There Was No Yarmouth Ferry In 2019, But The USA Was Our Best Performing Tourist Market
Posted November 22, 2019
Nova Scotia’s tourism numbers through August are down. An important contributor to the drop was a problem with one of the transportation options. It wasn’t the ferry.
After deadly crashes of passenger airplanes in Indonesia and Ethiopia, the world’s airline regulator suspended the license to operate the Boeing 737 MAX aircraft. This grounded 387 aircraft around the world. Almost 5,000 of the planes are on order from the world’s airlines, but deliveries have been postponed until the problems that caused the crash is resolved.
Airlines have been scrambling to cope with the resultant loss in capacity, often cancelling routes as needed to make their schedules work with the number of aircraft available.
For Nova Scotia, this has meant the suspension of flights to Iceland, Paris, and London Heathrow. Visitors from overseas, which had shown year-over-year growth through March, fell sharply after the routes were lost.
Through August, the drop is 20%, or 13,500 visitors so far this year. These are typically longer-stay travellers and bigger spenders.
Visitors from other parts of Canada are down 2%, or 36,000 through August. This was due in part to a weak lineup of functions at the convention centre, after a strong debut in 2018.
The best results were from the United States, which were level with 2018, notwithstanding the complete absence of a ferry service. During the months of July and August, when the ferry had been scheduled to run, visitors from New England were equal in number to 2018.
Visitors from Middle Atlantic were up 5%. This coincided with increased capacity on flights from Philadelphia and New York which use short-haul planes, not the 737max.
It is reasonable to conclude that the absence of ferry service had little impact on the number of Americans who chose to come to Nova Scotia.
That is not to say that there were no losses resulting from the absence of ferry service. Accommodation providers in the southern part of the province had perhaps 12,000 fewer room nights than they would have had if the ferry was operating. That is an average of 200 per day.
From a province-wide standpoint, these would be offset by gains, especially in the Halifax area, from increased air traffic.
For the southern region, the missing 200 room nights might have generated as many as 20 seasonal jobs for accommodations employees, and perhaps as many again for workers at restaurants and attractions.
Those 40 seasonal jobs are attractive for post-secondary students and others who prefer to work only part of the year. But the wages they might have earned, well under $1 million, are a tiny fraction of the $13 million annual subsidy, let alone the $30 million being spent this year.
Scientists like to test their hypotheses about the impact of a factor by comparing results with and without the factor being present. Medications are tested by having a control group of patients taking placebos so that their outcomes can be compared with patients taking the medications under study.
If there is little difference in outcome one can reasonably conclude that the medication being tested has little beneficial impact.
Economics (rightly known as the dismal science) rarely affords the opportunity to make such a comparison. Nova Scotia’s unfortunate 2019 experience with its Yarmouth ferry provides a rare exception.
It shows that the subsidy vastly outweighs the possible income generated by the low wage seasonal jobs that might have been available if the ferry service was operating.
Most of those lost wages would have been recouped in other parts of the province. Most of the disadvantaged workers would have had other opportunities in seafood processing plants that are having to import workers from other countries.
The leaders of all three political parties should already have an intuitive understanding that the subsidy is not money well spent. When will one of them have the courage to say so, and propose more productive ways to support the economy of Yarmouth and neighbouring communities?
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