The federal government announced Wednesday it is scrapping Enterprise Cape Breton Corporation, the Crown agency that has been tasked for the last 27 years with helping finance economic development in Cape Breton and Mulgrave, N.S.
The government said the Atlantic Opportunities Agency will assume responsibility for delivering economic development programs and services in Cape Breton and that funding to the island will not be cut.
Staff who work for ECBC will have jobs with ACOA at the same rate of pay and retain earned vacation, sick leave and years of service. ACOA Minister Rob Moore said in the statement that the Port Hawkesbury office will be restaffed.
ECBC faced a storm of controversy last year after its chief executive was accused of a conflict of interest and of hiring three employees because of their close connections to the federal Conservative party.
CEO John Lynn is on leave and under investigation by the federal Office of the Conflict of Interest and Ethics Commissioner and the Office of the Public Sector Integrity Commissioner of Canada.
ECBC has been under fire for its plan to demolish the Royal Cape Breton Yacht Club building on the Sydney waterfront while spending $4 million to build a new marina in Ben Eoin, located about 20 kilometres from Sydney.
Lynn has rejected the suggestion that his status as a boater with property on Bras d'Or Lake represents a conflict of interest.
ECBC and ACOA funnelled $84 million into Cape Breton last year.