The demise of the Enterprise Cape Breton Corporation is causing concern about the impact on economic development in the area.
The Crown agency was tasked for the last 27 years with helping finance economic development in Cape Breton and Mulgrave, before the federal government announced on Wednesday that Ottawa plans to roll the Cape Breton agency into the Atlantic Canada Opportunities Agency.
Rob Moore, the minister responsible for both Crown agencies, said all employees of the Enterprise Cape Breton Corporation will keep their jobs at the agency's Sydney office and there are plans to employ staff again at an office in Port Hawkesbury.
He also said the federal government will maintain the level of economic development funding delivered through the Cape Breton agency when it becomes part of ACOA.
Despite that, the former vice-president of the Enterprise Cape Breton Corporation said the transition to ACOA could mean less money for economic development on the island.
"If this goes into the blanket ACOA budget then fine, the amount has been preserved," said Pat Bates.
"But is it preserved in a way that it is dedicated to future projects in Cape Breton? Or does this become part of the macro ACOA budget."
ECBC had a budget for economic development projects of just over $8.5 million a year.
Michel Sampson, the MLA for Cape Breton-Richmond and the Minister of Economic and Rural Development and Tourism, said he can't understand why the federal government decided to make this change now.
"Cape Breton continues to have a very high unemployment rate. Out migration continues to be an issue," he said.
"If anything, this would have been a time where we would have wanted to see more investments being made by the federal government in Cape Breton, not shutting down ECBC."
The Atlantic Canada Opportunities Agency was asked if the ECBC budget will continue to be dedicated to Cape Breton projects. The agency would only say more information will be available once legislation for the change is introduced in Parliament.
Samson said he's also concerned about the length of time it will take to get decisions made on projects for Cape Breton.
"Our concern is that this is going to take more time, it's going to mean more red tape," he said.
"It's hard to be business as usual when you are changing the structure of the business that we've been working with."