Former N.S. premier weighs in on Yarmouth ferry deal
Published Wednesday, March 30, 2016 8:22PM ADT
Last Updated Wednesday, March 30, 2016 8:52PM ADT
As the current Nova Scotia government faces more questions about the seemingly unlimited amount of money it's willing to spend on the Yarmouth ferry, the man whose government killed the original Cat service is acknowledging the decision may have been a hasty one.
“Whether or not the benefits outweigh the costs of this kind of an arrangement will only really be known retrospectively,” said former Nova Scotia premier Darrell Dexter.
Dexter was premier when the province ended the subsidy agreement with Bay Ferries in 2009, ending the original Cat service.
On Wednesday, he acknowledged the importance of the service.
“There wasn't a clear economic development strategy for Yarmouth and for southwestern Nova Scotia, so I think we would have considered it more carefully than we probably did,” said Dexter.
Dexter says he hopes the service is successful and will provide the promised economic boost.
The deal with Bay Ferries has no cap. The province will pay $4.1 million in start-up costs, and $9 million to retrofit the vessel in South Carolina.
This year, the subsidy is $10.2 million. That drops to $9.4 million in year two.
For the remaining years, the province will pay Bay Ferries the total cash deficiency for the year, and a management fee, which has not been disclosed.
Bay Ferries is also entitled to a performance incentive after 2016/17, which will be less than the management fee.
The province also has a $5 million line of credit in place should Bay Ferries default.
Deputy Minister of Transportation Paul LaFleche is defending the deal, saying a government-subsidized operation was the only option.
“We did the best we could,” said LaFleche. “We didn't see anybody who came to us and said, ‘Geez, can we run your ferry and lose money?’”
The Nova Star ferry cost the province about $39 million over two years.
“Everyone wants an affordable, sustainable ferry service – and we don't know if this is affordable,” said Nova Scotia Tory MLA Tim Houston. “We don't even know how much it's going to cost over four years.”
Government says the ferry service will bring economic benefits to southwest Nova Scotia, but department staff are unable to estimate how much.
“If we were operating this totally on a break-even, economic development basis, we would have paid a lot more attention to that,” said LaFleche.
With files from CTV Atlantic’s Sarah Ritchie.