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Fuel prices threaten key Canadian lifeline: ferries

Sky-high fuel prices have seen a 30-percent rise in fuel surcharges for the Newfoundland ferry since July 2007.

By Colin WoodardCorrespondent of The Christian Science Monitor / September 29, 2008

Rich Clabaugh–STAFF

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North Sydney, Nova Scotia

It's mid-afternoon at the Marine Atlantic ferry terminal and long rows of commercial trucks are waiting to drive aboard the MV Caribou, their trailers packed with all the things the Province of Newfoundland & Labrador needs from the rest of North America: groceries, automobile parts, medical supplies, plywood.

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But getting anything or anybody on or off the island of Newfoundland – where 95 percent of the province's half million residents live – has become alarmingly expensive. Sky-high fuel prices have triggered one fuel surcharge after another – a cumulative 27.7 percent since July 2007 – on the ferries that serve as the province's lifeline to the rest of the world.

Provincial authorities are angry, with Newfoundland Transport Minister Diane Whalen calling the surcharges "outrageous."

"It's getting harder and harder for many manufacturers to justify sending their products to Newfoundland just because of ferry costs," says Peter Nelson, executive director of the Atlantic Provinces Trucking Association in Dieppe, New Brunswick. "If things keep going this way we'll soon see the $8 head of lettuce in Newfoundland."

In this part of the world, ferries have long been regarded as essential infrastructure, extensions of the railroads and, later, highways, that connect Atlantic Canadians to one another and the wider world. Many communities in Newfoundland – and most in Labrador – are so remote that they are not connected to the provincial road network and people rely on local ferries to get in or out.

Residents of the province of Prince Edward Island can get to the mainland on an 11-year-old bridge, but it costs so much (C$41.50) that many prefer ferries, which are also faster if one is traveling farther east. Nova Scotia is practically an island, and residents of the southwest part of the province rely on ferry links providing vital shortcuts to Maine and New Brunswick.

"We need all the ferries we can get around here," says Harold Theriault, a provincial legislator and retired lobsterman from Digby Neck, Nova Scotia, who says they are essential to the economic livelihood of his region. "We've got a big fishery here, and all our fish and lobsters comes your way [the northeast US]. Every bit of it is trucked, and if we can't take a ferry 30 miles across the Bay of Fundy, then we have to drive it eight hours around."

But high fuel prices are threatening some of the region's ferry links, many of which were privatized more than a decade ago. As costs are passed on to consumers, fewer customers appear to be riding, making critical services inviable without fresh government subsidies.

In August, federal and provincial authorities approved over C$15 million ($14.5 million) in subsidies to rescue the ferry Mr. Theriault's neighbors rely on, a privately operated year-round car ferry linking Digby, N.S., to Saint John, N.B.