Economic Development Function Service Model Review

In 2019, Nanaimo Municipal Council stated its intention to increase the level of City support for the municipality’s economic development function. Council noted, however, the need to examine new funding levels in the context of a broader service review that determined:

  • the specific scope of services that should be included in an enhanced economic development function
  • the preferred service model through which the function should be delivered

Neilson Strategies Inc. was retained in late May, 2019, to conduct a review of the City’s economic development function focused on these points.

Over the course of the study, we undertook a considerable amount of background research to identify the various agencies involved in different facets of economic development in Nanaimo. We also conducted research to identify and fully understand the local government economic development service models in place in Canada today.

In June, 2019, we held twenty interviews with representatives of all economic sectors in the city to discuss efforts underway, and to understand the views of community leaders on the preferred scope of, and service delivery model for, the City’s economic development function.

We identified and assessed three service models based on a review of local government economic development functions across Canada and beyond. The models included:

  • In-House Model — Under this model the City’s new economic development function would be based in, and delivered by, the City administration.
  • City–Owned Agency Model — This model features the use of a separate agency, incorporated and owned (wholly or primarily) by the City, but with its own Board of Directors and staff.
  • Service Contract Model — In this model, the City would contract the operation of its economic development function to an independent organization.

Additional hybrid approaches that combine elements of the models were also assessed.

Our assessment pointed to the development of an In-House/City-Owned Agency Hybrid Model for the new function. In accordance with this model, we recommended the continuation of the City’s in-house economic development group with specific responsibilities. We also recommended the incorporation of a City-owned Nanaimo Prosperity Agency as an arm’s-length economic development corporation with other responsibilities. To help set the stage for the Nanaimo Prosperity Agency, we recommended further that the City establish a Nanaimo Prosperity Steering Committee comprised of representatives from all key economic sectors. The Committee’s mandate would be twofold:

  • to oversee and direct the development of a new Nanaimo Economic Development Strategy that would direct the Agency’s efforts
  • to develop an Agency blueprint that would detail the ownership structure, funding sources, role for Council, preferred qualifications for Directors, the City’s representation on the Board, and the Agency’s staffing needs

City Council accepted all of our recommendations.