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International Ferry Link to the United States - Growth of NS #1 Service Export

February 7, 2017

“It is critical that a new Yarmouth Ferry actually ply the waters of the Gulf of Maine and that government support that effort. Government must be sensitive to these links as major economic development tools, particularly for tourism. We need to make Nova Scotia as easy to reach as possible.”
– PC Party Platform 2013

“The NDP is pleased that after hard work by all involved, the Yarmouth ferry is positioned to enjoy a long-term, sustainable future based on the cruise ferry model. The United States is building a strong marine highway system. The NDP agrees that Canada should also recognize the economic and environmental benefits of improving the country’s marine highways.”
-NDP Platform 2013

We will re-establish a viable and sustainable ferry service between Southwest Nova Scotia and New England.”
-Liberal Party of NS 2013

When the ferry was cancelled in 2009 the economic and social impact was tremendous. In fact, in many ways the impact is still being felt as the sector tries to build confidence outside the province that a link is in place and Nova Scotia is open for business.

The decision was ill considered in 2009 and the political fallout was reflected in the 2013 election, even though a last-minute announcement confirming a commitment to a new ferry was made by the same government that cancelled it.

The first operator and the first deal with Nova Star was not good for Nova Scotia, however, we now have a qualified Atlantic Canada company with a proven track record and a strong commitment to the region.

This piece of transportation infrastructure into the United States has tremendous value for Nova Scotia and we believe will continue to prove itself over the coming years. The International Link into a market of 350 million people provides us with an incredible opportunity to attract new business outside the traditional travel periods, with niche market development.

The unfortunate part of this story is that, once again, the International Ferry has become a political issue through no fault of the hard working tourism operators around the province.

It is incredibly ironic that during the 2013 Election Campaign all parties committed to re-establishing the International Link. In fact, all parties were unequivocal in their commitment to re-establishing ferry service for Nova Scotia. The fact remains that no ferry operates without a subsidy in Nova Scotia. The ongoing commentary from political parties around cancelling the service, without fully explaining or providing details on what specifically they will do, appears to be nothing more than opportunistic politics.

This negative commentary, complete with the recent statements in the press, is being transmitted directly into the US market and to key partners. This approach diminishes our Province and the International ferry service and could not come at a worse time as efforts to build 2017 business are underway.

What Nova Scotian does not want our government to make strategic investments, good deals and be fully accountable? In this case, we need metrics that clearly show the return on investment for Nova Scotia, and a full economic impact study needs to be ongoing to allow immediate and long term benefits to be measured and shared. This is not an approach that should apply just to the International Link. For too long in Nova Scotia we have seen significant investment in sectors without any ROI; payroll rebates in the millions being offered, and too often companies folding shortly thereafter. This is the kind of economic development we have grown accustomed to and it does not work.

The International Link and the impact of this infrastructure is not being clearly explained or understood. Here are some hard facts to put the investment into perspective:

  • During 2016, Bay Ferries Ltd. (BFL) spent approximately $11 million in direct operating expenses for this service in Canada, the majority of this being spent in Nova Scotia.
  • Approximately 70 people are employed locally in the Yarmouth Region and 44 Reservation Agents are employed at a Contact Center located in Halifax. The firm’s marketing agency is a Nova Scotia company.
  • The ship’s crew – approximately 25 employees – were housed and provided for in Yarmouth, with basic supplies almost exclusively sourced in the region.
  • Food and beverage supplied onboard the ferry was represented by over 50 local producers and suppliers from all over Nova Scotia.
  • The onboard Gift Shop featured over 40 local producers and suppliers, including wineries, breweries, distilleries, as well as local artisans and crafters from all regions of the province.
  • 35,551 passengers travelled on the ferry in 2016 (following a very short start-up period).
  • 2500 room nights were booked by the company’s contact centre and another 165 booked online. This does not include the majority of people who would have booked direct on their own.
  • 90% of all accommodations booked by the ferry operator were for overnight stays in Nova Scotia, including 40% outside the southwest region into other parts of the province.
  • Average length of stay for passengers arriving on The CAT is 8 days while average length for other modes is 5 days( Tourism Nova Scotia).

The above facts don’t take into account the multiplier effect of tourism. According to the World Travel and Tourism Council, tourism expenditures have the highest multiplier effect in the economy – with every $1 invested another $3.2 is generated in the community. The cultural and social impact of tourism is also incredibly significant. This access point into a rural area of the province also changes the economic dynamic and is important as rural economies try to re-define themselves.

The ongoing dialogue and sound-bites around the International Link is affecting confidence by the travel trade operators who book business 1-2 years in advance. It is also eroding public confidence in the tourism sector. Political leaders opposing the link now should be very clear on what they would do differently from what they said in 2013 and what a “good deal” would look like for Nova Scotia.

The Tourism industry is on the rise – global conditions are good and there is a growing understanding of tourism’s broader economic impact. Tourism receipts in Nova Scotia are nearing $2.6 billion dollars annually, generating over $300 million in tax revenue for all levels of government – money used to fund social services like health care and education. Tourism is one of the few revenue generating industries of that scale and is currently Nova Scotia’s #1 Service Export. With a goal to increase annual receipts to $4 Billion for the Province, the investments being made in tourism are nominal when compared to the return. From the vantage point of the 40,000 people employed in the tourism sector the majority believe marine access into the lucrative US market makes a great deal of sense.

The infrastructure required to get people into the province is crucial to the long-term sustainability of tourism and trade. We need a model for intermodal travel that best serves visitors to our province. The conditions of our roads, our signage, our ability to attract new airlines and our use of rail and marine access, are all part of a broader transportation discussion we need to be having. It’s time that we put our energy into making the International Link an incredible success for the province, and for all political parties to say what they mean and mean what they say.