIA) and Privacy Act (PA) in September 2005. Since that time, the Corporation has invested in training for staff and additional software to facilitate its compliance with this new legislative requirement. The Corporation received eight ATIA requests and two PA requests in 2007-2008. As of March 31, 2008, all but one request had been completed.

With out-migration numbers increasing, creating opportunities for our youth has become more important than ever. ECBC recognizes that youth are the future of the Island and, collectively, we must increase opportunities in education and entrepreneurship.

ECBC has been committed to partnering with educational institutions and key stakeholders to build an economy that offers opportunities for youth.

ECBC funds the "Students in Business" program to encourage young entrepreneurs throughout its mandate area to create their own summer employment and gain valuable experience in the field of entrepreneurship. ECBC continues to hire approximately six students each year for summer employment in all areas of economic development.

The Corporation will continue to assist the Junior Chamber International in a number of areas, particularly entrepreneurship and skills development, export development and internships.

The Corporation also continues to provide an opportunity for Bachelor of Public Relations students to gain work experience throughout the year. By participating in Mount Saint Vincent University's Cooperative Education Program, ECBC provides on-the-job training and mentoring for public relations students.  

In 2006, ECBC launched its own client portal called "ECBC Direct."  This Secure Channel infrastructure enables clients to have access to their project information and to submit claims on-line. It also enables clients to correspond with ECBC officials in confidence.
ECBC is also making use of technology to enhance transparency and accountability. Through the proactive disclosure link on its website, all travel and hospitality expenses of the CEO are made available to the public. The project information link contains a detailed listing of all projects approved since 1999.


The Corporation is committed to the principles of the Official Languages Act (OLA) and works closely with the minority language (Francophone) communities on the Island that have identified economic development as a priority and a determining factor to their survival and growth.

With a bilingual staff complement of approximately 16%, ECBC maintains a core bilingual staff able to provide the Corporation's various programs and services in both official languages.

The Corporation has developed a close working relationship with minority language communities on Cape Breton Island and a designated development officer works directly with Francophone community groups and businesses. The Corporation has an official languages champion who is also a member of the  management committee. 

In the past, various ECBC staff members have been involved in full-time language training. While there were no staff members involved in full-time language training in 2007-2008, one member of the management team pursues part-time training and the Corporation financially reimburses staff who show an interest in strengthening their second language skills by enrolling in classes outside the workplace. 

Good communication is a key element to building strong relationships with the Corporation's shareholders and the community it serves. The overall goal of the communications team is to relate how the Government of Canada, through ECBC, is investing to improve the economic outlook of Cape Breton Island.

ECBC projects have affected almost every community in the Corporation's mandate area. It is important to recognize, celebrate and communicate these investments to encourage a sense of pride and encourage further investment.

This year, ACOA celebrated 20 years of service in Atlantic Canada. On June 6, 2007, ACOA employees took part in various events across the region to celebrate the Agency's accomplishments. ECBC, as a delivery agent for ACOA's programs in Cape Breton, also marked this occasion. Through video teleconferencing, employees had the opportunity to come together and share stories, recognize employee achievements and hear remarks from the Minister and senior officials.

The Atlantic Art of Success was an ACOA-led event to recognize and highlight the achievement of Atlantic Canadian entrepreneurs, while marking ACOA's 20 years of service. Held in Halifax on October 12, 2007, it was a networking forum that provided the opportunity to highlight the power of partnerships in driving Atlantic Canada's economic success, and to explore opportunities for future private and public sector collaboration. ECBC participated in the event, which was attended by Cape Breton businesses.

At the local level, ECBC issued 17 news releases on various initiatives, and participated as either a corporate sponsor or an exhibitor in 15 trade shows or trade missions. Twenty-eight companies participated in trade shows.

Working directly with ACOA, the ECBC Communications Unit continues to assist and promote a number of initiatives related to entrepreneurship, innovation, trade and women in business.

The Corporation has an in-house graphic design capability, which not only reduces costs, but enables it to maintain greater control over the design and management of public affairs materials. Throughout the year, 65 operational and promotional ads were created and placed in various publications. This in-house capability enables ECBC to produce its own annual report for which the staff takes responsibility for all aspects of the process.              


Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance. 
Organization for Economic Co-operation and Development Glossary of Statistical Terms 2005.

