Canada–United States

Canada–United States
Ferry Opportunity
April 2013
Introduction
Nova Scotia, situated on Canada’s East Coast, is in close proximity to one of the
largest tourism markets in North America – the Northeastern United States. Some
70 million people live in the New England and Mid-Atlantic States, just a few
hours by sea from Yarmouth, Nova Scotia, at the province’s southwestern tip.
Ferries have connected the two countries for generations. Due to a variety of
circumstances, the route between Nova Scotia and the U.S. is not being served
currently. A panel of industry experts was commissioned by the Government
of Nova Scotia in the summer of 2012 to determine whether a ferry service
could again be a viable business venture. The panel concluded that if certain
conditions were in place, the route could indeed be operated on a selfsustaining basis.
The Government of Nova Scotia is prepared to mitigate the financial risk in the
early years of re-establishing a seasonal daily ferry service between Yarmouth
and the United States. The government will provide assistance of up to
$21 million (CAD) over seven years to a qualified ferry operator with a sound
business plan to re-establish the route on a self-sustaining basis.
This document provides an overview of the Yarmouth ferry opportunity and
describes how to engage with us further to determine whether it is of interest to
your company.
Canada–United States Ferry Opportunity | April 2013
| 1
Tourism – Important to Nova Scotia
Tourism is big business in Nova Scotia. In 2010, tourism revenues totaled
$2.02 billion (CAD) with $1.18 billion (CAD), or 58 per cent, generated by nonresident visitors. This represents significant export activity for the province.
In fact, the visitor economy accounts for 2 per cent of all economic activity in
Nova Scotia, contributing $722 million (CAD) to Nova Scotia’s gross domestic
product (GDP).
Tourism Revenues by Visitor Origin 2010
Tourism Revenues
(millions*) (CAD)
Proportion of
Revenues
Nova Scotia Residents
$840
42%
Canadian Visitors
$886
44%
American
$186
9%
Other International
$108
5%
$2,019
100%
Total
* Numbers are rounded to the nearest million.
The Destination
Nova Scotia. It’s a world of natural beauty and sea-spun warmth with
a way of life shaped by founding cultures whose love of a good time is
legendary.
The scenery is spectacular. The food is fabulous. And from the time your
passengers arrive, they’ll feel like family. Thousands of kilometres of diverse
coastline await visitors to Nova Scotia. Your passengers will create wonderful
memories as they explore from Yarmouth, the historic port of entry in Southwest
Nova Scotia, to the Cabot Trail, one of North America’s most spectacular
touring routes.
Your passengers will enjoy discovering Halifax, our bustling seaport capital;
they’ll be charmed by Nova Scotia’s most photographed fishing village, Peggys
Cove; and they’ll be awed by the experience of the world’s highest tides along
the Bay of Fundy.
Our rich history is brought to life at our three UNESCO World Heritage Sites:
Old Town Lunenburg, Joggins Fossil Cliffs, and the Landscape of Grand Pré.
Inspiration comes easily in Nova Scotia. Wherever one goes, the talent of
our musicians and artisans is all around. Invite your passengers to immerse
themselves in our vibrant cultural heritage celebrated in our communities and
in hundreds of festivals annually.
For more about what awaits your passengers in Nova Scotia,
visit novascotia.com.
2 |
Canada–United States Ferry Opportunity | April 2013
The Market
With a population of 70 million people within a day’s drive, and 30 million people
within a six-hour drive from Portland, Maine, the Northeastern United States
offers an enormous potential market of ferry passengers.
A few facts and figures about American visitors to Nova Scotia:
• About 50 per cent of U.S. visitors to Nova Scotia are travelling for a pleasure
vacation; the highest proportion from any of the province’s other
geographical markets.
• A further 17 per cent combine their friend or family trip with a pleasure visit
component.
•
In general, pleasure visitors stay longer and spend more while on vacation
compared to other segments. In 2010, a typical U.S. travel party spent an
average of $1,458 (CAD) in Nova Scotia, while a typical U.S. pleasure travel
party spent $1,688 (CAD).
