Marine Atlantic cost recovery reaches 70% – Corporation holds annual public meeting

Marine Atlantic’s customer satisfaction levels and on-time performance continue to improve – but the cost recovery targets demanded by Transport Canada continue to soar.

Marine Atlantic’s customer satisfaction rates increased to 77 per cent during the 12-month period ending March 31, 2017, and on-time performance rates improved to 91 per cent.  The vessel reliability rate stood at 99 per cent, and the Newfoundland ferry service recorded its second consecutive year of growth, the first back-to-back passenger increases in almost two decades.

There was quite a bit of good news to report as the Crown corporation held its annual public meeting in St. John’s on November 6.  However, there was one very sobering statistic presented by board chair Kris Parsons and CEO Paul Griffin.  During the last fiscal year, Marine Atlantic achieved a record 70 per cent cost recovery, “falling within the targeted range as directed by the Government of Canada.”  It generated $111.7 million in revenue, while the service cost $209.4 million to operate. The federal subsidy for the year was $94 million.

The cost recovery ratio has risen steadily over the past two decades, climbing from approximately 45 per cent in the late 1990s.  During that period, user rates have soared at triple the national inflation rate – in sharp contrast to tolls on PEI’s Confederation Bridge, which are tied to the cost-of-living index.

During the last federal election campaign, Liberal Leader Justin Trudeau publicly lambasted the Harper Tories for their fixation on cost recovery for the ferry service, and promised that a Liberal government would address the issue.  They haven’t:  Since the election there have been two rate increases at Marine Atlantic – both well in excess of the cost-of-living index.  A third is anticipated for 2018, although it had not been announced as of this writing.

 

– Ted Bartlett

TAA concerned about NL ferry rates

The Marine Atlantic Blue Puttees, a passenger and vehicle ferry, sails under an overcast sky

Marine Atlantic’s MV Blue Puttees approaching the dock in North Sydney, NS.

The cost of moving passengers, autos and freight between Newfoundland and the mainland has been one of those perennial issues that seems to rear its head on a regular basis.  But now the tale has taken a bizarre turn, with a private shipping company launching an action in the Federal Court of Canada alleging that Marine Atlantic’s rates for transporting commercial trailers between North Sydney and Port aux Basques are too low.

Oceanex – an intermodal transportation company operating three large vessels linking St. John’s with Halifax and Montreal – is alleging that the Minister of Transport has exceeded his jurisdiction in approving the current level of ferry charges.  The company claims its rail and trucking competitors have an unfair advantage because of subsidized Marine Atlantic rates, and that those rates are gradually eroding its market share.

Marine Atlantic’s tariff is approved by the Crown corporation’s board of directors, based on a cost recovery formula set by Transport Canada.  The subsidy history dates back to the Terms of Union negotiated in 1948 as the British colony prepared to enter the Canadian Confederation. The intent was to equalize transportation costs for the new province.

Using the circumstances of the time, Term 32 stipulated that the Cabot Strait crossing between North Sydney and Port aux Basques was to be rated as an “all-rail” movement.  In other words, the cost of moving freight was to be equivalent to rail transportation over the same distance – effectively treating the ferry as a land bridge.  Today’s Trans Canada Highway has replaced the railway in Newfoundland, but modernizing the intent of Term 32 should mean that the cost of transporting an intermodal trailer between the two ports by ferry should be no higher than that of hauling it over 185 kilometres of highway. Continue reading “TAA concerned about NL ferry rates”

New North Sydney terminal opening soon

A gleaming new building, two levels, floor to ceiling glass windows.
An architect’s rendering of the new North Sydney ferry terminal building

Marine Atlantic customers will soon be enjoying a new, larger and more convenient ferry terminal building in North Sydney.  Construction is nearing completion on the $20-million state-of-the-art structure, which will replace a smaller 30-year-old facility that had become inadequate to meet modern operational requirements.

Marine Atlantic CEO Paul Griffin says the new building will move the ferry service firmly into the 21st Century, adding that it is really configured around customer needs, while meeting all current security requirements as well.  Mr. Griffin escorted a group of dignitaries, including Transport Minister Lisa Raitt, on a tour of the facility in late December.

Two men and a woman stand in front of a ferry.
Marine Atlantic CEO Paul Griffin (r.) escorted Transport Minister Lisa Raitt on a tour of the new facilities. CBRM Mayor Cecil Clarke is on the left.

It’s expected to be ready for occupancy in late spring, according to Marine Atlantic spokesman Darrell Mercer. He expects passengers will be pleased to have ready access to the amenities of downtown North Sydney while waiting to board.  They will simply have to step out the main entrance to avail of a variety of dining options and other attractions and services just a short walk away.  He said the company has been working closely with the business community as the project unfolded, and suggested there would be mutual benefits for the town, the company, and the travelling public.

The building will offer improved access for walk-on passengers and those connecting with Maritime Bus, and the new location offers much more public parking than was available previously.  The design incorporates all the latest advances in services for passengers with special needs, as well as cutting-edge environmental technology.  It will also have a dedicated lounge for commercial drivers.