The ECBC Act sets out the Corporation's mandate, powers and objectives. Authority is vested in its board of directors and as such, the board assumes responsibility for overall corporate governance.  ECBC's governance and accountability regime is set out in Part X of the FAA.

A major change in ECBC's governance structure occurred on April 1, 2007, with the coming into force of certain provisions of the Federal Accountability Act (sections 247 - 253). The intent of these amendments was to make the ECBC organizational structure consistent with current good corporate governance practices as outlined in the section 5 of the Guidelines for Corporate Governance in Crown Corporations and Other Public Enterprises, (Department of Finance and the Treasury Board of Canada Secretariat, Ottawa, June 1996). 

These amendments repealed the definition of President and Vice-President in section 26 of the ECBC Act replacing it with two new definitions - Chairperson and Chief Executive Officer (CEO). Prior to the coming into force of these provisions, the Chairperson of the Board of Directors was also the Chief Executive Officer of the Corporation, and the Vice-President was the Chief Operating Officer. The Chairperson no longer exercises the CEO role and the position of Vice-President has been replaced by a separate CEO position.

The ECBC Board of Directors oversees the management of the Crown corporation and holds management responsible for its performance. In turn, the board is accountable to Parliament through its responsible Minister. In accordance with the FAA, ECBC must submit an annual corporate plan for Governor in Council approval. Annual capital and operating budgets are approved by Treasury Board.

ECBC must also prepare an annual report, which is its principal means of accounting to Parliament and to all Canadians. The annual reports as well as summaries of all budgets and plans are to be tabled in Parliament.

All Crown corporations are required to maintain proper financial statements that are subject to annual audit. The Office of the Auditor General of Canada has been appointed auditor for ECBC. Audit provisions include an annual audit opinion on the fairness of the presentation of the financial statements and on compliance with authorities and a provision to raise other matters as the auditors deem appropriate. ECBC is also subject to a value-for-money audit known as a special examination, which is conducted once every five years. The next special examination is scheduled to commence in the fall of 2008.

Corporate governance is an ongoing priority for the ECBC Board of Directors. Working in conjunction with The Conference Board of Canada in 2001 and again in 2002, the Corporation conducted an assessment of its compliance with Guidelines for Corporate Governance in Crown Corporations. A follow-up survey was conducted in 2002. ECBC has also established a corporate governance self-assessment tool, which is completed on a yearly basis for inclusion in the Corporation's annual report.



The ECBC Board of Directors is composed of seven members. At the start of the 2007-2008 fiscal year, six directors out of seven were relatively new to their roles. The makeup of the ECBC Board of Directors changed dramatically at the end of 2006-2007, with the appointment of five new directors and the departure of the former Vice-President, who was also a member of the board of directors. This position was filled on an interim basis. A full-day orientation for new directors was held in March, and in May, directors attended a day-long session on corporate governance lead by David Brown of Brown Governance Inc. In addition, directors attended two training sessions offered by the Canada School of Public Service -- Fiscal Literacy in a Government Environment and Understanding the Government Environment and its impact on Crown Corporations.

The ECBC Board of Directors met seven times during 2007-2008 and members attended a number of Board related sessions during the year. Priorities for the year included Board orientation and training, strategic planning and efforts to strengthen management and accountability within the Corporation.

The Audit Committee convened three times during 2007-2008 fiscal year in the course of performing its duties and functions, which include reviewing and advising the board in respect to the financial statements and the related auditor's report. The Audit Committee also takes an active role in recommending approval of loan impairments, forgiveness and write-offs. All directors are members of the Audit Committee, with the exception of the Chairperson and the CEO. The committee is assisted in its duties by the Internal Audit Unit. The Office of the Auditor General of Canada also participates in many of the committee's meetings. 


Detailed monitoring of all projects continues to be a high priority for ECBC.  All environmental assessments are monitored to ensure that environmental regulations and/or procedures are followed. Some projects require extensive monitoring due their sensitive nature. An example of this type of project would be the construction of The Lakes Golf Course in Ben Eoin. This project was monitored, at times daily, and/or weekly, due to interactions with fish habitat and the Bras d'Or Lakes eco-system. This monitoring ensured the highest level of mitigation was in place for the Corporation and the project's proponents. 


