PORTLAND — A more-than 30-year tradition of ferry service between Portland and Yarmouth, Nova Scotia, seems doomed following the announcement last week that Bay Ferries Ltd. has terminated its seasonal service.

Bay Ferries President Mark MacDonald said in an e-mailed statement Dec. 18 that its high-speed ferry The Cat would no longer provide service between Nova Scotia and Portland and Bar Harbor.

The announcement took city officials by surprise, Mayor Nick Mavodones said. He said he was informed of the cancellation Friday morning by City Manager Joe Gray.

“Frankly, I’m quite disappointed,” the mayor said.

Mavodones said he has been in touch with Maine tourism officials and local business organizations, but only in a cursory manner. He said he expects to hold more substantial discussions on the effect the decision will have on Portland and Maine tourism after the holidays.

Meanwhile, in Yarmouth, N.S., a petition drive has been launched to get the Canadian government to reinstate funding for the Cat in 2010. MacDonald, in his announcement, said a main factor in his company’s decision was withdrawal of a government subsidy.

“Our company is not in a position to absorb the significant financial loss we would experience in the absence of government support,” MacDonald said.

The petition, which is posted on the Yarmouth, N.S., Web site, says tourism accounted for $1.3 billion in revenue for the province in 2008. The Cat service is the main shuttle for getting tourists from New England to Nova Scotia and the petition says its cancellation deals Nova Scotia “a severe blow.”

“Elected officials and businesses up there are really putting a full press on the government,” Mavodones said. “It’s going to have a devastating impact on (Yarmouth’s) economy.”

More than 76,000 people traveled on The Cat in 2009, while 85,000 used it in 2008. The Cat began offering seasonal ferry service between Portland and Yarmouth in 2006, replacing the Scotia Prince, which terminated service in 2005 after a dispute with the city.

Portland opened the $20.5 million Ocean Gateway cruise ship facility in spring 2008, and The Cat was its primary user. Mavodones said this week that it is too early to say what might replace ferry service at the terminal. It costs the city about $200,000 to operate the facility and Bay Ferries provided most of that funding through its lease agreement with the city.

Mavodones said the city could generate some revenue from cruise ships, although most cruises already have their ports for next year scheduled by now. Ocean Gateway also only has the capability to handle smaller cruise ships. The Maine State Pier is the main berth for most cruise ships that come to port.

“I think we have to be all ears,” Mavodones said. “It’s a commercial berth and that’s its prime and best use.”

He noted that the terminal building, which sits on the water and has glass walls to the harbor, is used as event space by the city and by outside groups that rent the space, and could be an increased source of revenue.

“I’d like to see it used for its intended purpose, though,” Mavodones said.

Kate Bucklin can be reached at 781-3661 ext. 106 or kbucklin@theforecaster.net

Portland’s Ocean Gateway terminal as it appeared in January 2008, in preparation for its first season as the city’s home for The Cat ferry.

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The Cat ferry glides across Casco Bay in May 2006 on its first trip into Portland. Last week, Bay Ferries Ltd. announced it has suspended service.