An economic development organization in Cape Breton has quietly folded, as the provincial government insists on a new approach.

Business Cape Breton ran out of funding from the Cape Breton Regional Municipality on March 31.

The organization's chair confirmed the four staff have been issued layoff notices, and the landlord of the Charlotte Street office has been given notice.

"It was a hard business decision," said Parker Rudderham, the chair of the Business Cape Breton board. "We decided not to seek any other funding. We decided to dissolve."

CBRM Mayor Cecil Clarke said the group received about $400,000 in the last fiscal year.

New organization starting

The municipality plans to issue a request for proposals for economic development to be provided through a regional enterprise network, or REN.

But Rudderham said the Business Cape Breton board is not interested in submitting a bid because they don't believe the REN approach will be effective.

Business Cape Breton chair Parker Rudderham, seen in this file photo, said the decision to dissolve the organization was a tough one. (Wendy Martin/CBC)

"I don't know of any tangible results from it. There may be; I'm not aware of any. It's just very cumbersome, very bureaucratic, and it's gonna be a bunch of people sitting around drinking coffee and chatting, which nobody on our board was interested in doing," said Rudderham.

In contrast, Rudderham defended Business Cape Breton's record, saying the agency's focus on small, community-based projects was successful.

On its website, the agency claims it helped 134 clients in new business development from April 1, 2013, to April 1, 2017, with a projected job potential of 292.

Province insists on new network

Clarke said he's sorry to see Business Cape Breton fold.

But Clarke said the provincial government is insistent that the CBRM tender its economic-development needs and incorporate them into an REN.

He said the province indicated it would provide funding for economic development initiatives only if such a process were in place.

Cape Breton Regional Municipality Mayor Cecil Clarke said he's sorry to see Business Cape Breton fold. (CBC)

Clarke said he believed Business Cape Breton was very successful, and it is "uncertain" what will replace it.

"In the meantime, there are clients that will no longer have access to service," said Clarke. "There is no followup on some of the community development initiatives."

In an email, an official with the Department of Municipal Affairs said the department has been working closely with the municipality to address issues that impact the long-term viability of the municipality.

The email goes on to say that the two parties agreed on a number of initiatives, including the possibility of engaging in the REN program.