Premier Darrell Dexter has announced that the province will soon put out an expression of interest seeking a private sector ferry operator willing to run a successful and profitable ferry between Portland, Maine, and Yarmouth, Nova Scotia.
The province says it will commit to a new cruise ferry operation for Yarmouth and will seek partners in the venture to revitalize the southwest Nova Scotia economy and bring more U.S. visitors to the province.
Premier Darrell Dexter, on Sept. 7, accepted the report from an expert ferry panel appointed in April. The report lays out the conditions under which a successful and profitable ferry service from Maine to Yarmouth can operate.
"I have said all along that the province would support a ferry service that could stand on its own, a service that could be successful and profitable," said Premier Dexter. "We now know that ferry could exist, with the right business model and the right partners."
The report illustrates the decline of the previous ferry operation due to decreased ridership and increased fuel costs. By 2009, Nova Scotians were covering the ferry's losses of almost $7 million annually.
However, the report indicates that a successful and profitable ferry service is possible with an operator who has a sophisticated marketing strategy, who can leverage a strong tourist experience in southwest Nova Scotia and provide a high-quality on-board experience for passengers.
Based on the conditions outlined in the report, the province is prepared to commit up to $21 million over seven years for a new cruise ferry operation in Yarmouth. Over the coming weeks, the province will put out a call for expressions of interest for potential private-sector ferry operators and will begin discussions with the federal government, business and municipal leaders in southwest Nova Scotia, and stakeholders in Maine.
"The province cannot do it alone this time," said Premier Dexter. "For this new Yarmouth ferry to work, the federal and municipal governments will need to come to the table, and businesses and residents of southwest Nova Scotia will need to throw their support behind it.
"Nova Scotia now has a plan for a successful, profitable and stable ferry service that can carry 130,000 people every year through southwest Nova Scotia. Now the work must begin to turn the vision in this report into reality."
The panel report estimates there will be about $5 million in start-up costs for baseline research, advertising, vessel acquisition and financing, and roughly $21 million will be needed to cover early years operating losses.
A federal government study indicates that up to $13 million would be needed to repair and refurbish the Yarmouth terminal facilities, owned by the federal government. With these investments in place, the panel report suggests that a new Yarmouth-Maine cruise ferry business could break even around the seventh year and achieve a modest profit after that.
The full ferry panel report is available online at www.gov.ns.ca/econ/yarmouth-ferry-study.asp.
The following is a text of Premier Darrell Dexter's response to the report: Re-establishing a Yarmouth-US Ferry? An analysis of the issues. Premier Dexter made these remarks to the media after the Sept. 7 morning release of the report.
Thank you for being here.
Peter Nicholson, Elizabeth Beale and their colleagues on the expert panel have delivered a definitive report on a ferry service from New England to Maine.
The report finds what we all know to be true — the old ferry model had long ago failed.
When the federal government abandoned its responsibility for the service the province stepped in.
Ridership fell steadily after 2002.
The Yarmouth ferry service never recovered.
Each year fewer and fewer people took that boat.
In 2009, as the recession hit, ridership was down 73 per cent from its peak in 2002.
Yet Nova Scotians were paying more and more to run an increasingly empty ferry across the Gulf of Maine.
The previous government chose to cover the losses of a service that fewer and fewer people were using.
By 2009 Nova Scotians were covering the company’s losses to the tune of almost $7 million annually, with only mounting losses on the horizon.
The decision to end the Cat ferry and instead seek to establish a viable service was the right one, but it was difficult for the people of Yarmouth.
A ferry link to New England is an important part of their history.
My government did not give up on Yarmouth or simply criticize a failed model.
The province supported local efforts to find a replacement.
That did not work.
A few months ago I announced that a panel of top experts would produce a definitive report.
I am pleased to say that the province accepts the expert panel’s report.
I have reviewed it closely and I believe it correctly lays out the conditions under which a successful and profitable ferry service from Maine to Yarmouth can operate.
I have said all along that the province would support a ferry service that could stand on its own.
This report says that a cruise ferry service in Nova Scotia can survive in the short term and thrive in the long term if the service:
…provides a high quality on-board experience;
…is supported with a sophisticated marketing strategy;
…and leverages a strong tourist experience in southwest Nova Scotia.
So today I am announcing that the province will soon put out an expression of interest seeking a private sector ferry operator willing to run a successful and profitable ferry between Portland, Maine, and Yarmouth, Nova Scotia.
All along I committed to supporting a sustainable ferry service.
Under the conditions outlined in the report Nova Scotia is prepared to commit as much as $21 million over seven years to establish a new long-term cruise ferry operation in Yarmouth.
That money is critical, according to the panel report, in allowing a new private partner to develop the ridership that can make this ferry work.
A profitable and successful ferry can then operate on its own as a private venture.
The province cannot do it alone this time.
For this new Yarmouth ferry to work, Nova Scotians will need the federal government to pitch in and accept responsibility around things like an upgrade to the Yarmouth terminal.
The province will need municipalities, businesses and residents of the area to throw their support and their effort behind it.
I know they will.
I have seen their passion for a ferry these past three years.
Nova Scotia and Yarmouth now have a plan for a successful, profitable and stable ferry service that will carry 130,000 people every year through Yarmouth and the surrounding areas — a ferry that will re-establish Yarmouth and Nova Scotia’s long-standing transportation link to New England for many, many years to come.
Now the work must begin to turn the vision in this report into reality.