MacKay announces another two-year lifeline for Princess

Nova Scotia and New Brunswick each are contributing $2 million and the government of Canada will invest $11.1 million to ensure the ferry service continues to run until Jan. 31, 2011.

"We recognize the importance of the ferry to the economy,” said Peter MacKay, minister of the Atlantic Canada Opportunities Agency. “We have listened to community and business leaders who rely on these important assets and delivered results for them and the people of Nova Scotia and New Brunswick,"

Bay Ferries Ltd., which operates the federally-owned ferry ‘Princess of Acadia’, stunned southwestern Nova Scotia in the summer of 2006 when it announced plans to terminate the service, claiming costs had climbed too high.

By November, the provinces and Ottawa had hammered out an aid package that was due to expire at the end of January, 2009.

When the 2006 aid package was announced, Transport Canada said the service would be maintained while the federal government works with stakeholders to explore viable options for a ferry service in the context of regional transportation requirements.

The department set up a working group of civil servants who held a number of public and private meetings with stakeholders before presenting their report last fall to Transport Minister Lawrence Cannon. The report has not been made public.

On Friday, MacKay’s remarks echoed those from 2006, saying the new two-year extension allows more time to investigate a possible long-term solution and also look at transportation requirements for the entire southwest Nova Scotia region.

But MacKay added the extension also would be used to assess commercial transportation alternatives and economic strategies should the ferry service be discontinued in the future.

ACOA will invest up to $1 million for the assessment that MacKay said would look at other ferry services in the region, across Canada and perhaps beyond.

The Digby-Saint John ferry service received $8 million in government funding in 2006, including $2 million from Nova Scotia. The province also invested up to $4.4 million in the Yarmouth-to-Maine ferry service. Both operations are run by Bay Ferries and both are being affected by high fuel costs and declining traffic.

South Shore MP Gerald Keddy said the Digby-Saint John service is particularly important to the fishing industry of western Nova Scotia, which accounts for 28 per cent of Canada’s fish catch. Much of that is shipped to American fish markets via ferry to Saint John.