Nova Star: Rough seas behind – challenges ahead

Returning in 2014 after a four-year absence, the seas have been rough and the challenges great for the ferry service between Yarmouth and Maine. Traffic volumes were lower than anticipated, costs higher than expected, and the owners were unable to arrange an off-season charter for the vessel. As a result, the first season’s operation consumed the entire provincial subsidy that was supposed to last for seven years. The government decided to contribute more funding to the cause – a portion of which was not immediately disclosed, ultimately landing Rural Development Minister Michel Samson in political hot water. The grand total has now surpassed 28 million dollars. Unlike other ferry services in this region the Yarmouth-Maine run is completely supported by the government of Nova Scotia, with only minor federal assistance and none from the state of Maine.

The Nova Star will be back this year for a second season – one that many see as being crucial to the long-term future. The challenge in 2015 will be to increase traffic, reduce costs, and lessen the Province’s subsidy to what taxpayers would consider an acceptable level.

On the positive side, this year’s schedule is already known, so reservations can be made well in advance, as opposed to 2014 when bookings could be made and confirmed only days before the first sailings. This is important, as many travellers and tourists – especially the tour bus market – plan many months in advance. Fuel costs, a major expense last year, should be lower, reducing operating expenses marginally.  Cheaper gas prices and the lower Canadian dollar should encourage more American tourists to come to Nova Scotia, which could be a source of additional traffic for the Nova Star. However there is a downside here, as fares are in US dollars which may result in fewer Canadian customers. As well, provisions and fuel are purchased at the US port.

The ferry also faces a major challenge competing with the highway on cost, convenience, and the time to get there. Driving time from Halifax, for example, to the Boston area is only about twelve hours. Highway competition makes it difficult for the ferry to establish a solid base of truck traffic – a mainstay for other ferry services, especially in the shoulder season.

It is difficult to measure the contribution the ferry made to tourism or provincial revenue last year.  Certainly it made a substantial difference in the Yarmouth area and all of southwestern Nova Scotia, and that is no doubt why the Province chose to continue its funding.  But the government will face some tough and potentially unpopular decisions if 2015 does not bring a substantially improved financial picture.

Chronicle-Herald columnist Rachel Brighton put it this way in her column on January 24: “If our dollar stays low and Nova Star cruises can’t entice enough American passengers aboard with their greater spending power, then it will be time to call it a day. If that should happen it will also be time for Yarmouth’s business community and political leaders to find an alternative economic stimulus.”

In a late breaking development, the Province announced on February 3 it is prepared to offer an additional $13 million in support for the 2015 season, but indicated it may issue a new tender call for subsequent years.

– by Donald R MacLeod

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