The Nova Star unloading vehicles and passengers at the Yarmouth ferry terminal. TINA COMEAU PHOTO
By Tina Comeau
The province of Nova Scotia is advancing $5 million to Nova Star Cruises to help with operating costs in the first year of service between Yarmouth and Portland, Maine.
The government is doing this because the ferry company is continuing to work with the State of Maine for help in securing a $5-million operating line of credit.
In July 2013, Maine Governor Paul LePage sent a letter to then-Premier Darrell Dexter saying the state was willing to assist the Maine ferry company in securing a $5-million line of credit. This hasn‚Äôt come to fruition yet.
But, says Michel Samson, the province‚Äôs Minister of Economic and Rural Development and Tourism, Nova Star Cruises accounted for that $5 million in their business plan that was compiled prior to the start of the service.
‚ÄúThat‚Äôs why we had to advance the monies,‚ÄĚ the minister said in an interview with the Yarmouth Vanguard on May 30. ‚ÄúIt‚Äôs certainly not a reflection of anything that the company has done or the service that it has been providing.‚ÄĚ
Samson has discussed the issue with Governor LePage.
‚ÄúHe assured me that his officials were still working on it and the company is in direct discussions with them,‚ÄĚ he said.
Peter Steele, the director of communications for the governor‚Äôs office, told the Vanguard on Friday, ‚ÄúThe LePage administration is working with several parties to secure that line of credit. Our pledge was not to provide the line of credit, but to assist the company in securing it. These efforts are ongoing.‚ÄĚ
Asked about other financial support for the service from the state, Steele says, ‚ÄúThe State of Maine made significant infrastructure improvements and upgrades to the marine terminal in Portland so it could accommodate the ferry. In addition, the Maine Office of Tourism is assisting by promoting and marketing the ferry service.‚ÄĚ
The province of Nova Scotia has committed to spending up to $21 million for the service over a period of seven years. It is a forgivable loan providing the company continues to meet the terms and conditions set out in the agreement with the province.
Already $19 million of that overall amount has been provided. The $5 million advance is included in this figure. Samson says the intention had been for the company to spend around $10.5 million of the $21 million in start-up costs in the first year. The province also previously advanced the company $2 million (also included in the $19 million figure) to meet a bond obligation that was required in the United States for the company to be able to advertise its fares. Samson says he recently reminded Nova Star Cruises that the province expects repayment of that $2 million when the company has the financial means to do so.
- Read more special articles:
- Nova Star ferry saga continues to move in many directions
- MLA calls for more transparency and accountability on ferry funding
- Financial details released on Nova Star's start-up and operational costs
- KPMG report examines Nova Star expenses; province blacks out parts of released info
Asked if the province will be putting more than the $21 million into the service ‚Äď or what happens when that money runs out ¬≠‚Äď Samson says, ‚ÄúI think it‚Äôs important that Nova Scotians realize that previous ferry services that we had in Yarmouth, the one we have in Digby, comes at an annual cost to Nova Scotia taxpayers. We do not expect that this ferry service is going to be different.‚ÄĚ
Samson met with Nova Star Cruises chief operating officer Steve Durrell and president and CEO Mark Amundsen on May 29. He says both men assured him that the discussions with the State of Maine about the operating line of credit are ongoing.
Samson says that re-establishing ferry service after an absence of four seasons is going to meet with complications along the way.
Meanwhile, he says Nova Star Cruises officials have told him that the company has seen a ‚Äúgreat response‚ÄĚ to its discounted fares. Passengers under 18 years old travel for free and people who book prior to a June 15 deadline get a 20 per cent discount on their trip during the season. Still, some people continue to complain that the fares are too high and they won‚Äôt be traveling on the ferry because of it.
Asked if this concerns the province, Samson says no matter what price you put on a service there will always be people who feel it is expensive. He hopes people will look at the service for the experience it provides.
‚ÄúWe need people to take that ferry if it‚Äôs going to have a long term sustainable future,‚ÄĚ he says, adding this includes Nova Scotians. ‚ÄúThe business plan relies on traffic both ways.‚ÄĚ
Samson says he will be traveling on the ferry this season and says many of his family members have also booked trips.
For it‚Äôs part the company says it is thankful to the Nova Scotia government for its support.
"Nova Star Cruises is thankful for the ongoing support of the government of Nova Scotia as we work to re-establish cruise-ferry service between Yarmouth and Portland and continue our discussions with the State of Maine," said Amundsen.
"Our marketing efforts, focused on attracting visitors to Nova Scotia, are now well underway, and we are pleased with the interest we are receiving as we head into the peak tourism season."
The Nova Scotia Tourism Agency has ramped up marketing efforts to reach the northeastern United States market.
"We'll continue to work with Nova Star's marketing team to ensure our efforts are aligned. We focus our marketing on the province as a destination and the company markets its cruise service. There are many things we can do to be creative and get the word out," said Patrick Sullivan, CEO of the Nova Scotia Tourism Agency.