POLITICS

Nova Scotia giving up to $13 million more for ferry service to Maine

02/04/2015 04:00 EST | Updated 04/05/2015 05:59 EDT
YARMOUTH, N.S. - A ferry service in Nova Scotia with a money-losing past will get at least one more year to turn itself around after getting $13 million on Wednesday from the provincial government.

The one-year deal for Nova Star Cruises announced by Economic Development Minister Michel Samson for the run between Yarmouth and Portland, Maine, also came with promises of a reopened bidding process to operate the service in 2016.

The ferry was relaunched last year after a four-year hiatus, with the province spending $28.5 million to subsidize the inaugural season, which included a $21 million loan that was supposed to last seven years. The loan was spent in the first two months of operation.

"People believe that $28 million is too much to spend every year on a ferry," Samson said at the announcement in Yarmouth. "Our government understands that and we agree."

The upcoming season will run from June 1 to Oct. 14 and Samson promised more oversight with monthly reporting of passenger numbers and full access to the ferry's books. Funding will be provided to Nova Star each month and only after the company submits its expenses for review, he said.

Regardless of the outcome of this year's sailing season, Samson said the company will be required to submit a bid to run the service next year. A request for proposals will be issued this spring for the 2016 season with bids evaluated with the help of external industry experts.

"Our goal is simple, to have the right ferry service at the best price," said Samson.

He defended the additional $13 million saying it follows a year of experience with the service.

"We are confident that the economic benefit to Nova Scotians will exceed that (new) amount," he said.

But the opposition parties cast doubt on the government's plan.

Progressive Conservative Chris d'Entremont said there needs to be a clear picture of how the ferry service will be sustainable, while NDP Leader Maureen MacDonald said a line must be drawn on funding for the ferry when the government says provincial finances are tight.

Mark Amundsen, Nova Star Cruises president and CEO, expressed optimism about the future but he wouldn't say how much the company lost last year, citing the open bidding process that will take place.

The government has not committed to any funding beyond the $13 million and he said any funds left over will be paid back if the service does better than expected.

The company is partly resting its hopes on driving up passenger numbers, with a goal of 80,000 set for this year. Amundsen said the company is off to a good start with 51 confirmed tour bus bookings and ongoing negotiations with another 30 operators.

Lower fuel prices are also projected to trim about $2.5 million from a bill that stood at $7.8 million in 2014, he added.

The government said the 59,000 visitors who arrived via the ferry last year spent an estimated $13 million.

— By Keith Doucette in Halifax