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

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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