N.S. faces $3M bill for defunct ferry – Metro US

N.S. faces $3M bill for defunct ferry

The province must pay Bay Ferries $3 million this year to not operate the defunct Yarmouth CAT Ferry.

“I have no choice,” Tourism Minister Percy Paris said Thursday.

One year ago, the Tory government announced a Bay Ferries subsidy of up to $12 million. At the time, it was not disclosed the province would have to pay $3 million of that if it didn’t subsidize the company again this year.

When the NDP rejected Bay Ferries’ desired $5-million to $10-million subsidy this fall, it was suddenly on the hook for sending six no-question-asked cheques of $500,000 to the company.

“We have no choice, no legal wiggle room but to honour that agreement,” Paris said.

“I couldn’t quite understand why we would have agreed as a province to give somebody money for not providing a service to the province of Nova Scotia,” he added.

When the contract was signed on Jan. 22, 2009, an election was looming and the NDP had a large lead in the polls. The Tories wanted to keep the ferry alive for at least one more season.

“That was there basically for (Bay Ferries’) protection in the event that the other partner, that being the government, pulled the plug,” Tory Leader Karen Casey said.

Casey added they wanted to prolong the ferry’s life — and its economic benefits — until a transportation study due this spring could chart a way forward. Casey said they wanted a contract to keep the ferry going “regardless of who the government was … until another alternative was found.”

However, when Paris asked Bay Ferries for a business case to support them, he paraphrased them as saying “we can’t give you a good business case as to why you’d want to continue this marriage with us.”

The government walked away and Bay Ferries subsequently received its termination fee.

The Tories and Liberals both attempted yesterday to shift blame away from the previous government and onto the NDP for not supporting the ferry. They say the move will have a devastating economic effect on the province.

Termination clause
The Progressive Conservative caucus is calling for Percy Paris’ resignation over the $3 million given to Bay Ferries. The Tories say Paris clearly didn’t know about the termination clause in the contract when he rejected a Bay Ferries’ subsidy. Paris told reporters he was aware of the clause and it was part of his considerations. The government maintains it could not afford the subsidy.

More from our Sister Sites