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”
