An increase in commercial traffic, due in large part to a shift to online shopping and an increase in shipments of construction materials during the pandemic, has helped Marine Atlantic get through one of the most difficult years in its history in 2020 -2021.
But that was not enough to offset some significant losses as passenger traffic severely collapsed due to travel restrictions linked to the pandemic, forcing the federal government to increase subsidies for the service and prompting Marine Atlantic to temporarily lay off employees and divert funds intended for investment projects alongside general ledger operations.
The federal crown corporation released its annual report for the last fiscal year on Tuesday, and it revealed how the constitutionally mandated ferry service between Nova Scotia and Newfoundland and Labrador has been derailed by the COVID-19 pandemic.
Strict public health measures aimed at slowing the transmission of the disease have forced Marine Atlantic to reduce the number of passengers on its ships, to close on-board catering and retail services and to suspend seasonal service to Argentia in 2020.
As a result, Marine Atlantic ships carried around 140,000 passengers and 50,000 passenger vehicles last year, about half of the pre-pandemic volumes.
But as passenger traffic declined, the number of commercial vehicles increased by about nine percent, to just under 90,000.
“This helped offset some of the declines in passenger numbers and onboard service,” said Shawn Leamon, vice president of finance for Marine Atlantic, in a video presentation of the annual report.
Leamon said four factors have contributed to the increase in business traffic: government stimulus measures, the shift to online shopping, an increase in home improvement projects as people spend more time at home and more. propane deliveries.
Total expenses for the year were $ 219 million, well above the $ 83 million – a decrease of $ 22 million from the previous year – in revenue from user fees.
This forced the federal government to make up the difference to cover operating costs, to the tune of $ 135.6 million in taxpayer grants.
It is government policy for Marine Atlantic to recover 65 percent of its costs through user fees, but that figure fell to just over 55 percent last year.
Marine Atlantic also cut salaries and benefits by more than $ 11 million through temporary layoffs, and saw its fuel bill drop by nearly $ 14 million as it required 130 fewer sailings, and Fuel prices have fallen to historic lows due to the pandemic.
Marine Atlantic President and CEO Murray Hupman said a “return to normal operations is on the horizon”, while Board Chairman Gary O’Brien praised employees for allowing the ferry service to continue throughout the pandemic.
Marine Atlantic operates four ice class vessels: the MV Blue Puttees, the MV Highlanders, the MV Atlantic Vision and the MV Leif Ericson.
In a typical year, about two-thirds of the activity comes from commercial vessels carrying goods and other supplies to and from Newfoundland and Labrador, while the remainder is from passengers that occurs mainly in the summer.
Meanwhile, O’Brien said efforts to charter a new vessel continue to advance, with two companies moving into the RFP phase.
Marine Atlantic plans to charter the new vessel for five years, with an option to purchase after 60 months. The new vessel is expected to enter service in 2024.
A new administrative building in Port aux Basques is expected to be completed in 2023-24, and improvements to navigation in the port are planned, O’Brien said.
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