YARMOUTH, N.S. — The provincial government says $8.5 million is the expected cost to renovate the ferry terminal in Bar Harbor to accommodate the Nova Scotia-Maine ferry service.
That cost is in addition to $13.8 million the province has budgeted to operate the service for the year. It is also higher than original estimates to bring the terminal facility up to snuff.
Correspondence from Bay Ferries to Bar Harbor town council last summer had put the cost at around $3 million US, although it was said that was never a firm figure.
“Some of the numbers that were quoted in the past, there’s a bit of confusion in American dollars versus Canada dollars, this ($8.5 million) is Canadian dollars,” said Transportation and Infrastructure Renewal (TIR) Minister Lloyd Hines on March 20. “There’s a significant amount of work that has to be done.”
Work includes a fixed span and pier, deck and pile repairs and moving the transfer bridge/dock from Portland and reassembling it in Bar Harbor. There is also demolition of outer buildings, construction of customs plaza facilities and the reinstallation of security equipment being moved from Portland.
Customer and ticket selling space is also required.
“We certainly understand that $8.5 million is a significant number,” said Diane Saurette, executive director of finance for TIR. But she said the province thinks Bar Harbor is the right move.
The town of Bar Harbor paid $3.5 million US to purchase the terminal property back from the state of Maine.
“We have an opportunity here to bring down the cost of this service . . . to get that to under $10 million a year,” said Saurette. “We know it’s achievable because we were there in 2009 when this was just under $7 million.”
Bay Ferries operated a ferry between Bar Harbor and Yarmouth from 1997 to 2009. Up until 2006 it says it did so without any subsidy. Its operating expenses increased when it was asked by the province to take on the port of Portland in addition to Bar Harbor.
Had the ferry remained in Portland this year the same amount of money being spent in Bar Harbor terminal, or perhaps even higher, would have been needed for upgrades there, Saurette said. She said moving to Bar Harbor and having a long-term lease, as opposed to the year-to-year lease in Portland, coupled with lower operational costs and multi-year schedules is better for the service.
Last year the Cat ferry transported 50,185 passengers to and from Nova Scotia. It was the third consecutive year the company saw an increase in passengers.
The province's budgeted operating subsidy is higher this year than last year because this is the first year the province is paying the charter for the ferry, which is leased from US Navy Military Sealift Command and sits at around $4.2-million. The charter fee was waived in previous years due to physical investment that was put into the ferry.
US Customs and Border Protection has asked Bay Ferries and the province to pay the salaries of border patrol agents in Bar Harbor, due to having to relocate resources. Hines and Saurette said this cost is included within the $13.8 million. To help defray the customs costs, Bay Ferries will be charging a $10 port and security fee to travelers. The province is hoping to see around 60,000 passengers this year. With those numbers the $10 port and security fee could raise up to $600,000 in revenue to defray the customs cost.
Hines notes another area where there will be significant cost savings is in fuel consumption. The crossing, which is about two hours shorter, will save around 40 per cent of fuel costs.
Saurette notes the overall cost of operating the service runs close to $30 million. Revenue generated from the service covers the difference beyond the subsidy.
SERVICE IMPACTS
Asked if the province intends to carry out an impact study on how much economic activity the service generates, Hines said it’s something the province has been waiting to do until the service is more stable.
“The number that we have is in the vicinity of $28 million gross expenditure in the province,” he said, but it’s not a firm figure. Hines said in his previous life as a tourism operator in Guysborough County, he knows the value of the service.
“It’s extremely important to southwestern N.S. but it has an impact right across the province,” he said.
But not everyone agrees with the steep investment.
“The Yarmouth ferry is an important international connection for our province and provides an economic stimulus to many communities. It’s very unfortunate that the Liberal government in Halifax couldn't convince the Liberal government in Ottawa to help fund this important international link in yesterday’s federal budget,” said NDP MLA Susan LeBlanc. “There are ports and wharves across the province that could do quite a bit with $8.5 million in new funding. This money would be better spent at home.”
During the season Bay Ferries purchases all of its provisions for the ferry – fuel, food, etc., – in Yarmouth and in other parts of Nova Scotia. The service has created jobs for Nova Scotians, including people in Yarmouth, onboard the vessel and onshore in areas of food services, tourism counselling, security, stevedore, tickets sales and reservations, etc.
“We believe in this service. We believe in it for good strong reasons. Rural economic development. Tourism development in Nova Scotia,” said Hines.
“This is not Bay Ferries’ ferry. This is Nova Scotia’s ferry. We’re helping Bay Ferries provide that service for us,” he said, adding all ferries require some form of annual subsidy.
“The ferry service, which is a backbone of economic development in Pictou County, is subsidized to the tune, publicly disclosed, of over $12.4 million,” he said, saying it’s a federal subsidy. “The Digby-Saint John is over $10.5 million.” New Brunswick and Nova Scotia contribute $1 million each. The rest is federal.
Asked if the province hopes to one day see the federal government provide subsidy funding for the Cat service, Hines said, “hope springs eternal.”
The federal government and the province are helping with needed infrastructure upgrades at the ferry terminal in Yarmouth. Each is contributing $3 million. The three local municipal units are also footing the bill. The town of Yarmouth is spending $1.5 million, the Municipality of Yarmouth $1.2 million and the Municipality of Argyle $300,000.
Bay Ferries has listed June 21 as a target date for the start of The Cat’s 2019 service.
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