December 17, 2018 4:24 pm

Privacy ombudsman recommends Nova Scotia disclose fees paid for CAT ferry service

The CAT, a high-speed passenger ferry, departs from Yarmouth, N.S., heading to Portland, Maine, on its first scheduled trip on Wednesday, June 15, 2016.

Andrew Vaughan/ The Canadian Press
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The Nova Scotia government has received a slap on the wrist from the province’s privacy commissioner for its refusal to disclose the management fees it paid to the operator of a high-speed ferry service between Yarmouth, N.S., and Portland, Maine.

“There is a justifiably high democratic expectation of transparency around the expenditure of public money,” wrote information and privacy commissioner Catherine Tully in her report.

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“Expenditure of public funds goes to the heart of the Freedom of Information and Protection of Privacy Act’s purposes and is an important reason behind the need for detailed and convincing evidence [to block the release of such information].”

Tully says the evidence offered up by the Nova Scotia government “falls well short of the legal standard” and that the evidence consisted of “conclusionary statements of general assertions of risk.”

As a result, Tully recommends that the government disclose the entire funding agreement between Nova Scotia and Bay Ferries Limited.

READ MORE: Decision on future of CAT’s American port pushed until end of 2018

The ferry, better known as the CAT, is operated by Bay Ferries as part of a 10-year deal with the Nova Scotia government made back in 2016.

As part of the deal, the province agreed to cover any cash deficiency the company incurs for the year as well as a management fee and any bonus, should the ferry perform better than expected.

But the price tags for the management fee and a possible bonus have been kept secret.

Without that information, it’s impossible to tell how much of the ferry’s annual subsidy — it’s projected to receive $10.9 million for 2018 — is paid to Bay Ferries for simply being in charge of the service.

As a result, three groups — including Marieke Walsh, then a reporter with Global News — requested the financial information that Nova Scotia’s Department of Transportation and Infrastructure Renewal (TIR) had refused to provide under the province’s Freedom of Information and Protection of Privacy Act (FOIPOP) in the spring of 2016.

WATCH: Privacy ombudsman offers rebuke of N.S. premier’s claim to most transparent province in Canada

But the government refused, saying it could harm the financial or economic interests of Bay Ferries to do so and could also create a competitive disadvantage for the company.

Bay Ferries also objected to the release of the information.

The government said the disclosure of the management fee could harm Bay Ferries’ ability to negotiate a move to Bar Harbor or allow competitors to have an advantage at the negotiation table.

The Office of the Information and Privacy Commissioner disagrees.

“There is no evidence to reasonably conclude that by knowing what the operation costs and management fee the province is paying now could realistically assist a competitor in devising a bid in the future,” Tully wrote in her report.

Tully also says the management fee paid to Bay Ferries for two other ferry contracts are already publicly available and that the practice of publishing management fees “does not appear to be that uncommon.”

“It seems that Bay Ferries is able to successfully compete on ferry projects despite the fact that its management fees for two other projects are publicly available,” she concluded.

The government also informed Tully that Bay Ferries was only willing to enter into the agreement with the understanding that the management fees would be kept confidential.

But Tully says TIR did a “disservice” to Bay Ferries when it allowed them to believe the management fee would remain confidential, saying the province cannot contract out of its obligation to the FOIPOP Act.

READ MORE: Nova Scotia accepts some of ombudsman’s recommendations over minister’s use of private email

Only a recommendation

Marla MacInnis, a spokesperson for TIR, confirmed to Global News that the department has received the report but that officials “haven’t had an opportunity yet to consider it.”

The department now has 30 days to make a decision on whether it will follow the privacy commissioner’s recommendation.

Tully’s recommendations are non-binding, as she is not an officer of the legislature and therefore has no enforcement power.

“Public bodies can simply choose to ignore the commissioner’s recommendations,” Tully wrote in a report released last year that detailed how powerless her office is.

Despite a promise made by Premier Stephen McNeil when he was opposition leader in 2013 to expand the powers of the privacy commissioner, McNeil has since called the promise a “mistake.”

© 2018 Global News, a division of Corus Entertainment Inc.

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