For more information about Nova Scotia’s tourism industry, including
activity levels, economic impacts, and market research information, go to
gov.ns.ca/econ/tourism/research/.
New Tourism Agency
Due to the importance of tourism to the province’s economy, the government
created a new special operating agency in 2012, called the Nova Scotia Tourism
Agency. Guided by a private sector board, the agency’s mandate is to work with
industry to increase the number of visitors to the province and encourage
them to spend more money and stay longer. The agency is now in the final
steps of creating a new, five-year strategy, which includes improving access to
Nova Scotia among its five pillars for growth. The agency will be a key resource
and partner for the re-established ferry service.
Canada–United States Ferry Opportunity | April 2013
| 3
Ferry Service in Nova Scotia
Shipping routes have connected Nova Scotia and the New England states since
the 19th century. For decades, ferry service running from the Maine ports of
Portland and Bar Harbor to the port of Yarmouth, Nova Scotia, served the prime
Northeastern United States marketplace.
In recent times, ferry service between Yarmouth and Bar Harbor was by
conventional vessel—MV Bluenose, (originally M/S Stena Jutlandica). The sixhour voyage catered to passenger and commercial clients. The vessel could
carry up to 1,000 passengers and 250 autos (or an equivalent combination of
autos, trucks, and motor coaches). Onboard amenities included restaurants,
entertainment, duty-free, and casino, as well as cabins and day-niter
accommodations. The service was owned by the Government of Canada and
most recently operated by Marine Atlantic, a federal Crown corporation. Service
was year-round, albeit reduced during the off-peak seasons. Passenger numbers
peaked at 127,555.
The Marine Atlantic service was privatized in 1997 and taken over by
Northumberland Ferries Limited, which operated as Bay Ferries. The new
operator introduced a high-speed catamaran, The CAT, which reduced the
crossing time to three hours and had an immediate positive impact on traffic
levels. The CAT ’s key amenity was speed. It offered basic food services,
a thrilling ride, and primarily catered to passenger vehicles due to space
restrictions.
4 |
Canada–United States Ferry Opportunity | April 2013
For over 40 years, private, commercial companies operated ferry service
between Yarmouth and Portland. The first of these was a Scandinavian-backed
company, Lion Ferry, and then by Prince of Fundy Cruises, operating the
Scandinavian cruise ferry, M/S Stena Olympica, renamed M/S Scotia Prince. Its
capacity was 1,200 passengers and 250 autos. The M/S Scotia Prince did carry
some commercial traffic but a combination of schedule and market focus made
it primarily a passenger service. Prince of Fundy Cruises applied an aggressive
and effective marketing strategy. It promoted “drive onto to a ship tonight
and drive off in a foreign land.” The company established many partnership
opportunities with hoteliers and resorts in Atlantic Canada. They partnered
with governments in Atlantic Canada, Ottawa, and Maine to extend their
market reach, and they operated without government subsidy.
In 2005, M/S Scotia Prince suspended service between Yarmouth and Portland.
This removed prime capacity from the market, especially the overnight service,
which was popular with many American travellers to Nova Scotia. Bay Ferries
adapted the schedule of their high-speed CAT, operating on both the three-hour
Bar Harbor-to-Yarmouth service and the six-hour Portland-to-Yarmouth service.
In the final years, the Province of Nova Scotia provided a subsidy for this
service. Following the 2009 season, the province declined to provide a subsidy
and the service was discontinued.
Recent Efforts To Attract a Ferry Operator
Nova Scotia has remained without a ferry connection to the United States
since the cessation of ferry service after the 2009 season. A number of studies
have been conducted on the viability and importance of a ferry connection to
the United States and the potential impact on the Yarmouth and provincial
economies. These are cited as information resources later in this document.
