Nova Star funding package was not realistic, minister says

$21 million spent

Carla Allen callen@thevanguard.ca
Published on July 24, 2014

a group of kayakers waves to those aboard the Nova Star as the ferry departs Yarmouth.
CARLA ALLEN PHOTO

Ten weeks after starting service, the operators of the Nova Star ferry have drained the barrel of money that was promised them over seven years.

On Thursday, the province authorized the expenditure of the remaining $2.1 million left from the envelope of $21 million announced by the NDP government last September.

Economic and Rural Development Minister Michel Samson said it had become very evident to cabinet that the deal announced by the previous government was more of a political deal than a natural economical, reality deal.

“Anyone who looks at ferry services that exist in North America, pretty well every one of them is subsidized,” he said.

“They are part of transportation links like our roads and highways and they require money. They don’t make money,” he said. Minister Samson used the Saint John/Digby ferry service, the Newfoundland ferries and P.E.I. ferry as examples, saying those are transportation links that governments have to pay money to maintain.

“Looking back at the time we had concerns when the deal was announced but when we got into office we wanted to do our best to see it through and give the deal a chance.

“ It became blatantly obvious today that this deal was unrealistic from Day One and we’ve now already reached the maximum amount of money that was set aside for this,” he said.

The funding being provided is for the operation of the ferry. With revenue based on ridership, the fixed costs that are encountered on a daily/monthly basis have to be addressed.

Minister Samson pointed out that of the $21 million envelope provided, there were unanticipated pressures that included a $2-million bond requested by the US government from the company, as well as a $5-million line of credit, committed by the governor of Maine, which has yet to be realized.

Minister Samson said the province plans on continuing to have discussions with the operator.

“Obviously we made a commitment to restoring the Yarmouth ferry service. We’re going to continue to make this thing a success.”

Mark Amundsen, president and CEO, Nova Star Cruises, says Nova Star Cruises continues to work with the Province of Nova Scotia as it focuses on rebuilding the ferry service between Nova Scotia and Maine.

 “Our goal was to reintroduce this service after many years and get re-established after a four-year hiatus of a ferry between Portland and Yarmouth,” he said.

He added that there have been several significant challenges and that operators know it will take more than the first year to rebuild.

“We have required the committed funds to get the service established and we continue to be in ongoing conversations with officials from the province.”

 He says the start-up of getting the service online has been significant and they are working to build the service and the ridership. Although the start was slower than expected, the company has received “exceptional” visitor feedback on the Nova Star voyage experience.

“As soon as summer arrived, the ticket bookings have significantly increased.”

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