08/08/2012 12:02 EDT | Updated 10/08/2012 05:12 EDT

Enterprise agencies may be forced to close next year

Some of the smaller economic development agencies in New Brunswick say they’ll have to shut down next year unless the provincial government provides some financial assistance.

The federal government announced in May it will eliminate its funding to the 15 agencies in the province.

The provincial government is scheduled to roll out a new structure for economic development programs this fall.

But the Alward government’s action plan, released in May, doesn't mention any continuing role for the agencies, which promote economic development in their local areas.

"We're planning for a worst-case scenario, being a closure at the end of March,” said Donald Hammond, the executive director of Enterprise Chaleur.

The agencies located in cities are expect to absorb the cut because they get a significant amount of their funding from municipal governments.

But those in rural areas rely on Ottawa for up to 70 per cent of their budgets.

"So unless there is a new model brought forward by the province, we will cease to operate next May,” said John Flynn, the executive director of Enterprise Central NB, which covers from McAdam to Minto.

The uncertainty makes it difficult to work on long-term projects, he said.

“I mean we're trying to operate right now as if it's status quo, and we're going to continue to do that.

“However, certainly the morale is low, people are unsure, people are looking for other work, all those things that are expected because of the uncertainty.”

In May, the Atlantic Canada Opportunities Agency announced it was eliminating its annual operational funding to regional economic development groups in all of the Atlantic provinces, effective May 21, 2013.

ACOA Minister Bernard Valcourt said at the time the agencies don’t add any value to federal and provincial programs.

The core funding that ACOA has provided to regional economic development organizations (REDOs) will instead be invested directly in small- and medium-sized businesses and communities in support of initiatives that deliver economic growth and job creation throughout the region, a memo to the organizations stated.

The cuts are part of the $18 million being shaved from the ACOA budget over three years, Valcourt said.