Halifax has earmarked $13 million of federal public-transit funding announced Thursday for a high-speed ferry service.

The money for a fast ferry connecting Halifax and Bedford represents almost all of the $14 million in federal transit funding allocated to Nova Scotia.

A fast ferry will turn Halifax Harbour into a low-maintenance highway, said Halifax Mayor Peter Kelly.

"There's a lot of potential here to transform that body of water that's underutilized," he told CBC News.

"It's what joins us, not what separates us, and we have to make sure that we never forget you don't have to plow it, you don't have to salt it, you don't have to maintain it. It's there. It can be used."

Kelly said the council of the Halifax Regional Municipality has set aside $8 million for the HarbourLink project, which is estimated to cost about $30 million in total.

He said he hopes the provincial government will provide the rest of the money and the land needed for a ferry terminal in Bedford.

Ferry to be running within two years

David McCusker, the municipality's manager of traffic and transportation services, said he's confident the project will zoom along, and two fast ferries will be in the water within two years.

"We're pretty confident there's a spot in Bedford that we can pull into," he said.

McCusker said the trip across the harbour would likely take 15 minutes, with the ferry leaving every half-hour.

"But that's part of the work we still have to do, to kind of fine-tune the design, to pick the right speed and when the departures go," he said.

The main ferry terminal on the Halifax waterfront can handle one more route, McCusker said, though it will require some upgrading to accommodate more commuters.

A recent study prepared for the municipality found that continuing urban sprawl has fuelled car-dependency, leading to increasingly severe traffic jams and environmental impacts.

The report by the GPI Atlantic research group urges the municipality to look at ways to improve public transit. It found that many commuters are willing to switch to mass transit if it is fast and convenient.

At the same time, the Halifax-Dartmouth Bridge Commission is recommending a tunnel or third bridge to ease projected traffic growth.

McCusker said the idea of a third fixed link is a long-term project, unlike the fast ferry.

"For the fast-ferry, the requirement is here today, and the funding is getting itself in place," he said, "so it's a short-term project."

The federal government says the remaining $1 million in funding announced Thursday will go to various transit authorities around Nova Scotia, based mainly on ridership.

The money is to be put in a trust for use over the next two years.