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Marine Atlantic ferry passenger rates drop by 50 per cent

The MV Highlanders enters Port aux Basques harbour. – © File photo

By Ryan King Community News Reporter

ST. JOHN’S – On Dec. 14, Marine Atlantic presented its Annual Review of Activities for the 2020-21 fiscal year. The review outlined the corporation’s initiatives and a review of their financial earnings. The presentation began with an overview by Gary O’Brien, Marine Atlantic Chair of the Board of Directors, followed by Murray Hupman, Marine Atlantic President and CEO, and ended with a financial overview from Shawn Leamon, Vice-President of Finance.

The report stated that there were 1,498 sailings, 139,988 passengers, 50,449 passenger vehicles, 89,723 commercial vehicles, and an 87 per cent on-time performance rate.

The Crown corporation’s current fleet of four vessels serve both commercial freight and passengers, and commercial traffic comprises two-thirds of its business, which remained steady in 2021. Meanwhile the number of passengers decreased by 50 per cent compared to a typical year.

“Throughout the year, necessary tough decisions were implemented to operate within budget, and to position the organization for a return to better times,” said O’Brien.

The pandemic resulted in many operational challenges.

“Our greatest priority is protecting the health, safety and security of our customers and employees, and protecting the environment in which we operate. Our policies and procedures are designed with these principles in mind, with new programs and training initiatives introduced during the year to help us meet our targets,” said O’Brien, who praised employees. “It is through their daily efforts and living our Corporate Values that the essential ferry service remained in operation and the critical supply chain continued, while other parts of society were shut down during the second and third waves of the pandemic.”

He stated that the corporation will move forward with procuring a new vessel that is of a Ro-Pax design like the rest of the fleet.

“Marine Atlantic will enter a charter agreement with the successful proponent for a period of 60 months, with an option to purchase the vessel at the end of the agreement. This new vessel is expected to be delivered in 2024,” said O’Brien.

Meanwhile the new administration building on Hardy’s Arterial in Port aux Basques is expected to be ready for occupancy sometime in 2023-2024. There has also been preliminary planning for navigational improvements to the harbour to enhance service reliability and to lessen the impact of weather events.

“This preliminary work will ensure that the project is shovel ready in the event we get approval from the Government of Canada to proceed,” said O’Brien.

He also emphasized the importance of innovation and diversity for Marine Atlantic in the future.

“Innovation generates new ideas that develops a progressive organizational culture promoting greater efficiency, process improvement, and modernization to enhance the overall customer experience,” said O’Brien. “We understand that unconscious bias exists and are committed to assessing all aspects of our organization, as part of our continuous improvement around diversity and inclusion.”

The corporation monitored customers about its response to the pandemic, which proved positive.

“We know we are having a positive impact. Approximately 90 per cent of customers stated that our response to the pandemic was very good, with the same number of people stating that they felt very safe when travelling with us. We are also receiving positive feedback from our stakeholder outreach activities regarding our overall service performance.”

To ensure the health and safety of customers and employees, the corporation took steps that included enhanced cleaning, reduced passenger limits, physical distancing protocols, enhanced screening, isolation measures, and enhanced employee health programs.

The CEO said these measures resulted in reduced passengers, fewer onboard services, a reduction in the workforce, and a suspension of the 2020 summer Argentia service. Hupman also identified diversity and inclusion as a key goal.

“During the year, we engaged with external partners representing individuals identifying as women, Aboriginal Peoples, visible minorities, persons with disabilities, and 2SLGBTQ+, through a series of equity, diversity, and inclusion engagement sessions. Our goal is to continue to work with these underrepresented groups to enable us to remove barriers and unconscious bias from our workplace.”

Hupman stated they are moving closer to the goal of gender equality at all levels of the organization.

“This is being accomplished through ongoing recruitment and succession planning activities, increased participation in the Leadership Management Development Program, and greater representation on the Corporation’s Senior Leadership Team.”

In addition, the corporation is working towards an understanding of respect and inclusion with Indigenous Peoples.

“We are working to develop partnerships with the Mi’kmaw, Qalipu, and Miawpukek First Nations; undertaking recruitment initiatives in Indigenous communities; and launching internal education opportunities such as Truth and Reconciliation awareness sessions, to better reflect and understand the cultural priorities of our Indigenous Peoples,” said Hupman.

The corporation is committed to finding ways to better accommodate those with disabilities.

“Our efforts have focused on infrastructure updates, enhanced procedures, and new communications and service offerings to meet the new Accessible Transportation for Persons with Disabilities Regulations,” said Hupman. “We are committed to identifying and removing these barriers from our service and workplace, including through recruitment and education initiatives.”

Environmental considerations have also been identified.

“We also continued with initiatives as part of our Environmental Management Program. We launched our Safe Supervisor Training program and Contractor Management program. We also continued with initiatives related to the Green Marine program including a Marine Mammal Management Plan,” said Hupman.

Leamon then spoke and provided a closer look at the corporation’s financial results for the fiscal year of April 1, 2020, to March 31, 2021. The 50 per cent drop in passenger traffic volumes lead to a negative impact on revenue, with 130 fewer crossing than the previous year.

“At year end, total expenditures for the organization to provide the ferry service were $219 million. Marine Atlantic does not make a profit and operates on a balanced budget approach. To that end, the funds to cover the costs of providing the ferry service were a combination of revenue generated through user pay and subsidy from the Government of Canada,” said Leamon.

Marine Atlantic generated $83 million in revenue, which excluding gains, was $22.4 million lower than last year, and the Federal Government provided $135.6 million in subsidies. The cost recovery rate of 55.2 per cent fell well short of the 65 per cent target mandated by Transport Canada.

“While passenger traffic remained well below normal levels for the year, commercial customer traffic increased by 9 per cent, helping to offset a portion of the decrease in revenue experienced in the passenger and onboard service area,” noted Leamon.

This increase was likely due to government stimulus programs, a change in buying behaviour to online shopping, an increase in home renovation projects, and increased propane shipments. Due to lower prices due to the pandemic, fuel expenses were $13.8 million lower than last year. Charter fees were $2.3 million higher due to increases in the daily charter rate for the MV Atlantic Vision. Labour costs were $11.4 million lower due to temporary pandemic related layoffs.

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