When Will Our Politicians Be Honest About The Economics Of The Yarmouth Ferry?

Posted August 18, 2023

The province wants an informed report on the economic benefits of the Yarmouth Ferry. CBC reports that 16 bids have been submitted to do the work. Your columnist is not one of them, but is puzzled that the matter needs such ponderous analysis. History provides a clear answer.

In late 2009 Darrel Dexter’s NDP government declared that they would no longer subsidize the ferry. It was the right decision, but the ground had not been well prepared in advance. There was considerable political blowback.

Running for cover, the NDP commissioned a report by four experts chaired by Peter Nicholson.

Here are some of the well considered conclusions delivered by the panel in August 2012:

  1. A re-established ferry service between Yarmouth and Maine could become commercially viable, but viability hinges on being able to build passenger traffic back at least to the 130,000-135,000 level.
  2. The ferry’s business model needs to be built around the passenger’s on-board experience rather than simply offering another transportation route from the US northeast to Nova Scotia. A ‘cruise ferry’ is the only suitable service model.
  3. To initiate a service and attract a suitably experienced operator, governments (federal and provincial) would have to provide roughly $30-$35 million of support. Note that this is total support on the way to breaking even, not an annual amount.
  4. Success was only possible if the province engaged at least one, and preferably two or more, experienced private sector operators.

The report emphasized that they were not making a recommendation on whether to proceed. They were advising on how to proceed if that was the political choice. Notwithstanding that, Dexter responded by saying that, “Nova Scotia now has a plan for a successful, profitable and stable ferry service…”

The Liberals defeated the NDP in 2013 and followed the NDP’s direction. None of the panel’s key recommendations were achieved. Experienced operators were not retained. Instead, they supported an American boat builder’s plan to get into the cruise business. It did not go well, with the province picking up the tab for many of the builder’s costs.

The Liberals switched to a ten-year contract for an American navy catamaran and changed the destination to Bar Harbour, Maine, paying for the needed boat modifications and a new customs facility. The crew is required to be 100% American, who must have been fascinated by Nova Scotia’s willingness to fund their job creation.

In addition, there are annual subsidies for operations, $18 million in 2022. That is about $1,300 each for the 14,000 visitors that arrived by ferry. They represent a miniscule 0.7% of the 1,886,000 total visitors to Nova Scotia.

Even in the years before the covid pandemic, traffic on the Yarmouth ferry had been hovering around 20,000, far below what the 2012 report identified as needed.

Since that report Nova Scotian taxpayers have spent well over $100 million dollars on the ferry without creating a single self-sustaining job. All three parties are studiously ignoring the obvious failure of the ferry project.

Last October, Public Service Minister Kim Masland said that a tender will be issued in the fall for a study of the ferry’s economic impact. She said the methodology for the study would be finalized by the winner of the contract.

You can tell that she is not in a hurry to get it done. When announcing the number of bidders she said that the contract should be issued in September. Eleven months to complete a tendering process that was announced last October?? Then she said that the actual work is expected to take about two years!

Political junkies will notice that slow walking the report will have it arrive after the next provincial election, scheduled for July 15, 2025. This is no coincidence. It lets the parties avoid taking a position on the topic during the campaign. They will be able to say that we should wait for the report.

Liberal Leader Zach Churchill, who is the MLA for Yarmouth, makes it clear that he has already made up his mind, saying that the ferry is “critical to the tourism economy in Nova Scotia”.

That is manifestly untrue. Yarmouth ferry passengers represent less than 1% of total arrivals. Many of them would travel by other means if there were no ferry. And any calculation of benefit should include the loss of revenue from Nova Scotians who use it to vacation in the United States instead of staying in the province.

The ferry is important to the economy of Churchill’s constituency for five months a year. But it makes no sense. On the 14,000 arrivals there, we spend $1,300 more per person than we do on Nova Scotia’s other 1.9 million visitors. Ask your MLA whether they think it makes sense.

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  • I want to commend you on your article regarding politicians being honest about the Yarmouth ferry printed in 19 August 2023 Chronicle Herald. I enjoy reading your articles not that I always agree but you provide a different perspective on the topic you are writing about.

    This ferry fiasco has been a thorn in my side ever since the Liberals under the leadership of Stephen MacNeil devised an ill-devised business plan not for the benefit of Nova Scotians but have Nova Scotians foot the millions of dollars spent to renovate the ferry terminal in Bar Harbor, pay salaries of US Customs agents, endless millions of dollars in subsidies to the private business Bay Ferries.

    Anyone with a bit of business sense can absolutely understand from your article that it has been a losing endeavor for years and it is our Nova Scotia tax dollars that have been subsidizing that white elephant ferry not the volume of paying passengers. There is not another business in Nova Scotia that wouldn’t love the government to subsidize their business with millions of dollars and not have to make a profit to keep operating.

    I don’t know how any of our MLAs regardless of their political affiliation can really justify keeping the ferry in operation except that saving their political job is more important than serving the people of Nova Scotia.
    And how many more studies do we need to spend money on. Apparently one more taking 2 years to compile then to be released after the next election.
    Will the study results be any different than the ones before? Not likely. The question is, “ How many times do you repeat the study expecting a different result?” My answer, “as many as it will take to keep the MLAs in their seats and in power”.
    So much for honesty.

    Here’s my option to the study. Perhaps a Nova Scotia poll with several well written questions would be a better insight to how we feel about this ferry service and whether it should be continued. I doubt it would take two years to complete and release.

    I sure hope someone will have the opportunity to pull out my thorn sooner than later.

    Liz Schurman | August 24, 2023

  • Really appreciated your Yarmouth ferry-funding evisceration. Having just returned broke but happy having succombed to the annual Garden of the Gulf extravaganza, the Gold Cup and Saucer I am puzzled, sort of, (I once was a government bureaucrat so life hold’s few surprises) by the exit Confederation Bridge fee mandated by some diligent souls who determined the fee to be $50.00 plus 25 cents! I am trying to visualize the committeee meeting when fifty dollars plus twenty-five cents was approved. Was there a dissenting voice, an alternative proposed? Did anyone suggest fifty plus a dime, possibly $49.00 plus a dollar and a half? Someone must have raised the spectacle of crowds of Americans searching in vain for the Queen’s (on-going) silver. “What’s a QUARTER, daddy?” (Incidentally, an American horse won the Gold Cup and Saucer much to the dismay of the ten thousand or so who had assembled at 12:30 am to witness the end to the greatest day in Maritime harness racing.) Of course, as loyal Canadians and cheerleaders for the visual wonders endemic to the “Island” (e.g. on the Island the shoulders of every road travelled (and we did the back roads from Tignish to Montague) are trimmed, mowed and cared for with the attention Bluenose travellers on the Sunrise Trail or elsewhere can only envy) Now, in concert with our relatives in the “Big Smoke” waiting for the Blue Jays to take flight we begin the tedious task of filling the jar with nickles and dimes and one twenty-five cent piece to bring us back home once more from the pinnacle of our summer adventures.
    Thanks for your continuing efforts to awaken the somnolent Bluenosers promoting the bottomless pit we know and love as the Yarmouth ferry,

    Paul Robinson | August 21, 2023

  • Note: His letter was sent to Liberal leader Zach Churchill, copied to me.

    Thank you for writing and thank you for the time you spend in Nova Scotia.

    Should the Yarmouth ferry be cancelled you will have an alternative going to St. John and taking the ferry to Digby. My calculation using Google maps and ferry schedules has the addition in time for your travel as one hour and ten minutes. As well the St John ferry has twice a day trips instead of one and is less vulnerable to cancellation.

    Bill

    Bill | August 21, 2023

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