A delegation from Nova Scotia will travel to Maine next week to find out the state’s interest in supporting the Nova Star ferry operation, and to ask why Maine never came through on an anticipated $5 million loan for the service.

Nova Scotia Transportation Minister Geoff MacLellan said he wants to meet “face-to-face” with Gov. Paul LePage to hear his account of what happened with the loan, which has become a contentious political issue in Nova Scotia. Many of the province’s residents are upset that Nova Scotia is subsidizing the ferry service without any help from Maine, and accuse LePage of failing to make good on his 2013 offer to help the ferry operator obtain a $5 million line of credit from a Maine bank, according numerous letters to editors, comments on social media and calls to radio talk shows.

“We want to speak with the governor and hear where that idea came from and where we are now,” MacLellan said.

LePage spokesperson Adrienne Bennett in an email said that the Finance Authority of Maine, a quasi-state agency, has “aggressively pursued” financing options for Nova Star. While the agency can guarantee the loan, she said, it can’t do so without the participation of a willing private financial institution. No bank has stepped forward to make that loan.

During his re-election campaign last year, LePage said he would submit a bill to allow the agency to back a loan. He decided to not submit a bill because no new legislation was needed, Bennett said.

She said the state has spent more than $20 million to build the Ocean Gateway passenger terminal, where the ferry docks in Portland.

“The market will ultimately determine future success,” Bennett said.

The Finance Authority of Maine is often the banker of last resort for Maine companies that have trouble accessing credit on their own. Its most common method for helping companies is its Commercial Loan Insurance Program, which helps companies get a loan from a commercial bank by guaranteeing up to 90 percent of it.

Nova Scotia taxpayers have heavily subsidized the Nova Star service, which operates daily during the tourism season between Portland and Yarmouth, Nova Scotia.

Last year, in its inaugural season, the Nova Scotia government originally committed to spend $21 million (Canadian) over seven years to re-establish the service, which had been suspended in 2009. But Nova Star Cruises spent that amount in the first few months and received another $7.5 million from the government to pay its bills for the remainder of the year.

This year, the Nova Scotia government has said it will spend no more than $13 million on the service.

MacLellan and his delegation will arrive in Portland on the ferry on June 24. He will meet LePage in Augusta on June 25 and later that same day with Portland Mayor Michael Brennan and Greg Mitchell, Portland’s economic development director. MacLellan said he has never visited Portland and hopes to get a tour of the Ocean Gateway terminal.

Joining MacLellan will be Deputy Transportation Minister Paul LaFleche, policy director Alan Grant and Zach Churchill, who represents Yarmouth in the Nova Scotia legislature and also serves as minister of the Department of Natural Resources.

MacLellan said he wants to hear from Maine officials about their ideas on how to help the ferry service become sustainable. He said he also wants to discuss whether the ferry would be more successful if it connected Yarmouth with Bar Harbor rather than Portland.

Because Bar Harbor is closer to Yarmouth, a ferry could make a round trip between Bar Harbor and Nova Scotia in about half the time, which would save on fuel, according to a 2012 report funded by the province.

Brennan said Portland is the best Maine port for the ferry because it is geographically closer to the large population centers of the Northeast, and bus and train connections and an airport.

“We have 8.5 million people come through Portland each year, and the opportunities it creates for the ferry service to Nova Scotia are enormous,” he said. “I don’t see how Bar Harbor would provide the same demographics to support the service the way Portland can.”

Dennis Bailey, spokesman for the ferry operator, Nova Star Cruises, said the service is on track to carry 80,000 passengers this year, which would be a significant improvement over the 59,000 passengers it carried last year.

The service began on June 1. Passenger counts for June won’t be available to the public until July 15.

 

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