Nearly seven months ago, on October 18, 2022, Public Works Minister Kim Masland told reporters the Houston government was about to request proposals to conduct an economic analysis of the costs and benefits of the controversial, money-sucking Yarmouth-to-Bar Harbor ferry service.
“It’ll be a very broad overview of the economic impacts of the service,” she explained, adding that a tender would be issued “this fall,” and that the methodology for the study would be finalized by the winner of the contract.
It’s worth noting that, on the same day Masland said she planned to commission that study to determine if the ferry service was worth what it cost, the government extended its lease on the CAT ferry for another year. That, of course, is the vessel privately owned, publicly subsidized Bay Ferries Ltd. uses to provide said controversial seasonal ferry service.
Two-and-a-half months later, on January 4, Masland told reporters after a cabinet meeting that her department was still working on the wording of a call for proposals for the study. “It has taken some time to make sure that we are getting this right. This is a study — a broad economic impact study — that has never been done before.”
That’s not quite true, but we’ll come back to that.
Study or no study, she confirmed, “we expect the ferry to sail in 2023.”
So, there was that.
Then, on April 5 — if you’re counting, we’re now close to six months since the initial announcement — Masland again told MLAs the tender call would be issued “soon.”
“It’s going to look at previous years,” she declared again of a contract that wasn’t yet open for bidding let alone awarded. “I do believe, and I’m very confident in this study, that it will show to government the value of the service and it will show to Nova Scotians if they’re getting the value for the money that they deserve.”
That would be nice.
But it’s now the second week of May. The ferry is scheduled to begin sailing again in a few weeks.
And there’s still no study. Not even a call for proposals…
Last week, I emailed the minister to ask if the tender call had, in fact, been issued when I wasn’t looking. If not, when might that happen?
A spokesperson for the minister didn’t respond to the second part of my question, stating only: “At this time, the Request for Procurement for a broad economic impact study on the Yarmouth ferry service has not been issued.”
Let’s rewind. But not too far. It’s all too rubbed-raw painful.
Last spring, after a three-year hiatus — caused partly by COVID but more by ongoing government and corporate ineptitude — the CAT finally resumed what passed for service.
By then, Bay Ferries had changed its US port of call from Portland, Maine to Bar Harbor at many millions of dollars of great expense to Nova Scotia taxpayers.
The switch was supposed to improve service and goose passenger interest.
It didn’t do either.
In 2018, the CAT’s last full, pre-COVID, pre-crash-and-burn sailing season, the ferry carried ferried close to 50,000 passengers.
Last year, with its new port of call, the CAT transported just 36,151 passengers.
Thanks to a syrupy sweet contract between the previous Liberal government and Bay Ferries, however, taxpayers continue to subsidize Bay Ferries’ lack of service to the tune of $17 million a year whether the CAT sails or not.
And we will do it all over again this year.
No matter what the cost-benefit analysis concludes.
If there is a cost-benefit analysis.
Which there won’t be.
Not this year.
Not that it ultimately matters.
It takes time to come up with terms of reference that will get you the outcome you want.
As for Minister Masland’s claim that “a broad economic impact study” had never been done before…. I would direct her attention to Re-Establishing a Yarmouth-US Ferry?, a more than decade-old, 83-page report commissioned by Darrell Dexter’s NDP government. It’s probably gathering dust on a back shelf in a storeroom in the department.
In 2009, the then-new NDP government had economically wisely but politically foolishly decided to stop pouring public money into the bottomless pit of the ferry service. That inevitably ended the ferry service.
Three years later, with an election looming and the government desperate to win back votes in southwestern Nova Scotia, Dexter appointed an expert panel “to clearly define the requirements for a viable ferry service between Yarmouth and the United States.” Oh, yes, and to give the government cover to turn the subsidy tap back on.
The report’s caveated conclusions were cautiously optimistic:
- A re-established ferry service between Yarmouth and Maine could become commercially viable, but viability hinges on being able to build passenger traffic back at least to the 130-135,000 level [of previous ferry operations]. This is the critical uncertainty.
- The ferry’s business model needs to be built around the passenger’s on-board experience rather than simply offering another transportation route from the US northeast to Nova Scotia. A ‘cruise ferry’ between Yarmouth and Portland… is the only suitable service model.
- The panel’s financial analysis of a potential ferry… projects that the business would break even around the seventh year and achieve a modest profit thereafter.
Before its defeat in 2013, the Dexter government used the “experts” report to justify re-establishing the ferry service. That didn’t save his government from defeat.
After Stephen McNeil’s Liberals sent the NDP packing, his new government made the ferry their own, but it soon pivoted to the model the consultants said wouldn’t work — “another transportation route” instead of a “ferry experience” model. And then it signed that sweet deal with Bay Ferries. Did we mention that?
The panel had projected 95,000 passengers would take the ferry to Nova Scotia in its first year.
The reality: just 35,000 passengers bought passage in 2014 — roughly the same number that took the ferry in 2022.
By year 10 — which is to say next year — the 2012 panel projected the number of passengers could top 130,000.
Don’t hold your breath.
According to its projections, the ferry service would also break even after seven years. During its buildup to profitability, it would incur cumulative losses of $18.1 million.
In its first three years of actual operation, the government spent $62.8 million in startup and operating costs. That was $10 million more than the tourists the ferry carried to Nova Scotia actually spent in the province.
It hasn’t gotten better.
I’ve given up adding the annual losses onto the losses from the year before and the year before that. But you can add another $17 million at the end of this season.
If the government ever does get around to calling for bids for its cost-benefit analysis, and if the winning bidder ever submits a report, and if the government ever releases its report… it still won’t change the reality that the ferry was, is, and will be a bad deal for the public’s money.
A version of this column originally appeared in the Halifax Examiner.
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