We need to talk about old political myths and subsidized transport

A constant refrain I hear across Newfoundland and Labrador is we need to have real conversations. New choices need to be made. We can't continue to do things the way we always have.

Sounds positive but I worry it is nothing more than idle chatter.

I see so much misinformed thinking driven by myths and age-old political opportunism, threatening the future of our employees, those who would invest in businesses here and Newfoundland and Labrador's residents.

My intent is not to be hysterical, alarmist or opportunistic. In fact, if I believed government's policy choices were truly better for the people of the province, I would not have taken Oceanex's issue before the Federal Court nor would I raise it in the court of public opinion. My family lives here; I want us to make better public policy choices.

Please read this as a critique of our political ecosystem which rewards elected officials for sticking with flawed patterns of behaviour, not a condemnation of politicians. What we encounter in marine transportation is illustrative of what's wrong with the way decisions are made.

A long history

Oceanex, including predecessor companies, has served as a key transportation infrastructure provider to the island for more than 100 years and is responsible for employment of more than 1,000 people. Oceanex's key marine service competitor is Marine Atlantic Inc., a federally owned Crown corporation.

A powerful Newfoundland myth is that the 1949 Terms of Union mandated a virtually free transportation link between Newfoundland and Canada. There is a constitutional obligation for a Gulf Ferry service, but its public policy intention was never to force out or constrain other services by underpricing the Gulf route.

Without a viable option to Marine Atlantic, I would suggest that as residents, we can all look forward to even emptier shelves.

Prior to 1949, the Government of Newfoundland operated the Newfoundland Railway, including coastal steamship services and the Gulf ferry service. The federal government's goal to integrate the ferry service within the existing publicly owned Canadian railway system meant rates would be determined pursuant to its established regulatory framework.

Our own "Father of Confederation" Joey Smallwood, in a Sept. 27, 1949 appearance before the Royal Commission on Transportation spoke to the intention, clarifying:"Newfoundland has been placed in the Maritime region and for the purposes of railway rate regulation we are in that region and we are to get exactly what the region gets, no more and no lesswe stand or fall by what the maritime region may generally get."

A myth was born

With the passage of time and sleight of hand of political opportunism, the "service was meant to be free" myth was born. By the mid-2000s, the federal government opened the treasury to Marine Atlantic. A study commissioned by Transport Canada in December 2014 found that using the very substantial federal subsidies, Marine Atlantic 's commercial freight services are priced at less than half of its costs.

You might well ask "so what"?How does that harm provincial residents?

With taxpayer money, Marine Atlantic carries over 50 per cent of the commercial freight, dominating the market. Complaints abound about trip cancellations and the grocery shelf impact.

Oceanex's ships, with proven reliability greater than 99 per cent, also bring grocery items so the shelves are not completely empty.

Public policy choice? Consider how to encourage rather than penalize our reliable service provider; without a viable option to Marine Atlantic, I would suggest that as residents, we can all look forward to even emptier shelves.

Climate change is another hot topic and again, our public policy choices are counter to the action that objective analysis suggests. Government's own studies conclude that marine is a better environmental choice and yet, public policy choices are pushing commercial freight traffic to the truck option via Marine Atlantic.

Oceanex has twice challenged the prevailing orthodoxy and practice of subsidized rates in Canadian courts and is awaiting an appeal ruling.

Successive governments have not been prepared to be honest with constituents regardless of evidence and are seemingly oblivious of the economic and environmental consequences of the status quo. Over time no business can survive in an anti-competitive environment.

So back to where I began. If people want to have a real conversation about the challenges we face, here is a case study for you to look at.

It has all the hallmarks of what's wrong with the public policy decisions we make and the problems they create.

Anyone willing to talk?

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