POLITICS

Nova Scotia government releases breakdown of Yarmouth to Maine ferry costs

01/18/2015 04:19 EST | Updated 03/20/2015 05:59 EDT
HALIFAX - The Nova Scotia government has revealed that it has put another $2.5 million in tax dollars into the money-losing ferry service between Yarmouth, N.S., and Maine as it changed course Sunday on releasing some details of an audit into the service.

The province decided to release the details of the audit handed down last Thursday, which lists about $10.5 million in start-up costs and about $30 million in operating costs.

Nova Scotia taxpayers have now put $28.5 million dollars into the Nova Star service, which includes the additional $2.5 million to cover costs including berthing fees, fuel and staffing.

The government said on Thursday that it was withholding a number of financial details of the eight-page report by KPMG because Nova Star didn't want the details made public.

But in a news release, the province said because of a technical error, a newspaper in Bangor, Maine obtained the details from electronic versions so Nova Star has agreed they could be released.

"If you look at the report that was written by the U.S. paper, it's a misrepresentation of the numbers," said Economic Development Minister Michel Samson in an interview on Sunday.

"The company felt that it was important to get the right numbers out there, to explain what the numbers meant and as well, we want to ensure that people fully understood what our investment was in the company."

Samson said provincial rules state that private companies can request their financial information not be disclosed to the public.

He said the $10.5 million in start-up costs are in line with what the company had projected in its business plan.

"The KPMG report was meant to confirm that the money that was requested by Nova Star was in essence spent on exactly what was required to operate the ferry service and that no money was misappropriated, and that report was able to confirm that for us," he said.

The province gave the company an additional $5 million last fall on top of a $21-million loan that was spent in the first two months of the Nova Star's inaugural sailing season, although it was supposed to last seven years.

Samson admitted the seven-year loan was "unrealistic" and blamed the New Democrats for hastily drawing up the document ahead of an election.

"It's clear now looking back that the deal announced by the previous NDP government on the eve of an election was more of a political document than a financially sound one."

Samson also said "there is no question" the province's taxpayers will be ponying up more cash for the service.

"There will be a requirement that taxpayers do invest in the service as we see the ferry service similar to a highway," he said. "Transportation costs are incurred on a yearly basis to maintain our roads and infrastructure.

"This is the same. It's just we're working to ensure that it doesn't cost taxpayers any more than absolutely necessary."

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