The federal government will help fund the dredging of the harbour in Sydney, N.S., opening it to private container business, Prime Minister Stephen Harper announced Friday.
Harper said the federal government will spend $19 million over the next three months to dredge the harbour. The project will cost $38 million, with the Nova Scotia government kicking in up to $15.2 million.
The project will create jobs, he said, and will ensure the harbour can take full advantage of the economic opportunities available to it.
"By dredging Sydney Harbour, we can unlock Cape Breton's true economic potential," Harper said in a news release. "This will allow bigger ships into the harbour and create jobs in Cape Breton for the long term."
Federal government support, provided through the Enterprise Cape Breton Corporation, will contribute to dredging, or deepening the harbour, allowing Sydney to receive the largest possible container ships into the port and opening up trade opportunities for Canadian businesses.
It is estimated additional cargo ship traffic will generate thousands of new jobs over the short and long term.
"Our government is delivering for Cape Breton by deepening the Sydney Harbour and positioning it as a world-class port," Harper said. "We are making this important investment today to make sure Sydney Harbour can take full advantage of the economic opportunities ahead."
'A great day for the people'
Nova Scotia Premier Darrell Dexter said the project will help keep young people in Sydney and improve the economy of Cape Breton Island, and the whole of Nova Scotia.
"Today is a great day for the people of Cape Breton," Dexter said in a release.
"At a time when investing in good jobs and economic growth is more important than ever, we saw this project as an opportunity to create real and positive change for the economy of Cape Breton."
The provincial funding covers 40 per cent of the expected dredging costs. The province had said Ottawa would have to pay for 50 per cent.
The Cape Breton Regional Municipality has already committed $2 million to deepen the harbour channel.
Proponents of the project say dredging the harbour will transform Sydney into a world-class shipping depot.
Last month, federal Transport Minister Chuck Strahl rejected the request to partially fund the project.
In a letter to the mayor of the Cape Breton Regional Municipality, Strahl said federal funds were available only for dredging port facilities or ferry terminals the government owns or operates.