Over­whelm­ing sup­port

MNL mem­ber­ship sup­ports Town of Port aux Basques pro­posal re­gard­ing fed­eral cost re­cov­ery

The Gulf News (Port aux Basques) - - Front Page - BY ROSALYN ROY

A pro­posal by the Town of Port aux Basques call­ing on the fed­eral gov­ern­ment to re­duce the cost re­cov­ery for op­er­a­tions of Ma­rine At­lantic was among the res­o­lu­tions passed at the Mu­nic­i­pal­i­ties New­found­land and Labrador (MNL) con­fer­ence this Oc­to­ber.

An over­whelm­ing 99 per cent of at­ten­dees voted to sup­port the mo­tion tabled by Mayor John Spencer.

Dar­rell Mercer, cor­po­rate com­mu­ni­ca­tions of­fi­cer for Ma­rine At­lantic, clar­i­fied the cost re­cov­ery via email.

“Ma­rine At­lantic cur­rently has a 65 per cent cost re­cov­ery as es­tab­lished by our Share­holder, the Gov­ern­ment of Canada, and to date we have been suc­cess­ful in achiev­ing our cost re­cov­ery tar­get. The Gov­ern­ment of Canada is re­spon­si­ble for any up­dates to this pol­icy.”

Spencer be­lieves the cost re­cov­ery im­pacts ev­ery tax­payer in the prov­ince. One ex­am­ple the mayor used noted that 98 per cent of fruits and veg­eta­bles are trans­ported to the is­land via Ma­rine At­lantic.

The Re­tail Coun­cil of Canada stated in 2015 that trans­porta­tion chal­lenges forces New­found­land and Labrador con­sumers to pay an ex­tra five to 25 per cent for per­ish­ables.

“Such a dra­co­nian mea­sure has forced per­sonal and com­mer­cial costs on users of the ferry sys­tem to reach un­bear­able lev­els,” said Spencer in a copy of his MNL pro­posal, which he shared with The Gulf News.

Spencer also ques­tioned longterm tourism growth, a mar­ket the south­west coast is work­ing to grow.

“Cost re­cov­ery on op­er­a­tions at 65 per cent kills op­por­tu­ni­ties for a sus­tain­able tourist in­dus­try. There are no ac­ci­den­tal tourists com­ing to New­found­land and Labrador,” wrote Spencer in his mo­tion.

The neg­a­tive im­pact on the prov­ince ex­tends be­yond the ob­vi­ous tourism mar­ket, says Larry Laite, chair of Hos­pi­tal­ity New­found­land and Labrador (HNL). The or­ga­ni­za­tion has been lob­by­ing for a re­duc­tion to Ma­rine At­lantic’s cost re­cov­ery for years.

“HNL has had this as an is­sue prob­a­bly as long as it’s been in op­er­a­tion, like 35 years. There’s al­ways been a com­po­nent and an ad­vo­cacy to try to keep any type of ac­cess af­ford­able, not only for the trav­eller but also for prod­ucts and ser­vices to get to the prov­ince,” said Laite via tele­phone in­ter­view.

Laite says there have been some wins in the past, such as suc­cess­ful lob­by­ing to keep fare in­creases smaller than ini­tially pro­jected. Lob­by­ing is al­ways a pri­or­ity for HNL, re­gard­less of whether or not the Crown Cor­po­ra­tion is look­ing at fur­ther in­creases.

“If they in­crease the cost of the ser­vice as far as Ma­rine At­lantic is con­cerned, then the rest of their pric­ing strat­egy fil­ters in through.”

A re­port by Trans­port Ac­tion At­lantic, based in Monc­ton, New Brunswick noted that Ma­rine At­lantic’s cost re­cov­ery in 2017 hit a record 70 per cent.

“The cost re­cov­ery ra­tio has risen steadily over the past two decades, climb­ing from ap­prox­i­mately 45 per cent in the late 1990s. Dur­ing that pe­riod, user rates have soared at triple the na­tional in­fla­tion rate – in sharp con­trast to tolls on P.E.I.’s Con­fed­er­a­tion Bridge, which are tied to the cost-of-liv­ing in­dex.”

Spencer made a sim­i­lar point, but on a provin­cial scale.