Most recently, in 2012, the government commissioned an arms-length panel
of experts to examine the issue and determine if a ferry service could be reestablished between Yarmouth and the United States on a self- sustaining basis,
and if so, what conditions would be necessary to make this possible.
In August 2013 the panel submitted its report, entitled Re-establishing a
Yarmouth—US Ferry? An Analysis of the Issues. The panel concluded a ferry
between Yarmouth and Maine could become commercially viable provided the
service was built around passengers’ onboard experience. The report identified
a cruise-ferry with competitive fares, supplemented by onboard revenue capture
as the business model most likely to succeed.
Canada–United States Ferry Opportunity | April 2013
| 5
The report also stated the service needs to be effectively marketed, and the
destination experience in Nova Scotia, particularly in the southwestern area,
requires further development to encourage more and longer stays. In response
to the expert panel’s findings, the Government of Nova Scotia announced that it
would make up to $21 million (CAD) in financial assistance available to mitigate
the risk in the early years of the service, and that a request for proposals (RFP)
would be issued in order to attract a qualified operator with a sound business
plan to re-introduce the route on a self-sustaining basis.
An RFP was issued in December 2012 with a closing date of January 24th, 2013.
Two submissions were received and the government announced in early
March 2013 that it could not proceed with either of the proposals. The
government has since indicated that it will continue the search for a qualified
operator and also announced a new tourism initiative designed to strengthen
the product offering of future ferry passengers.
6 |
Canada–United States Ferry Opportunity | April 2013
Looking Forward
The Opportunity
In order to mitigate financial risks in the early years of operations, the Government
of Nova Scotia is prepared to offer up to $21 million (CAD) in financial assistance
over seven years to a qualified ferry company with a sound plan to re-establish
service between Yarmouth and Maine on a self-sustaining basis.
Important Considerations
The expert panel’s report also pointed to improvements required in the terminal
infrastructure in Yarmouth, Nova Scotia. The Government of Canada currently
owns the terminal. Transport Canada, the federal agency responsible, has
indicated a willingness to divest the terminal property, and has entered into
discussions with the Yarmouth Area Industrial Commission to negotiate the
possible transfer of ownership to local government. The outcome of this process
is significant to the re-establishment of ferry service; however, it is not directly
under control of the Government of Nova Scotia. The province anticipates that
a start-up agreement would provide mutual protections to all parties to mitigate
undue exposure to risk related to infrastructure suitability.
The successful operator will be responsible at a specified date for certifying
that it can operate the service with the conditions that are in place, including
terminal infrastructure and related service agreements in both Canada and
the United States, and be compliant with all regulatory regimes governing the
provision of service.
Depending on the timing and outcome of negotiations, the government
anticipates it would enter into two sequential agreements with the operator:
1. A start-up agreement under which certain conditions are to be met
by all parties
2. A second agreement for the provision of financial assistance during the
early years of operations, for a period of up to seven years
Detailed information on ports and terminal facilities are available from the
agencies responsible, identified at the end of this document. In the case of
Yarmouth, the Yarmouth Area Industrial Commission is currently undertaking
a survey of the vessel capacity of the berth and turning basin. This information
will be made available as soon as it is finalized. The most recent cruise ferry to
dock in Yarmouth (M/S Scotia Prince) had a length of 143 metres and a draft of
5.26 metres.
Canada–United States Ferry Opportunity | April 2013
| 7
Who Should Consider This Opportunity?
The Province of Nova Scotia is interested in discussing this opportunity with
companies who can demonstrate the key characteristics necessary for success
in this venture:
•
Financial capacity and stability as a going concern – Operators must
be able to demonstrate sufficient financial resources and capacity to deliver
a self-sustaining, commercially viable cruise-ferry service between
Yarmouth and the State of Maine. The province has announced the
availability of a financial incentive of up to $21 million (CAD) over this
period, to help mitigate risks in the early stages of the service. The operator
must also be able to show sufficient financial strength and commitment to
absorb a degree of financial risk.
