Paying the Ferryman

Many Nova Scotians grumble about the huge subsidies the provincial government pays to keep the Yarmouth Ferry running (or not running, as the case may be), but the combined bill for that service and two others in the province  might leave those same Nova Scotians gobsmacked — over the past five years, the provincial and federal governments have ponied up over $200 million for the Yarmouth to Bar Harbor, Maine; Digby to Saint John, NB; and Caribou to Wood Islands, PEI ferry services.

The three services are run by two companies — Bay Ferries (Yarmouth and Digby) and Northumberland Ferries (Caribou) — and those two companies are run by one man — CEO Mark MacDonald.

And while the Yarmouth to Bar Harbor service has been canceled for the second year in a row, the other two are back in full operation, as of this past week.

Caribou, NS, ferry terminal, 29 June 2020. (Photo by Rick Grant)

Caribou, NS, ferry terminal, 29 June 2020. (Photo by Rick Grant)

 

Gov’t support

Under the Ferry Services Contribution Program, the federal government “provides funding to private operators to support three interprovincial ferry services in Eastern Canada.” The three are the Digby-Saint John and Caribou-Wood Island services, plus the service between Souris, PEI and Îles-de-la-Madeleine, Quebec. The four vessels servicing these routes are owned by the federal government as are the six terminals on these lines. In the 2019 budget, the feds extended the contribution program to 31 March 2022.

Interestingly, the federal government is only constitutionally mandated to support one of these services. As a 2018 Transport Canada evaluation of the Ferry Contribution Program noted:

Canada supports constitutionally mandated ferry services and those required by remote communities. The funding contribution for the Îles-de-la-Madeleine – Souris ferry services is aligned with the [National Marine Policy], as it supports access to a remote community. The contributions for the Wood Islands-Caribou and Digby-Saint John services remain inconsistent with the NMP, as these services do not serve a remote community nor are they constitutionally mandated.

Nevertheless, according to a federal government proactive disclosure website and information provided by Transport Canada media relations, over the last five years Northumberland Ferries has received a total of nearly $65 million in subsidies from Transport Canada.

Northumberland Ferries Grants and Contributions (2015-2019)

YearGrants and Contributions
2015$10,221,322*
2016$16,030,701*
2017$12,442,589*
2018$14,218,972*
2019$11,800,000**
Total$64,713,584
* revised from budget
**not revised

 

Over the same period, Bay Ferries was on the receiving end of over $53 million in subsidies, according to information available on the same federal government website:

Bay Ferries Grants and Contributions (2015-2019)

YearGrants and Contributions
2015$11,434,732*
2016$9,909,057*
2017$10,368,695*
2018$9,854,487*
2019$11,500,000**
Total$53,066,971
*revised from budget
**not revised

 

The Nova Scotia and New Brunswick governments each contribute $1 million annually to the Bay Ferries Digby-Saint John route. That adds another $10 million over five years, bringing total public expenditure on that service to $63,066,971.

The CAT Ferry between Yarmouth and Bar Harbor, which Bay Ferries leases from the US Navy, will not be in service this year and wasn’t last year, so most of our calculations are focused on the other services, but what information we have about the CAT pushes our ferry cost calculations up considerably.

The Yarmouth Ferry cost over $23 million to get up and running in its first year and has run deficits in each year of operation, even when it wasn’t actually operating. According to the Nova Scotia Department of Transportation and Infrastructure Renewal (TIR), the Yarmouth ferry cost Nova Scotians $17.8 million last year and will cost us $16.3 million this year — plus $10.1 million for terminal renovations in Bar Harbor..

In just three years, then, the service has run up a bill of over $67 million.

(The total cost for two years without passengers is $44,200,000 according to the Nova Scotia Department of Transportation. That is more than $45 for every man, woman and child in Nova Scotia.)

The province also pays a management fee to Bay Ferries which is not included in the figures provided by government. In fact, Tory leader Tim Houston has gone to court to try and force the province to make this fee public.

That brings total federal and provincial support to the three ferries over the monitored period to about $183,333,942.

Except that’s not actually the total: it doesn’t include vessel maintenance, wharf and terminal upkeep or dredging.

