By Tom Peters

The Nova Scotia government has committed $21 million over seven years to revive the seasonal Yarmouth to New England ferry service.

The province’s contribution is contingent on a contribution from the federal government, the municipality of Yarmouth and the requirement for a private operator to commit to operating the service.

The province’s decision to support the service was based on a report developed by a panel of experts appointed in April.  The panel said a cruise ferry model operating between Yarmouth and Portland focusing on passengers’ on-board experience could be commercially sustainable.

“I have said all along that the province would support a ferry service that could stand on its own, a service that could be successful and profitable,” said Premier Darrell Dexter. “We now know that a ferry could exist with the right model and the right partners.”

Ferry service between Yarmouth and Maine ended in 2009. Bay Ferries of Charlottetown operated the high-speed Cat ferry between Yarmouth, Portland and Bar Harbor. The operator said it could not continue to operate the money-losing service without a government subsidy. The experts’ report said decreased ridership and increased fuel costs lead to the province covering losses on the service of almost $7 million annually. The province refused to provide a requested subsidy for 2010.

However, the report said that with the right business model, a ferry service that would offer passengers a cruise-ship type atmosphere with dining and entertainment, etc., could become viable over a period of time.

The report indicates a new operation would require $30 million to $35 million investment by governments and private partners to repair and upgrade the federally owned Yarmouth terminal, help with start-up costs and marketing and cover early losses until the service is profitable, estimated in the seventh year of operation.

To reach profitability, the service would have to serve about 130,00 to 135,000 passengers annually. By way of comparison, in 2009 approximately 76,000 passengers had used the service. In the late 1990s and early 2000s, passenger numbers ranged between 100,000 and 150,000.

The premier said he would be looking to Ottawa to upgrade the terminal. Defence Minister Peter MacKay, the province’s only federal cabinet minister, said the federal government would be open to discussion on the issue if an operator is found and the project materializes.

Yarmouth Mayor Phil Mooney was happy to hear the announcement but hedged his comments on a Yarmouth financial commitment.

“I think there are other things we can do, such as with taxes on the terminal. There is a role the municipalities have to play but to make a big financial commitment we are not in the same ballpark financially as the province or the federal government. But it is something that has to be done and we see it as important and we will be coming to the plate but I can’t tell you in what amount.”

The province will put out a call for expressions of interest for a potential private operator. Mayor Mooney believes there will be operators with an interest especially now that the province is involved. He said he would like to see the service in place by 2013 but most likely will not come to fruition until 2014.