Risk refers to the uncertainty that surrounds future events and outcomes. It is the expression of the likelihood and impact of an event with the potential to influence the achievement of an organization's objectives. A certain element of risk is inherent in all of ECBC's operations. Risk management is a systematic approach to establish the best course of action within the context of uncertainty, by identifying, assessing, understanding, acting on, and communicating risk issues.

In 2005, ECBC commissioned the services of Deloitte & Touche to undertake the development of a risk management framework which would form the basis of a structured, systematic, disciplined approach to comprehensive risk management. The framework confirmed the significant risks impacting ECBC; provided a common means of classifying and communicating risk across the Corporation; provided a structure for the assessment, reporting and monitoring of risks by various groups; and ensured that due consideration is given to all risks in a day-to-day environment.

In consultation with staff and the Board of Directors, various risks have been identified and ranked as high, medium or low. This list is reviewed and updated on an annual basis by management and the Board of Directors. Risk factors continuously evolve and have different impacts on the Corporation.

Each risk was reviewed to determine methods to mitigate the risk. A mitigation plan was developed which identified mitigation strategies. Mitigation strategies include actions that could monitor, accept, transfer or further research the risk. General timing of the actions and allocations of responsibility to ECBC business functions and/or individuals have been established.

Operating and Development Activities
ECBC’s total parliamentary appropriation was $8.65 million in 2007-2008 (2007 - $8.655 million).

Development expenses in the form of non-repayable assistance totaled $2.8 million. Of this amount, the Corporation provided $0.5 million in direct support to business and $2.0 million in support to communities. In addition, other areas of focus included in the Corporate Plan, such as policy and investment, totalled $0.3 million.

In addition to the above-noted non-repayable assistance, the Corporation also provided repayable loans to businesses totalling $5.3 million (2007 - $2.9 million), which is not reflected in the above expenditures. The combined repayable and non-repayable assistance in 2007-2008 totalled $8.1 million, which is $0.5 million greater than budget. Additional funds were made available to applicants by way of development assistance as a result of recoveries being $0.8 million in excess of budget. The excess revenues relate to additional loans and repayable contribution collections, rentals, bad debt recoveries and other income. Therefore, it is felt the Corporation did indeed exceed its planned mandate.

Program Support
The Corporation employs 42 individuals delivering programs, administering payments, collections, trade and development work and various other functions. These individuals are located in offices in both Sydney and Port Hawkesbury to ensure that access to our programs and services is available locally to all clients within our mandate area. Staff deliver ECBC, ACOA and CBGF programming.

Overall, administrative costs incurred in 2007-2008 are reasonable in relation to budget and the prior year as detailed below.

In addition, the above figures include $177,000 related to Cape Breton Growth Fund Corporation administration costs for the period June 7, 2007 to March 31, 2008.

The percentage of overhead (administrative and program support) to development expenses and loan disbursements has decreased from 2000. The percentage for 2008 is reported at 24.2% (2007 - 24%) compared with 31% in 2000.

The combined ECBC/ACOA program support costs are 22.9% (2007 - 17%) of the total programs delivered for ECBC and ACOA, which is reasonable in relation to the rates for the previous eight years.

The Corporation maintains cash in a Canadian chartered bank and receives interest on a monthly basis. Interest is calculated on the average monthly balance at prime rate minus 1.75%. At March 31, 2008, the cash balance was $24.4 million and the interest rate paid by the bank was 3.565%.

Several types of loan instruments are used by the Corporation including forgivable loans, interest-bearing loans, non-interest bearing loans and conditionally repayable contributions.

The amount of forgiveness and all conditionally repayable contributions are charged to operations when the loan is issued. If terms and conditions of the loan contract are not fulfilled, the forgiveness or conditionally repayable amounts are reversed and the balance becomes receivable.

The Corporation has focused on providing a mix of investment vehicles to clients including loans, grants and conditionally repayable contributions in order to achieve the appropriate balance required by clients to grow and expand their business yet maximize the return on capital to the Corporation. By increasing the loan portfolio, all payments collected can be loaned to clients in subsequent years.

During the year, the Corporation disbursed $5.3 million in loans to clients, in addition to grants and contributions under the various programs administered by ECBC. The total loans and repayable contributions outstanding at March 31, 2008 are $32.3 million and consist of 58 accounts. The average loan and repayable contribution balance is $557,647 in 2008, compared to $38,555 in 1999.

