Community Economic Development (CED) has been widely hailed as the most appropriate strategy for reviving local economies. It involves a new way of thinking, which avoids old controversies about public and private enterprise, and puts its emphasis on bottom-up community initiatives. It is designed to appeal to governments on both the right and the left--especially those that see themselves as representing people at the grass roots.British Columbia has been governed for most of the last forty years by the Social Credit, a party with a strong rural, populist base and a commitment to small-scale private enterprise. Nonetheless, successive provincial governments have given scant support to Community Economic Development. This is despite the fact that the City of Nanaimo has been the site of one of the most successful CED efforts in the country. My purpose here is to explore this paradox, by examining provincial policy in relation to community economic development activities in the Nanaimo area. The thesis is that the provinces failure to support CED initiatives in Nanaimo is due to a variety of political and bureaucratic resistances to the surrender of central authority.