It’s time for Confessions of a Bad Reporter.
In this week’s episode, I have to confess that I did not attend the Port of Sydney’s Annual General Meeting (AGM) on February 23. It was on a Wednesday night, a week before I publish, and I thought I would be able to watch the video later at my leisure, as I had last year. But the Port, in its wisdom, decided there was no need for video this year and so I am reduced to working from the Cape Breton Post account of the affair and a CBC story about the planned revamp of the cruise pavilion (which I discussed in detail after last year’s AGM.)
Luckily, the Port board has dropped the minutes of its December 8 meeting, which include an update on the retail project:
An application has been submitted to ACOA, and several meetings were held with the agency. Provincially meetings have been held with Develop Nova Scotia, Minister of Economic Development, and Minister Brian Comer to create a plan on how to best proceed with the provincial funding request. The exact ask to CBRM is unknown currently, however, another meeting with staff is planned.
The minutes also contain a section labeled “in camera” by which the board means the period after the three Port employees in attendance — CEO Marlene Usher, General Manager Paul Carrigan and Manager of Cruise and Admin Nicole MacAulay (who is also, for some reason, the recording secretary of the meetings) — have left and the board carries on by itself.
But in camera means a meeting held without the public or the press, and since neither the public nor the press is permitted to attend Port of Sydney board meetings (although both should be), all the board’s meetings are by definition in camera. Such is the love for secrecy in this town, however, that the Port board has found a way to go even more in camera.
Whether anyone continues to take minutes after the recording secretary has been dismissed is an open question. Minutes are kept for CBRM council in camera sessions, even though they’re not made public for 10 years, but given the port board doesn’t understand what “in camera” means, I’m not holding out much hope for minutes.
This way, though, lies madness, so I’ll focus instead on the AGM which was held in public, although it was held in public in February — meaning, in contradiction of the corporation’s Articles of Association which, as board member James Kerr told council last June, call for the AGM to be held within six months of the end of the Port’s fiscal year (March 30). That June session was for information only and council ended simply by noting “the need to work on the Articles of Association and further discussion.”
I can’t find any record of council returning to the issue and voting to alter the Articles of Association to allow the AGM to proceed in February and yet, here is the AGM proceeding in February (as it did last year). Riddle me that, if you please.
Non-cruise business
Here’s how the Post account of the meeting begins:
Marlene Usher says she is well aware the hardest lesson the Port of Sydney learned during the COVID-19 pandemic was not to rely so heavily on cruises as a primary revenue stream.
“We weren’t diversified enough; we were 100 per cent dependent on cruise,” the port’s chief executive said following its 2022 annual general meeting held Wednesday night at the Joan Harriss Pavilion.
So, two points.
First, did it actually take a pandemic to show them they relied too heavily on the notoriously fickle cruise industry? I would think a glance at the financials for any given year pre-pandemic would have told them that.
Although, second, they don’t actually depend “100%” on cruise. During last year’s AGM, Saltwire reported that cruise accounted for 78% of the Port’s revenue, because it does attract some non-cruise business, and that was supposed to have increased once they got a second berth. Now, I realize it’s not really fair to judge the amount of new business the second berth has attracted to date, given it opened during a pandemic, but I think it’s still worth comparing what was said in the quest for $20 million to build it and what happened during the first year it operated.
The due diligence report on the second berth prepared by CPCS for ACOA and the provincial government included this list of non-cruise “lost revenue” provided by the Port of Sydney. Basically, money the Port claimed it would have earned had it had a second berth in place:
CPCS wasn’t actually convinced the second berth would generate much non-cruise business. Among its conclusions, it said that while the second berth would “afford the Port of Sydney an opportunity to accommodate certain non-cruise related cargo business outside the cruise season” they expected “other cargo opportunities to be limited to ad hoc needs relating to project cargo, ship repair, etc.”
So it’s interesting to note that, according to the December 8 Port of Sydney board minutes, as of end-October 2021:
Wharfage and berthage revenue are up by $42,613 due to the increased capacity provided by the second berth resulting in unscheduled traffic. The port has been receiving a lot of inquiries for berthing.
As noted above, the Port holds its AGM before the end of its fiscal year, so we can’t talk in terms of full-year figures, but the most recent wharfage and berthage numbers available — those to end-December 2021 — were presented during council’s regular February meeting and are up $50,801.24.
I will withhold judgement until we’ve seen what happens during a non-pandemic year, but I think it’s no mystery why the quest to “diversify” revenues has led the Port of Sydney to retail opportunities portside rather than non-cruise vessel-related revenues.