The dramatic increase in loans receivable at March 31, 2008 is a direct result of the consolidation of the Cape Breton Growth Fund Corporation (CBGF) with ECBC as of June 7, 2007 and the inclusion of loans with a book value totalling $16.7 million as at June 6, 2007.

Collections on loans totalled $1.6 million (2007 - $1.0 million) during the year is $0.8 million in excess of the Corporate Plan budget. The collections and disbursements are consolidated and include CBGF amounts from June 7, 2007 to March 31, 2008.

As part of the due diligence process conducted by program officers, the Corporation mitigates the risk of loss by obtaining security, where appropriate, from the majority of clients. The Corporation holds security on 47% (2007 - 53%) of the loans outstanding at March 31, 2008. Security is obtained to protect the Corporation in the event of loan default. Security includes any one or a combination of the following: 1st and 2nd position mortgages on land and buildings; chattel mortgages; personal and corporate guarantees; general security agreements; first and floating debentures or promissory notes.

The allowance for loan impairment as a percentage of the loan balance outstanding has decreased significantly from 2000 to the current year percentage of 23.7% (2007 - 19.5%).

The allowance for loan impairment has been determined on an individual loan basis based on current information at year end and management’s knowledge of the entity’s circumstances. If it is determined that the collection may not be received on a timely basis, a provision for loan impairment is recorded in the financial statements.

Collections on the ACOA portfolio managed by ECBC for the 2007-2008 fiscal year totalled $4,018,000 (2007 - $4,312,000), which is 100% (2007 - 111%) of the established target amount.

The Corporation has met or exceeded ACOA’s collection targets for the past eight years as displayed in the accompanying chart.

The collection efforts of the Corporation have also resulted in the arrears rate of ACOA receivables being 6% (2007 - 4%). The results have been achieved due to the concerted efforts of both collection staff and program officers.

Equity Investments
There were no new equity investments made during the 2007-2008 fiscal year. The total number of equity investments stands at four (2007 - 3). Redemption of preferred shares totalled nil (2007 - nil).

Investment in Subsidiaries
Cape Breton Growth Fund Corporation
The Corporation had recorded an investment of $1 in the CBGF on the cost basis as the Governor  in Council had instructed the CBGF to act as a parent Crown corporation. Therefore, control or significant influence did not exist and the investment was accounted for on a cost basis until June 6, 2007, at which time the parent status was repealed pursuant to Order in Council P.C. 2007-1902 and control by ECBC did exist from June 7, 2007, and onward. Therefore, CBGF results from June 7, 2007, until March 31, 2008 are consolidated with ECBC at March 31, 2008.

The majority of the CBGF fund was committed and an Order in Council P.C. 2007-1902 dated June 6, 2007, granted approval to proceed with the transfer of the remaining assets and liabilities from CBGF to ECBC. The remaining assets and liabilities of the CBGF were transferred to the Corporation on April 1, 2008, and CBGF was dissolved.

The CBGF has a subsidiary CBCI and the results of operations from June 7, 2007 to March 31, 2008 are consolidated and included in the consolidated financial statements of ECBC at March 31, 2008 as a result of the change in control noted above.The operating assets and inventory of the operations were sold to a private sector group effective November 10, 2007.

The Corporation operates its subsidiary DARR (Cape Breton) Limited as a real estate holding and development company. DARR will acquire, manage and retain real property to support the delivery of economic development programs administered by ECBC. DARR’s financial statements are presented on a consolidated basis with ECBC.

Property and equipment acquisitions were $550,843 which is slightly less than the Corporate Plan budget amount of $575,000. Planned acquisitions of equipment and renovations to existing property occurred. During 2007-2008, renovations were completed on property in Port Hawkesbury and additions to Silicon Island property and equipment.

The Corporation administered $16.2 million (2007 - $19.6 million) of various ACOA programs during 2008 and recovered $2.4 million (2007 - $2.3 million) for salaries, professional fees and other operating costs related to delivering services pursuant to the ECBC/ACOA MOU.

A settlement agreement was signed in September 2005, with an amended cash purchase price of $1.255 million. No payments were received in 2007-2008 with payments of $252,071 and $325,000 due in 2009 and 2010 respectively. Repayments are non-interest bearing except in the event of a default.

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