“To put cost re­cov­ery on op­er­a­tions into con­text, if New­found­land im­posed cost re­cov­ery on the same scale as the fed­er­ally op­er­ated sys­tem, the ser­vice con­nect­ing New­found­land to Labrador in the Strait of Belle Isle would see fares rise 40 times the cur­rent rate,” noted Spencer in his re­port.

By 2015, Ma­rine At­lantic fares had in­creased by 11 per cent. Af­ter 2015, Ma­rine At­lantic’s fares rose an­other three per cent, mean­ing an over­all in­crease of 14 per cent from 2012 to 2016.

Call­ing it a “near hypocrisy”, Spencer noted that in 2018, al­though there was no fare in­crease, the fuel sur­charge re­mained in place.

The fuel sur­charge was first in­tro­duced in 2007, and this past sum­mer the rate was 18 per cent, but it has been as high as 21 per cent at times.

The sur­charge hike also prompted HNL to ex­press frus­tra­tion. In a press re­lease dated from Jan­uary 2018, HNL wrote that Ma­rine At­lantic plays a key role in driv­ing the provin­cial econ­omy and im­pacts job growth, but that in­creas­ing the sur­charge means yet an­other year where con­sumers are ex­pected to ab­sorb an in­crease.

“Fund­ing for Ma­rine At­lantic must be set over an ex­tended pe­riod so that it en­ables long-term plan­ning, al­lows for pric­ing that does not erode the level of ser­vice or de­ter trav­ellers, and is suf­fi­cient to drive con­tin­u­ous im­prove­ment and cost ef­fi­ciency in the ser­vice,” it was stated.

Spencer spoke on cost re­cov­ery again dur­ing the Oct. 9 meet­ing of the Port aux Basques town coun­cil. He noted that as Ma­rine At­lantic in­creased fares and cut costs, the fed­eral sub­sidy to the Crown cor­po­ra­tion was sig­nif­i­cantly re­duced.

“In 2012 they were at $130 mil­lion dol­lars sub­sidy. In 2016, when fares are gone up by 14 per cent, their (fed­eral) con­tri­bu­tion to­wards op­er­a­tions had low­ered to $63 mil­lion,” Spencer in­formed coun­cil.

Coun­cil­lor Jim Lane urged coun­cil to fol­low up with MHAs and MPs.

“I think that the seven fed­eral MPs – it’s time for them to get off their rear ends and do some­thing for the prov­ince as a whole,” Lane said. “I think it’s time for our premier and our MHAs also to put pres­sure.”

Aware­ness

Spencer is en­cour­aged by the show of sup­port from the MNL vote, and also shared that some at­ten­dees lacked aware­ness about the is­sue.

“I was sur­prised at how many peo­ple did not know about the cost re­cov­ery,” said Spencer. “I talked to sev­eral MHAs and they thought I was talk­ing dou­ble Dutch.”

While Long Range Moun­tains MP Gudie Hutch­ings did not re­spond to Gulf News in­quiries prior to print dead­line, Bur­geo – LaPoile MHA An­drew Par­sons says he is com­pletely on­board with the Port aux Basques mayor’s po­si­tion.

“I was def­i­nitely aware of the mo­tion. The town gave me a heads up that they would be putting it in, plus I was at the MNL con­ven­tion that week as the min­is­ter re­spon­si­ble,” said Par­sons via tele­phone in­ter­view. “I am 100 per cent sup­port­ive. I don’t think cost re­cov­ery should be at 65 per cent.”

Par­sons won’t spec­u­late on what num­ber cost re­cov­ery should ac­tu­ally be at, say­ing he’s un­fa­mil­iar with the data and eco­nomic stud­ies be­hind it.

In ad­di­tion to be­ing MHA for the area, Par­sons is also Jus­tice Min­is­ter and Min­is­ter of Mu­nic­i­pal Af­fairs and En­vi­ron­ment. He says he’s also been lob­by­ing for a re­duc­tion.