 

Shipshape

As noted above, the federal government owns the vessels on the interprovincial routes, so we asked Transport Canada to provide the annual maintenance costs for the vessels and terminals used by Northumberland Ferries and Bay Ferries on the Digby-Saint John route. 

We were given a five-year average of annual costs for all three interprovincial services; Caribou-Wood Islands, Digby-Saint John and the service between Souris, PEI and Îles-de-la-Madeleine (which is why we decided to do all our calculations on a five-year basis).

  • Annual vessel maintenance for four ships is averaged at $18.3 million.
  • Annual terminal maintenance including dredging for six terminals is averaged at $10.1 million.

We tried to calculate the maintenance costs based on the terminals and vessels used by Northumberland and Bay Ferries.

The two services use three of the four vessels (75%) and four of the six wharves and terminals (66.6%). So, over five years, a rough estimate would put vessel maintenance at nearly $69 million and terminal maintenance at about $34 million, for a total of about $103 million.

 

Vessel Maintenance

$18.3 million X 75% = $13,725,000 X 5 YEARS = $68,625,000

Terminal Maintenance and Dredging

$10.1 million X 66.6% = $6,726,600 X 5 YEARS = $33,633,000

Total = $102,258,000

 

That number may not be entirely accurate because we were not provided that actual maintenance numbers of the individual ferry services, still, it gives us a ballpark figure. Combining subsidies and maintenance costs for the Caribou-Wood Islands (Northumberland Ferries) and Digby-St. John (Bay Ferries) routes we get the following totals for the past five years:

Subsidies: $127,780,555

Maintenance: $102,258,000

Total: $230,038,555

Which puts the average annual total for Northumberland Ferries plus the Bay Ferries’ Digby-Saint John route at $46,007,711.

 

Management fees

But wait, there may be more.

As noted above, in 2019, Nova Scotia Progressive Conservative leader Tim Houston took the province to court to have Premier Stephen McNeil’s government release the management fees paid to Bay Ferries for operating the Yarmouth Ferry.

Trucks discharging from MV Confederation at Caribou, NS. 29 June 2020 (Photo by Rick Grant)

Trucks discharging from MV Confederation at Caribou, NS. 29 June 2020 (Photo by Rick Grant)

We asked for a copy of the contracts between the federal government and Northumberland Ferries and Bay Ferries, but Transport Canada told us in an email that:

The agreements between government and the operators as well as traffic data are considered third-party information and cannot be disclosed by Transport Canada.

So, it is unclear if there are further management fees paid to MacDonald and the two ferry services.

 

Traffic report

Unlike Transport Canada, which would not reveal traffic data, MacDonald replied to our request for 2019 traffic numbers for both services:

Ferry Traffic Statistics 2019

 PassengersCarsCommercial
Northumberland Ferries369,514147,10615,333
Bay Ferries131,88845,6045,556
Totals501,402192,71020,889

 

All in — passengers, cars and commercial traffic on both services — the total was 715,001.

If we do a (very) rough calculation, dividing total annual government subsidies for both services ($46,007,711) by total 2019 passenger and vehicle traffic, it works out to a public subsidy of $64.35 per passenger and vehicle, in addition to which, the ferry services collect fares from each motorist and passenger — you can see Northumberland Ferries’ rates here and Bay Ferries’ rates here.

The bottom line is clear: the Ferryman must be paid.

 

Addendum

A final note on Northumberland Ferries.

In its 2019 budget, the federal government announced plans to replace the 49-year-old Motor Vessel (MV) Holiday Island (as well as the MV Madeline, serving Îles-de-la-Madeleine).

Last spring, Transport Minister Marc Garneau announced that Chantier Davie of Quebec had been chosen to build the vessels. A news release dated 17 May 2019, stated that “other interested suppliers” had 15 calendar days to show they were capable of doing the job.

None did.

In an email, Transport Canada said it is too early to discuss details such as cost and delivery date.

 

Rick Grantl

 

 

Longtime CTV reporter Rick Grant began his television journalism career here on the Island. He is now based in Halifax.