•
An effective management and corporate structure – The successful
proponent will have an effective management structure with expertise
in managing cruise-ferry operations at its core. Individual roles of senior
leadership will be clearly identifiable. Proponents must also clearly articulate
their relationship with suppliers, including any subcontractors who might
be engaged to deliver the service.
• Operational history and relevant experience – The successful
proponent will be able to demonstrate a history of successful cruise-ferry
operations.
8 |
•
Safety management and regulatory compliance history –
The proponent needs to demonstrate a history of putting safety first for
passengers and employees. A thorough knowledge of the various regulatory
regimes governing international marine travel is essential. An
understanding, based on experience, of risk and coherent strategies for
mitigation must be ingrained in the organization.
•
Tourism industry and hospitality-related services – A re-established
cruise ferry service between Yarmouth and the United States will be an
important part of the province’s tourism industry. Successful proponents
will have the capability to deliver an outstanding passenger experience that
is consistent with Nova Scotia’s tourism brand, and helps to build that brand.
•
Marketing and sales experience – In addition to possessing the
characteristic of a successful ferry operator, the successful proponent
must have the ability to effectively market the experience to their potential
customers, particularly in the Northeastern United States.
Canada–United States Ferry Opportunity | April 2013
How To Engage
In communicating with potential operators, our goal in this process is to balance
flexibility, timeliness, and responsiveness with the need to treat all potential
operators fairly and consistently—and ultimately to arrive at a defensible decision
regarding the disposition of any proposals the province may receive.
In order to meet these objectives, the province is working with the Nova Scotia
International Ferry Partnership (NSIFP), a Yarmouth-based group dedicated
to re-establishing a ferry link between Yarmouth and Maine. In addition to
assisting with promotion of this opportunity, and assisting potential operators
in accessing and sharing relevant information, the NSIFP can assist in the
coordination of site visits to infrastructure in the Yarmouth area.
The province has established the following general phases for working with
potential operators to determine whether or not there is mutual benefit in
pursuing an agreement to provide financial assistance to a suitable operator:
1. First, make contact
Contact the individuals below and state your interest in participating in the
process. You will be added to the database and kept updated on the process.
Province of Nova Scotia:
Mr. John Somers
Telephone: 902-424-8984
e-mail: [email protected]
Nova Scotia International Ferry Partnership:
Mr. Mike Gushue
Telephone: 902-526-4458
e-mail: [email protected]
2. Share Information
Basic profile information about your company and any proposed partners should
be made available to the province and/or the Nova Scotia International Ferry
Partnership as soon as possible after making contact. At the same time, this
document identifies a number of information sources that will prove useful to
companies investigating the Yarmouth ferry opportunity. The NSIFP is also
available to assist in accessing information and coordinating site visits.
3. Qualify
Based on the information you have supplied, information you have gathered,
and your company’s objectives, we will determine with you if there is mutual
benefit in pursuing further discussion. Criteria described above under “Who
Should Consider This Opportunity” will guide the province’s assessment of
operators’ capacity to deliver the service.
Canada–United States Ferry Opportunity | April 2013
| 9
4. Submit a Proposal by June 20th, 2013
Qualified companies interested in negotiating an offer of financial assistance
from the Province of Nova Scotia will be required to submit a formal proposal,
in general format to be supplied by the province at a later date. The province
anticipates negotiating one or more financial assistance agreements with
a single operator. These agreements will be contingent upon provision of
necessary infrastructure upgrades and the availability of border services.
The province’s objective is to have service in place in time to take full
advantage of the busiest time of the year for Nova Scotia’s tourism industry.
Ideally, the operator will begin daily service to the United States no later than
June 2014.
The province is prepared to receive final proposals until June 20th, 2013. Further
proposal submission instructions will be provided to operators who are qualified
by the process described above at a later date.
The province reserves the right in its sole and absolute discretion to extend any
and all deadlines connected with this process.
The province reserves the right not to proceed with any proposals that it
determines do not represent acceptable risk or value to the province.