“I’ve ad­vo­cated in Ot­tawa with the MPs. I’ve had pub­lic meet­ings. Where I am with this now, is I am con­stantly in con­tact (with MPs),” said Par­sons, not­ing that the cost re­cov­ery is purely a fed­eral de­ci­sion. “I’m hop­ing in the near fu­ture to be able to sched­ule a meet­ing with (Fed­eral Trans­port) Min­is­ter (Marc) Garneau to dis­cuss this.”

Par­sons doesn’t feel that Ma­rine At­lantic is high on the list of pri­or­i­ties for the Fed­eral Gov­ern­ment, but he in­tends to keep work­ing to change that.

“Ma­rine At­lantic, up in Ot­tawa, is not what I would call a big is­sue,” says Par­sons, who says he’s chat­ted to some MPs about this on sev­eral oc­ca­sions. When it comes to lob­by­ing on a provin­cial front, he’s do­ing what he can as well.

“It wasn’t that long ago that I in­ter­vened as At­tor­ney Gen­eral on be­half of the prov­ince when it came to a con­sti­tu­tional case re­gard­ing Ma­rine At­lantic,” Par­sons said. “We did that in the best in­ter­ests of the prov­ince, and I think any­thing that we can do that will make Ma­rine At­lantic more suc­cess­ful, more at­trac­tive and more com­pet­i­tive is in the best in­ter­est of this prov­ince.”

Dur­ing its 2015 elec­tion cam­paign, the Lib­eral Party of Canada led by cur­rent Prime Min­is­ter Justin Trudeau took is­sue with Stephen Harper’s Tories over cost re­cov­ery. In a let­ter to then Premier Paul Davis, Trudeau promised change, writ­ing, “an un­rea­son­able per­cent­age of cost re­cov­ery from Ma­rine At­lantic has forced fare in­creases by a to­tal of 11 per cent over the past three years.”

Since the elec­tion and un­der the fed­eral Lib­er­als, two more rate in­creases have oc­curred.

Mean­while the Lib­eral Party has ful­filled a pre- elec­tion prom­ise to Que­bec to elim­i­nate tolls on a $4 bil­lion bridge project in Mon­treal, which means a pro­jected an­nual loss of rev­enues in the hun­dreds of mil­lions that Garneau later de­fended.

“With re­spect to the tolls, that was a de­ci­sion based on the large num­ber of peo­ple who chose to live there,” said Garneau from the Stand­ing Com­mit­tee on Trans­port, In­fra­struc­ture and Com­mu­ni­ties, May 30, 2018.

Mayor Spencer says it’s no dif­fer­ent for is­land res­i­dents and that the fed­eral gov­ern­ment needs to make good on its prom­ise to New­found­land too.

“The elec­tion prom­ise made in 2015 to the many thou­sands of New­found­lan­ders and Labrado­ri­ans, who voted over­whelm­ingly for the Lib­eral Party of Canada, whose only op­por­tu­nity to take their ve­hi­cles and re­ceive goods and ser­vices from the other side is on a Ma­rine At­lantic ferry, need to be given the same con­sid­er­a­tion.”

Un­der Term 32 of the New­found­land Act, the fed­eral gov­ern­ment is ob­li­gated to pro­vide a ferry con­nec­tion equiv­a­lent to the Trans-Canada High­way. “It did not spec­ify fed­eral cost re­cov­ery on op­er­a­tions by the Gov­ern­ment of Canada, par­tic­u­larly cost re­cov­ery that has crept from 40 per cent two decades ago to reach nearly 70 per cent to­day,” writes Port aux Basques Mayor John Spencer.

PHO­TOS BY J. R. ROY – SPE­CIAL TO THE GULF NEWS

Port aux Basques Mayor John Spencer wants the fed­eral gov­ern­ment to re­duce the cost re­cov­ery rate im­posed on Ma­rine At­lantic. In his mo­tion pre­sented at Mu­nic­i­pal­i­ties N.L. Spencer wrote, “Cost re­cov­ery tears at the socio, eco­nomic and po­lit­i­cal fab­ric of New­found­land and Labrador.”

Bur­geo – LaPoile MHA An­drew Par­sons says, “Right now the ma­jor con­cern that you hear from cit­i­zens, whether it’s peo­ple that com­mute for plea­sure or peo­ple that com­mute for work or the truck­ing in­dus­try, is that the fares are too high.”

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