Navigating COVID
The Post account of the AGM continues:
Darren Chiasson, partner and business adviser with MNP [the accounting firm that audited the Port’s financials] said that on the operations side, “Revenues were just over $1 million, with expenses of $1.132 million. For the year, the operating results of the port was a (net) $25,741 deficit, which was quite remarkable given the lack of commercial activity.
“What allowed the port to generate that result was the ability to take some of the cash available through a trust fund and repurpose that for operating purposes. And that was about $435,000.
I would have rephrased that slightly. I would have said the Port’s $25,741 operating deficit was NOT AT ALL remarkable, given its ability to dip into a trust fund, most of which was once earmarked for navigational aids.
And being me, I would then point out that there would have been even more trust fund money to dip into had the Port not chosen to spend over $1 million from it on studies and travel and consultants in support of an elusive (if not utterly illusionary) container terminal project.
I would then have noted that those navigational aids have never been installed, meaning the channel created by the $38 million Sydney harbor dredge has not been used since it was completed in 2012. (I wonder how we’ll mark the 10th anniversary of its non-use?) And yes, I know the Coast Guard has apparently taken over responsibility for installing the aids, but that doesn’t alter the fact that it’s 2022 and they have yet to be installed.
Also worth noting, the Port was able to “defer” its 2021 payment (worth $165,000) on the debt it owes the CBRM for leasing the Joan Harriss Cruise Pavilion and Usher has asked to defer the payment for 2022 as well. That debt now stands at $991,000. I don’t actually have a problem with the payment being deferred, but the ongoing generosity of the CBRM in this matter needs to be duly noted in any discussion of the Port’s performance — a private sector landlord would likely be less understanding.
Cruisin’
Usher is optimistic about the return of cruise in 2022. According to the minutes from the December 8 board meeting, 100 calls have been booked (including those expected to dock in Louisbourg):
The actual season will be dependent on the status of Covid however management remain optimistic about having a successful season. Bookings have been steady for 2023 and 2024. There is a November 30th Interim order issued from Government of Canada outlining regulations which allow for cruise under certain conditions. Discussions and plans are continuing with the board of ACPA (Association of Canadian Port Authorities) and the Atlantic Canada Cruise Association. A letter has been sent to the Minister of Transport and Public Health Canada outlining the industry’s issues and concerns
I check in periodically with maritime lawyer Jim Walker’s Cruise Law News to see what’s happening with the industry, which is how I discovered that Royal Caribbean Cruise Lines (RCCL) has designated four vessels, the latest being the Serenade of the Seas, as “quarantine” or “hospital” ships for crew members with COVID. Walker links to a video posted in January by “Martina from Argentina,” a preternaturally upbeat RCCL employee who does her best to make being locked in your cabin watching television while you recover from COVID sound like a good time. Writes Walker:
Serenade of the Seas will operate as a floating “quarantine or hospital ship” to “assist the rest of the fleet.” This “new mission,” as Maria explains, is to assist the fleet in accepting the transfer of COVID-19 positive crew members from other Royal Caribbean cruise ships sailing Western Caribbean itineraries so that they can continue to call on Caribbean ports (which apparently have reporting requirements that block ships from calling when their total population (of guests and crew members exceeds 1%).
To place this news in context, Royal Caribbean has assembled a fleet of cruise ships to house their crew members who test positive for COVID-19 and to provide medical treatment to those who are symptomatic. Two of the other ships, the Vision of the Seas and the Rhapsody of the Seas, are currently at maximum capacity with over 1,500 infected crew members on each ship. The majority of the crew members are symptomatic.
A third Royal Caribbean cruise ship, the Jewel of the Seas, conducted its first transfer of infected / ill crew members from the Harmony of the Seas yesterday morning when it brought aboard 237 crew members. The Oasis of the Seas also made a crew transfer of infected crew members to the Jewel.
So, that’s what’s happening in the cruise industry. The advent of what Walker terms “plague ships.”
Etc.
Those December 8 board meeting minutes contained a couple of other items worth a mention.
First, there’s one called “Naming of main berth-update” which says:
Before we define a process to name the main berth this will be discussed with Mayor McDougall.
I have to assume the “main berth” is what people like me insist on calling “the government wharf” as opposed to the “second berth.” I had no idea there was a plan afoot to give it a name, and given the Port’s terrible track record in naming things — “Liberty Pier,” anyone? — I shudder to think what they’ll come up with. (Although it turns out “Liberty Emporium” — for the indoor market in the Cruise Pavilion — and “Fisherman’s Cove” — for the line of shops to be built along the boardwalk — are blessedly just “working titles.”)
Obviously, we need a public contest, so someone can suggest “Berthy MacBerthface” if nothing else.
And finally, “Christmas at the Port” was a “big success” thanks to “pent up demand by vendor and consumer” and the Port is hoping to host Port Days this May for the first time since 2019.
Be still my beating heart.
