Ottawa reaches deal on ferry service between P.E.I. and Nova Scotia

CHARLOTTETOWN – A three-year deal has been reached that will keep Northumberland Ferries plying the waters between Prince Edward Island and Nova Scotia until March 31, 2014.

Transport Minister Chuck Strahl made the announcement late Tuesday.

But the deal falls well short of the 15-year agreement P.E.I. Premier Robert Ghiz had lobbied for and less than the five-year agreements that have been signed in the past.

The service operates between Wood Islands, P.E.I., and Caribou, N.S.

Gail Shea, the federal fisheries minister and an Island MP, said the deal will provide stability to the service for three years.

Ottawa provides a $6-million annual subsidy for the operation.

The announcement of the deal came hours after a New Brunswick MP said Ottawa was proposing millions of dollars in help to three ferry services in the Maritimes, including the Island to Nova Scotia run.

Rodney Weston, Conservative MP for Saint John, said the federal government was offering $51 million over three years to the three services.

"I’m pleased to see this commitment come forward," he said from Ottawa. "It is a big concern for me in the Saint John area.

"I think most people realize the bulk of the employment occurs on the Saint John side of the Saint John-Digby ferry, and to me it’s so important that we see that continue."

The two other servuces are between Digby, N.S., and Saint John, N.B., and P.E.I. and Iles-de-la-Madeleine.

Weston said the $51 million is in addition to $32 million already earmarked in the 2010 budget for the three services.

He said the federal government was in talks with the three provinces about their contributions to the arrangement and "we anticipate this ferry service will continue."

Weston said the existing agreement in place on the Digby to Saint John route sees Ottawa contribute $3 million a year while Nova Scotia and New Brunswick kick in $1 million each.

"So it’s a $5-million commitment on an annual basis."

Weston said the three-year funding deal would keep the ferries afloat until at least March 2014.