Nova Star Cruises asks for last $1.9M of subsidy for operating bills

Nova Star Cruises, the company that operates the ferry service between Yarmouth and Maine, says it will need the remaining $1.9 million the province earmarked for the service this year.

Mark Amundsen, the president and CEO of the company, said what's left of the $13 million subsidy will be needed to pay the vessel's operating bills.

"We still have two weeks left in the season and we're still operating and those will be used to cover operations," he said.

Amundsen said although he would have liked to see more people use the service this season, the fact that the U.S. passenger count is up seven per cent gives him optimism for the future.

"It's going to take time and patience," he said. "It's just going to take some years to rebuild having a shutdown of four years between services and no marketing during that time period."

Amundsen estimated it would take another three years to turn a profit on the ferry. 

The last day of ferry service for the season is Oct. 14.

'Disappointed with the season'

The Nova Scotia government is "disappointed" with the latest figures released by the operators, who reported another drop in the number of passengers it carried this September compared to last.

The problem is the number of Canadians using the service.

Only 1,662 Canadian passengers boarded the ferry last month. In September 2014, there were 2,951 Canadian passengers. The company blames that on the low value of the Canadian dollar.

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But U.S. citizens aren't exactly flocking to the service because of the favourable exchange rate. The latest year-over-year comparison for September shows only a modest increase in U.S. passenger traffic.

Last month, there were 8,564 Americans onboard compared to 8,184 in September 2014.

Overall this summer, there has been an almost seven per cent drop in ridership. Since June, 48,012 people have used the ferry, compared to the 59,018 people last year.

September is the last full month of service for the Nova Star, which means the company won't come close to its target of 80,000 passengers to break even.

Geoff MacLellan, Nova Scotia's Minister of Transportation, wasn't hiding his disappointment when asked about this year's performance.

"Obviously disappointed with the season this year — as I've said a number of times — because of the idea that we would be in the 80,000 range and we're not," he said Friday.

"That's really impacted the psyche and the sentiment towards the Yarmouth ferry — but next year's a new year."

Reviewing new proposals

So far this year, taxpayers have contributed $11.1 million toward running the service. Since the ferry service was restarted last year, the province has spent $39.6 million helping to keep the operation financially afloat.

The provincial government is currently reviewing proposals from three other companies interested in running the service.

MacLellan said those proposals, including one from the current operators, are being evaluated by staff.

He said Nova Star's inability to meet passenger projection targets will play a factor in his decision.

"We certainly can't ignore the performance and the indicators that we received over the first couple of years, without question," he said.

"We'll give them an earnest look within this process, but certainly there was some concern about what had happened with respect to the projections and then the financial reporting as well."

Earlier this summer, the minister expressed frustration with the company for not providing the province with key financial and spending reports. 

The governing Liberals are committed to keeping the service, but have yet to decide whether the current operators are the best operators.

MacLellan said a decision is near.

"Probably within the next couple of weeks. That's worst case scenario for us," he said. "It doesn't necessarily have to coincide with the end of the season but that looks like that's the trajectory that we're on."