The governments of Nova Scotia and New Brunswick say they will invest up to $6 million over the next three years to fund the ferry between Digby, N.S. and Saint John, N.B.
Nova Scotia Premier Darrell Dexter said each province will spend up to $1 million annually to help Bay Ferries Ltd. operate and maintain the route across the Bay of Fundy.
"This is a great example of a partnership, it is both us and the government of New Brunswick and the government of Canada co-operating to see that the service is appropriately in place," Dexter said Wednesday at a news conference in New Glasgow.
"Investing in the businesses and good jobs associated with these industries is what jobsHere, the plan to grow our economy, is all about. Both provinces will work with the federal government to find a viable long-term solution beyond 2014."
The provincial cash comes after a commitment from the federal government to extend ferry services in Atlantic Canada and eastern Quebec until 2014.
In November 2010, the federal government announced a $44.7-million investment and part of that went toward extending the Digby-Saint John ferry service.
"Our investment in this vital link strengthens New Brunswick's economic advantage as a leading transportation and logistics hub," New Brunswick Premier David Alward said in a statement.
"This partnership also provides certainty to help workers and businesses grow our communities through new and better jobs."
Dexter told the news conference the fishing industry in southwestern Nova Scotia relies on the ferry to help deliver the catch to markets in Canada and the United States.
"You know we're going to support any service that is sustainable, where we have a partnership, where we have an opportunity to provide a service that creates more economic benefit in southwest Nova Scotia," Dexter said Wednesday.
The announcement comes as residents and businesses in Yarmouth stepped up their campaign to restart a ferry service from their area to the United States.
In 2009, the provincial government cancelled a subsidy that had kept the CAT high-speed ferry running, effectively ending a service that had lasted more than a decade.
"The people in Yarmouth use the Digby ferry, it's an important piece of infrastructure," Dexter said when asked about how Yarmouth residents would feel about Wednesday's announcement.
"It is an important part of the economic link that fishermen throughout southwest Nova Scotia use and in fact the previous ferry in Yarmouth was unable to carry any kind of commercial traffic and that's not the case here."