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Nova Scotia’s operating grant for Maine ferry reaches new high at $16.3 million for 2020 season

Click to play video: 'Transportation minister focused on 2020 sailing season for Yarmouth to Maine'
Transportation minister focused on 2020 sailing season for Yarmouth to Maine
WATCH: With the end of the 2019 sailing season fast approaching, the heavily subsidized Yarmouth to Bar Harbour, Maine ferry hasn’t made one trip. As Jeremy Keefe reports, government officials are looking ahead to 2020, denying the season was a waste. – Oct 1, 2019

The subsidy for the Yarmouth-Maine Ferry is projected to be $16.3 million this year, according to documents presented as part of the Nova Scotia Budget on Tuesday.

That will make it the highest single-year subsidy for the service since it was reintroduced in 2016.

The ferry service, operated by Bay Ferries Ltd., and known as the CAT, has been described as a boon for tourism and the economy of rural Nova Scotia.

But the service has received its share of criticism and the Nova Scotia government has yet to conduct an economic impact assessment that would provide details on what effects, if any, the service has had in rural Nova Scotia.

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The CAT is heavily subsidized by the province through what it calls an operating grant. The grant is a key part of the 10-year deal inked between Bay Ferries Ltd., and the provincial government in 2016.

Click to play video: 'Tories sue Nova Scotia government over details of Yarmouth-Maine ferry fees'
Tories sue Nova Scotia government over details of Yarmouth-Maine ferry fees

This year’s subsidy is similar in size to the $16.2-million grant provided to the company in 2019 — the year the service shifted its American port of call to Bar Harbor, Maine.

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In previous years when the CAT operated between Yarmouth, N.S. and Portland, Maine, the grant has been $10.3 million in 2016, $14 million in 2017 and $13.8 million in 2018.

Those figures don’t include the $13.1 million spent in 2015 on retrofitting the boat and initiating the service or the additional $10.2 million spent during the 2018/2019 fiscal year to repair the vessel’s damaged gear box and renovate the Bar Harbor terminal.

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But in 2019, the move to Bar Harbor was touted as resulting in potential savings in fuel costs because of a shorter trip.

Marla MacInnis, a spokesperson for the province’s Department of Transportation and Infrastructure, said that the increase to the grant has been a result of not receiving revenue.

“Revenue works to offset fixed costs associated with the service,” MacInnis said in an emailed statement.

“We will begin to see our costs decrease once the service is re-established and we are bringing in revenue.”

The ferry sat idle last year as there were no commercial crossings during what was supposed to be the inaugural season sailing to Bar Harbor.

But the move was plagued by delays as U.S. Customs and Border Protection ordered renovations to the Bar Harbor terminal building before it would put agents in place to process ferry passengers.

Click to play video: 'Bay Ferries CEO faces questions over Bar Harbor service at Nova Scotia legislature'
Bay Ferries CEO faces questions over Bar Harbor service at Nova Scotia legislature

The renovations at the terminal include the demolition of existing buildings outside the terminal’s customs area, as well as several outbuildings and portions of the ferry terminal’s interior.

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The terminal upgrades are projected to cost about $8.5 million — a bill also covered by the Government of Nova Scotia

Including the projected $16.3 million grant for the upcoming sailing season, Nova Scotia has spent $95.5 million on the ferry service since 2015.

McInnis said the province was “disappointed we were unable to offer a service last year” but said that they are “pleased” that Bay Ferries have begun selling tickets for the 2020 season.

The service will officially launch on June 26, according to a schedule posted on the company’s website.

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