Confidentiality
All inquiries will be treated in confidence by the province and the NSIFP.
Proponents who qualify for and indicate an interest in pursuing this opportunity
further may be required to sign a confidentiality agreement with the province.
Identities of companies and their principals who submit formal proposals will be
made public. Except for the identity of the companies and their principals, the
content of proposals received by the province will be considered confidential
except where a proposal may eventually form part of, or be referenced in, a
contract or agreement with the Province of Nova Scotia, or where material is
subject to the Freedom of Information and Protection of Privacy Act
(Nova Scotia).
Any Questions? These Resources Are
Available to Your Company
The Province of Nova Scotia
The primary role of the Province of Nova Scotia is to conduct the recruitment
process in the manner described above. The province is also in a position to
provide less formal assistance to operators considering this opportunity and
working to prepare proposals for the province’s consideration. Provincial staff
10 |
Canada–United States Ferry Opportunity | April 2013
can help provide clarification on the process, and in some cases, point potential
operators to other agencies or partner organizations, such as the Nova Scotia
International Ferry Partnership, profiled below. The province also provides a
number of useful information resources, most of which are available online.
The Nova Scotia International Ferry Partnership (NSIFP)
The Nova Scotia International Ferry Partnership (NSIFP) is a community-based
group comprised of local business representatives with a shared vision of reestablishing the ferry link between Yarmouth and the United States. The NSIFP
is working closely with the Province of Nova Scotia to promote this opportunity
and to assist potential operators in accessing the information they require to
develop their business plans. The NSIFP can help potential operators access
information, network with other agencies and organizations, and provide onthe-ground assistance during site visits in the Yarmouth area.
The NSIFP is funded and directed by the following municipal governments
in Nova Scotia:
• Town of Yarmouth
• Municipality of the County of Yarmouth
• Municipality of Argyle
The NSIFP is co-chaired by Mr. Keith Condon and Mr. Neil Leblanc.
Port Information
For detailed information on port infrastructure at the Port of Yarmouth,
Nova Scotia, contact:
Mr. Greg Shay, B.B.A.
Director of Finance
Municipality of the District of Yarmouth
Acting General Manager
Yarmouth Area Industrial Commission
Telephone: 902-742-7159
e-mail: [email protected]
Information on the Port of Yarmouth is also available online at:
www.portofyarmouth.com under the Files Library icon.
For detailed information on port infrastructure at the Port of Portland, Maine,
contact:
Mr. Bob Leeman
Telephone: 207-233-0350
e-mail: [email protected]
Canada–United States Ferry Opportunity | April 2013
| 11
In Conclusion
Thank you for your interest in re-establishing a cruise-ferry service between
Nova Scotia and Maine. We look forward to your proposal and to potentially
working with you in the near future to continue to build Nova Scotia as one of
Canada’s prime vacation destinations.
Terms and Conditions
1.
This document and the information herein does not, and is not intended to, create any legal obligation
or relationship between the Province and any proponent responding to the Opportunity, and is not legally
binding except as the parties may later agree in a formal legal agreement duly authorized by both parties
[the “Formal Agreement”]
2. This document is not, and is not intended to be, a tender document, and thus any laws applicable to
tender do not, and are not intended to, apply.
3. Neither the Proponent nor the Province shall have the right to make any claims against the other for
matters arising out of this document, or arising out of the process established by this document, except as
the parties may later agree in a Formal Agreement.
4. The Province reserves the sole and absolute right to terminate for any reason, which may include the
disqualification of any proponent, any discussions or negotiations between the Province and any
proponent.
5. Proponents interested in pursuing the Canada-United States Ferry Opportunity may be required at any
time in the process to enter into a Non-Disclosure agreement.
6. The laws of the Province of Nova Scotia shall apply to this and to a Formal Agreement, if any, and the
Courts in Nova Scotia shall have sole jurisdiction to hear matters arising thereto.
12 |
Canada–United States Ferry Opportunity | April 2013