Yarmouth ferry's CEO says Jamie Baillie's comments bad for business

The CEO of the ferry service that will soon link Nova Scotia with Maine is accusing the province's Opposition leader of destabilizing the business.

In a letter to Progressive Conservative Leader Jamie Baillie, Bay Ferries CEO Mark MacDonald says Baillie has used strong language to misrepresent the company's level of accountability.

MacDonald also chided Baillie for saying the company "hosed" the government, and he took issue with Baillie's description of the ferry service as a "boondoggle" and a "fiasco."

The CEO said Baillie's harsh words have hurt the 75-year-old business.

"Your comments have been widely reported and have further destabilized the business environment around this service, which is extremely challenging at the best of times," MacDonald wrote.

"You have fundamentally misrepresented our company's position concerning our accountability around this ferry service ... We accept our obligation to be fully accountable to all governments with which we do business."

Baillie has been critical of the Liberal government's bid to reboot the ferry service, saying he doesn't want a repeat of what happened with the previous operator, Nova Star Cruises.

That company was dumped by the province last fall after it failed to meet passenger targets and soaked up $39.5 million in subsidies in just two years of operation. The main subsidy was supposed to last seven years.

Baillie has said Premier Stephen McNeil should require Bay Ferries to release monthly passenger updates something MacDonald has refused to do.

'Public scrutiny is to be expected'

Nova Star was required to provide cash-flow reports, weekly passenger booking reports and the number of vehicles per sailing, in addition to its regular financial statements.

"In short, when so much public money is involved, public scrutiny is to be expected," Baillie said in a letter to MacDonald, released earlier this week. "When the government hides its actions behind a wall of secrecy, it serves no one's interest."

MacDonald said that line of argument was "great for political discussion, (but) terrible for the business."

The Liberal government announced in March that taxpayers would pay at least $32.7 million over the next two years to refloat the ferry service, based in Yarmouth, N.S.

That commitment was part of a 10-year deal that will provide millions more in provincial subsidies.

Bay Ferries later signed a lease with the U.S. military's Sealift Command for a high-speed vessel.

The ferry, renamed The Cat, has completed sea trials off South Carolina and is headed north to Nova Scotia, MacDonald said.

Cash deficiencies to be covered by province

The government has admitted it is taking on most of the financial risk in the ferry deal. And the transport minister has said the deal is a rich one for a province facing budgetary pressures amid a sluggish economy.

A clause in the contract says any cash deficiencies will be covered by the province.

Provincial officials have estimated an ongoing annual subsidy of around $10 million on a financial model projecting 60,000 passengers a year.

When the Bay Ferries deal was announced, Tory finance critic Tim Houston called it "stupid."

The Cat was the name of the money-losing ferry being operated by Bay Ferries in 2009 when the former NDP government effectively killed the service by eliminating its annual subsidy.

The new service is expected to run from June 15 to Sept. 30 with daily departures from Yarmouth and Portland, Maine.