The Nova Scotia government announced Thursday that it recently paid $2.1 million to Nova Star Cruises, which operates a ferry between Portland and Yarmouth, Nova Scotia.
That allocation means the province has given the company $21 million in just a few months, the total subsidy amount that was expected to be meted out over a seven-year period to restore ferry service between the two cities. Service between Portland and Yarmouth stopped in 2009.
Nova Scotia Economic Development Minister Michel Samson told reporters in Halifax after a Cabinet meeting that he won’t rule out spending more in the future.
The ferry, which began operating on May 15, has been slow to generate revenues. It ran at about 10 percent of its 1,215-passenger capacity in June, according to the city of Portland. The trickle of passenger revenues means the company is using its subsidy faster than it or the Nova Scotia government had planned, said Toby Koffman, a spokesman for Nova Scotia Department of Economic and Rural Development Tourism.
“The long and short it: The ferry service had not achieved the numbers that were expected as part of this plan,” he said.
Mark Amundsen, president and CEO of Nova Star Cruises, said in a statement that the company continues to work with the province to re-establish the service after a four-year hiatus. He said the startup costs have been “significant” and that the company is working to build ridership.
“There have been several significant challenges so we know it will take more than the first year to rebuild,” he said.
The state of Maine has yet to provide any financing for the service despite pressure from the Nova Scotia government to help.
Nova Star Cruises has been working since last fall to secure a $5 million line of credit from a Maine bank. Officials at the Finance Authority of Maine have discussed the possibility of guaranteeing the loan.