Nova Scotia officials revealed big news for the province and Maine on Aug. 13: They will negotiate with STM Quest Inc. to restore ferry service between Portland and Yarmouth, N.S. That connection has been missed by businesses and the tourism industry since Bay Ferries Ltd. stopped operating its high-speed ferry, The Cat, in 2009.
Nova Scotia Premier Darrell Dexter, who took office in 2009, has been trying for a while to find a solution. A ferry service from Yarmouth, N.S., had been in continuous operation since 1956, and the sea link between the two coasts extends back to the 1880s. It’s an important route not only for the tourism industry but commercial freight.
In April 2012, Dexter announced a panel that would study the requirements for a viable ferry service. In September, he pledged to find a ferry operator and backed up his words with a financial promise — $21 million over seven years to subsidize future ferry operations.
His efforts may now bear fruit. STM Quest, based in Eliot, Maine, says it hopes to launch the Nova Star Cruises ferry service beginning in 2014, if negotiations are successful.
The effects of the ferry service have been measured more in Nova Scotia than Maine. One 2012 report by an independent, expert panel showed tourism declined dramatically in the Yarmouth and Acadian Shores region as ferry traffic fell between 2002 and 2009. The panel estimated a re-established ferry would generate an average of about 30,000 to 50,000 net additional tourists to Nova Scotia annually.
While it’s possible for the ferry to eventually turn a profit, it should not be viewed as a panacea for Nova Scotia’s economic challenges. The report concluded stating, “The economic spin-off, while important, would not by itself be transformative.”
It’s reasonable to assume a similar effect on Maine. Though it’s clear the ferry is more critical to Nova Scotia’s economy than this state’s — as the ferry previously drew more people to Nova Scotia’s shores than vice versa — Portland and the region could certainly benefit from a net gain of visitors. Maine port, tourism and economic leaders have said it makes sense to restart the ferry service as the economy grows.
Renewing operations will have its challenges, of course. The panel estimates the ferry could likely draw 95,000 passengers its first year, increasing over time to 133,000 by year 10. (About 75,000 passengers boarded The Cat in its last year of operation, compared with 330,000 during the peak year of 2002.) At this rate of growth, the ferry service would likely experience five to six years of operating losses before beginning to earn a profit.
Achieving that growth model would require a rigorous investment in marketing, competitive fares, improvements within the on-ground tourism sector, upgrades to ferry terminals and start-up funding from the Nova Scotia government. In addition, the boat should be a “cruise ferry” to better sell the passengers’ on-board experience.
Maine can help mitigate the risk of the ferry service failing again.
Gov. Paul LePage has offered to work with the company to learn how Maine can help — whether by using marketing dollars to promote the ferry service, designating bond money to upgrade Portland’s waterfront if necessary or assisting the company in securing capital. LePage has not said whether he would support direct subsidies, but there’s no precedent for him to provide that type of financial assistance. While Nova Scotia and Canadian governments subsidized Bay Ferries beginning in 2006, Maine never did.
Those who argue the state should not help at all might not realize the extent to which the ferry service provides a public benefit. They might also forget that nearly all modes of transportation are subsidized by state and federal governments — roads, bridges, airports, metro buses. The Maine State Ferry Service, for example, is run by the state Department of Transportation.
If a ferry between Nova Scotia and Portland will be profitable in six years, and the Nova Scotia government can justify using tax dollars to invest in the service, expressing enthusiasm and a willingness to help is not a controversial step for Maine to take.