Lower Subsidy, More Oversight for Yarmouth Ferry

Government has reached an agreement with Nova Star Cruises Limited for the ferry's 2015 season, and will ask Nova Star and others for proposals to operate the ferry service in 2016.

Government will provide $13 million to Nova Star to support the 2015 season. The agreement comes with increased oversight by government, and more reporting and local purchasing by Nova Star. Maine is also expected to contribute.

"Government's subsidy for 2015 is less than half of what was provided last year," said Economic and Rural Development and Tourism Minister Michel Samson. "Nova Star has a plan to get costs down and revenue up, and they've told us they can operate the season with this amount."

Since Maine benefits from the ferry, government expects the state to deliver on its commitment to contribute $5 million.

"The ferry is bringing people and goods to Maine, too. Governor Paul LePage committed before his election that Maine would contribute and he's on record saying he'll honour this commitment," said Mr. Samson.

For 2016, government will request proposals from Nova Star and other operators.

"We are asking Nova Star to come back with the most cost-effective plan possible for the ferry service. We're encouraging other operators to submit proposals, too," said Mr. Samson. "Our goal is the right ferry service at the best price."

Industry experts will work with government to develop criteria and evaluate proposals. The request will be issued in the spring.

Nova Star Cruises is required to do more reporting to Nova Scotians and government. A rigorous monitoring program is in place to oversee funding and progress. Developed and managed by KPMG and staff, it will allow government to identify issues early so the company can make corrections. The monitoring and reporting requirements include:

• random and year-end audits
• funding provided only after approved expenses and future costs are verified
• immediate reporting of budget changes
• monthly review of general ledger
• oversight of management salaries

Nova Star is required to publicly report its passenger numbers within 15 days of the end of each month.

Government will post funding provided to Nova Star on its accountability website at the beginning of each month. The agreement is available at novascotia.ca/econ/ in the initiatives section.

During its 2014 sailing season, 59,000 passengers travelled on the Nova Star ferry. Those visitors spent an estimated $13 million throughout Nova Scotia. The number of New England visitors to Nova Scotia grew by 19 per cent by October 2014.