Nova Scotia

Bay Ferries has been paid $1.17M each year to operate Nova Scotia-Maine ferry

Bay Ferries has been paid $1.17 million a year to operate the high-speed ferry between Nova Scotia and Maine, even in years when the ship has not sailed.

Company released fee information following court ruling last week

The Cat ferry sits tied up on Yarmouth's waterfront in this file photo. This will be the third season in a row that the ferry has not been able to sail between Nova Scotia and Maine. (Michael Gorman/CBC)

Bay Ferries has been paid about $1.17 million a year to operate the high-speed ferry between Nova Scotia and Maine, even in years when the ship has not sailed.

The company released the information Monday afternoon, about a week after it and the provincial government lost a court battle with the Nova Scotia Progressive Conservatives to keep the fee secret.

"The management fee represents the company's margin for undertaking the work," according to a news release from Bay Ferries.

"The management fee equates to about five per cent of all costs of the ferry operation in a normal operating year."

According to the company, the deal it signed with the provincial government in 2018 sees it paid $97,500 a month, which works out to $1.17 million a year. That was an increase from the initial deal in 2016, when the company was to be paid $65,000 a month. It was adjusted two years later "due to substantial additional duties required of the company which were not contemplated in the original agreement," according to the release.

Agreement includes incentives

The agreement also includes incentives that would see the company earn up to, but not more than, double the fee in a given year based on it achieving various performance grades, although that has not come to pass.

In 2019, the Tories took the company and government to court in an effort to get the information after the Liberal government ignored a ruling from the province's privacy commissioner that the information should be released. The privacy commissioner's rulings are not binding.

That ruling followed attempts by the Tories and reporters to get the fee through a freedom of information request. The Transportation and Infrastructure Renewal Department refused that request four years ago.

Premier Stephen McNeil argued that releasing the information could create a chill on private companies wanting to do business with the province, although the privacy commissioner at the time said that a certain level of transparency was the cost of doing business with government.

The government's argument in court that releasing the management fee would "harm the financial or economic interests of a public body or the government of Nova Scotia" was not accepted by a Nova Scotia Supreme Court judge.

The company's CEO, meanwhile, had expressed concern that Tory Leader Tim Houston and his party were overly politicizing the issue at the expense of the business trying to gain traction. In court, Bay Ferries argued that the information was commercially sensitive and releasing it could harm the company's bottom line.

'The number is embarrassing'

Houston said he was pleased to see the company finally release the information.

He said the ruling last week by the court proved that the arguments advanced by the government and Bay Ferries didn't hold water.

"If it was true in the eyes of the court that it would hurt the company's business, then it wouldn't be disclosed," he told reporters Monday.

"I think what we now know is the number is embarrassing."

Houston said the service has failed to deliver the benefits to the economy that were hoped for when the contract was signed in 2016.

A spokesperson for premier-designate Iain Rankin said he wouldn't comment Monday on the information.

Plagued by challenges

Since taking over the service in 2016, Bay Ferries has been plagued by challenges.

The 2021 and 2020 seasons were both cancelled due to the COVID-19 pandemic. The 2019 season was cancelled when the port of call in Maine was switched from Portland to Bar Harbor and things were not ready on the U.S. side to receive the ferry.

The government budgeted $16.3 million for the service last year. It cost $17.8 million the year before, a figure that included costs to renovate the ferry terminal in Bar Harbor.

In prior years, although the ferry sailed between Yarmouth and Portland, it experienced mechanical problems that, at times, reduced the number of crossings. Passenger counts were also lower than hoped in the initial years as Bay Ferries attempted to rebuild the service.

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