SAINT JOHN, N.B. –It seems improbable that governments would allow the Princess of Acadia to cease plying the waters between Digby, Nova Scotia and Saint John, New Brunswick. But after pulling the plug on the CAT ferry between Yarmouth and Maine last year, it is clearly a real possibility that they might also let the Digby-Saint John service die.

For years, Northumberland Ferries profitably ran the CAT and Princess of Acadia after taking over the money-losing operation from Marine Atlantic in 1997, according to Don Cormier, vice-president operations and safety management, Northumberland Ferries Ltd./Bay Ferries Ltd.

But then the tide turned against Bay Ferries; ie., the collapse of the forestry industry in Nova Scotia was largely responsible for a drop in truck traffic from a historic high of 26,000 to just 10,000 tractor-trailer trips in 2009.

Since 2006, the Nova Scotia, New Brunswick and federal governments have subsidized the Princess of Acadia: Money already given and money pledged, $23.1 million in all, will keep the ferry running until Jan. 31, 2011. What will happen after that?

“Currently the company and service is meeting expectations in a very different business climate. There is recognition from governments that this service requires public monies to operate,” Cormier says.

“We don’t want hand-outs. We are proud of our accomplishments. It is not how we want to do our business (taking hand-outs). But from a matter of public policy, if a private company cannot sustain this route, it is a good public policy to support ferry infrastructure. They are public highways, they are lifelines to communities the same way as asphalt highways.”

Carriers that use the ferry heartily agree.

“I think it is a vital piece of transportation in this area which we do not want to lose. There is a lot of product going back and forth,” says Brent Chamberlain, manager of Acadian Wipers in Digby.

The Nova Scotia fishing industry is worth $300 million a year. Many companies depend on the ferry to get their catch to US markets without delay.

“We bring in boats in the morning, process and pack the fish. It is ready to ship by four o’clock. It is on the New England market by 5:30 the next morning,” says Denny Morrow, executive director of the Nova Scotia Fish Packers Association, which has 59 member companies.

“The Princess of Acadia is part of our business plan. We put $200 million worth of seafood a year on the ferry.”

Were the ferry to cease operations, trucks could drive around the Bay of Fundy.

That, however, takes six to eight hours extra travel time and requires either a rest stop or an extra driver. This is no way to bring fragile produce to markets that demand freshness.

“Once lobster is out of the water, it is on life support,” Morrow says.

Governments are trying to figure out what to do.

In 2007, Transport Canada issued a Request for Expression of Interest (REI) to see who might be interested in running the service. Seven companies, including Bay Ferries, responded.

“The REI was a process by which the government could answer the question whether anyone has a credible business plan to offer this ferry service without public funding. None of the other participants in the REI had a privately-funded, viable business plan with a positive bottom line,” Cormier says.

There is talk of returning the service to public ownership, but is that wise? In the last fiscal year that Marine Atlantic operated the Princess of Acadia, it lost $7 million, according to Cormier.

“The only logic to contemplating that is if public ownership was required to access a different source of funding. We believe the private sector-driven model is the preferred one.”

It is about 69 kms from Digby to Saint John as the crow flies.

It is unthinkable that Transport Canada would shut down a 69-km section of the Trans-Canada or any other highway for failing to survive some cost-benefit analysis, but this very thinking threatens the Princess of Acadia route.

Still, notes Cormier, “I think governments recognize, to some extent, that analogy, that ferries, like all highways, need public support, regardless of any particular stretch’s profitability.”

The federal government, through the Atlantic Canada Opportunities Agency (ACOA), has commissioned a South West Nova Scotia Transportation Study, which includes a look at the ferry service. ACOA published an interim report this February.

It underscores the importance of the ferry to the fisheries industry, but notes that the forestry industry is unlikely to rebound.

The final report was supposed to be issued this spring, but it has yet to surface.

“We are still waiting on it,” Morrow says.

“When we get the report we will be heading to Ottawa to do some hard talking.”