Another court rejects Oceanex's challenge to review Marine Atlantic subsidies

The Federal Court of Appeal has dismissed a challenge by freighter company Oceanex to reviewfederal government subsidies to Marine Atlantic, its Crown corporation competitor in Newfoundland and Labrador.

This rejection comes 20 months after the Federal Court rejected Oceanex's original application to have a look at Marine Atlantic's 2016-2017 rates.

The company said the subsidies allowed Marine Atlantic to charge lower rates to customers and create adistorted and unfair market.

The reasons

Oceanex said the federal government had to consider a clause in its national transportation policy to ensure competition is essential when "providing viable and essential transportation services."

The Federal Court ruled it did not have jurisdiction over the rates, since they are set by Marine Atlantic and not directly by the federal government.

It also ruledMarine Atlantic did not need to consider the national transportation policy clause when setting annual rates.

The appeal court disagreed that there was no jurisdiction to hear the case, but agreed with the Federal Court that the policy did not apply to the annual rate setting.

In a guest column on CBC Newfoundland and Labrador in July, Oceanexchairman Sid Hynes said the people of the province hold onto a "powerful Newfoundland myth" that the 1949 Terms of Union "mandated a virtually free transportation link between Newfoundland and Canada."

He claims Marine Atlantic's commercial rates are priced at less than half of its costs, meaning his private company can't keep up despite making more consistent trips between the island and the mainland than its biggest competitor.

In 2016, Newfoundland and Labrador's attorney general, Andrew Parsons, applied to intervene in the court case to weigh in with his opinion.

"If successful, this application by Oceanex seeking an increase to the commercial ferry rates for Marine Atlantic will have a direct and negative impact on the cost of goods in Newfoundland and Labrador," he said at the time.

Oceanex can still appeal to the Supreme Court of Canada.

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