MARINE ATLANTIC INC.

In 1949, when the province of Newfoundland (and Labrador today) joined the Canadian Confederation, the ferry service between mainland Canada and the province was accorded special constitutional status under Term 32(1) of the Terms of Union (The Newfoundland Act, 1949). This term guarantees that the Government of Canada will maintain a year-round ferry service for freight and passengers between North Sydney, Nova Scotia and Port aux Basques, Newfoundland and Labrador, in accordance with the traffic offering.

The service was delivered by Canadian National Marine until 1986 when Marine Atlantic Inc. (MAI), a federal Crown corporation, was created to operate the service. MAI delivers the only constitutional ferry service in Canada. The company also operates a non-constitutional, seasonal service from June to September between North Sydney, Nova Scotia and Argentia, Newfoundland and Labrador. MAI owns and operates four ocean-going, ice-class vessels, one of which is used for commercial traffic only.

The ferry service is a critical intermodal transportation link to Newfoundland and Labrador. It carries approximately 27 per cent of all passengers, approximately 50 per cent of all freight and 90 per cent of all perishables (e.g. food, pharmaceuticals) to and from the province. MAI also carries most of the hazardous goods entering Newfoundland and Labrador.

In 1997, major structural changes were made to MAI when the Bay of Fundy services were commercialized. The Newfoundland and Labrador government took over the coastal services and the Confederation Bridge, which resulted in the closure of the Prince Edward Island ferry service. MAI’s reference levels were reduced from $144.5M in 1992 to $36.9M in 1996. Newfoundland Dockyard, a subsidiary shipbuilding company, was also sold.

MAI’s passenger traffic has decreased since 2003 and is now at the same level it was in 1997. Commercial traffic however has increased and represents approximately 70 per cent of total ferry traffic.

MAI has approximately 900 full-time employees. Bargaining units represent approximately 97 per cent of these with six separate unions.

February 2007