Drowning in red ink, Port of Sydney Corp. thrown a lifeline
Money left over from 2012 harbour dredge will be used to cover $600,000 deficit due to lack of cruise ships
Cape Breton Regional Municipality and the federal government have thrown the Port of Sydney Development Corporation a lifeline.
The port is facing a $600,000 deficit this year after the COVID-19 pandemic shut down the cruise ship season.
CBRM council has voted to allow the port to use reserve funds created by the dredging of Sydney Harbour in 2012, but two councillors questioned whether the port administration has first done enough to cut costs and increase revenues.
"My problem ... is that to basically turn over all that money and it can just be gone if nothing else is achieved," District 10 Coun. Darren Bruckschwaiger said during discussion of the port's finances at CBRM's inaugural council meeting on Tuesday.
District 8 Coun. James Edwards said he supports the port, but he was the only councillor to vote against allowing access to the special reserve fund.
"There was some pertinent questions asked, but I think there was lots of opportunity for more explanation," he told reporters afterwards.
The federal, provincial and municipal governments and Nova Scotia Power created a $38-million fund to dredge Sydney Harbour eight years ago to accommodate larger cargo, coal and cruise ships.
There was some money left over after the project finished and the port has been allowed to use it for various purposes.
Some of the money was supposed to be used to fix the shore-based navigational aids that were no longer aligned with the newly dredged channel, but eight years later, the Coast Guard has still not undertaken that work.
The Coast Guard said in an email that the navigational aids in Sydney Harbour currently mark the channel safely and it will maintain them in future.
The federal government had required the port to set aside $800,000 of the $1.1 million remaining in the reserve fund for navigational aid costs, but has since given its approval to use that money to cover this year's deficit.
Port CEO Marlene Usher said cruise ships and passengers supply the majority of the port's revenues, but there have been none this year.
"Hopefully we will get some cruise [ships] next year, but at this point I'm not very optimistic," she said.
Some staff have been laid off and others have taken a 20-per-cent pay cut or foregone raises.
Usher said there is no fat left to cut, but the port needs to remain open to take delivery of gasoline, diesel and heating oil for all of Cape Breton.
"Fuel vessels come in every week and if we don't have the doors open and the lights on, that would be catastrophic for the island," she said.
If not for the pandemic, the port's current finances would be at least as good as last year's, Usher said.
"You'll see when we present our audited financial statement at our AGM that we were $700,000 over budget, to the good, so we've been responsible and we'll get back there," she said.
Cruise ship traffic is booked in Sydney up to 2026 and it will return eventually, she said, but in the meantime the board has to find new revenues to ease reliance on one industry.
'Need to diversify'
"We need to diversify that area," Usher said. "We need to make the port a part of downtown and downtown a part of the port."
For example, extending the boardwalk would allow pedestrians easier access to shops on the dock that are normally open for cruise ships.
Meanwhile, the port is losing revenue after announcing the opening of its second cruise ship berth earlier this year.
Usher said there are vessels that would use the new dock, but there are unexpected difficulties with power at the facility.
A new financial plan will be presented to council in the new year, she said.
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