FUNDING FOR THE PURCHASE OF THE MV VILLA DE TEROR
Requesting $180,019,398 in the 2020-21 Supplementary Estimates B
Transport Canada (TC) is seeking access to $180M in 2020-21 to ensure ferry service continuity to the remote community of Îles-de-la-Madeleine – an interim solution to replace the MV Madeleine on an interim basis until the new replacement ferry being built at Chantier Davie Canada Inc. (Davie) is ready for service.
Key Messages:
- An off-cycle funding decision in June provided $199.8M to:
- purchase the MV Villa de Teror;
- undertake key refit work to prepare the vessel for use in Canada
- modify shore-based infrastructure to accommodate the vessel; and
- dispose of the MV Madeleine in an environmentally-conscious manner.
- A total of approximately $180M of new funding is being sought through the 2020-21 Supplementary Estimates B to purchase the vessel and undertake key work to bring into service.
- Through the Ferry Services Contribution Program, TC supports three inter-provincial ferry services in Eastern Canada, including service between Îles-de-la-Madeleine, Quebec and Souris, Prince Edward Island.
- This ferry service is an essential year round link to approximately 13,000 residents of the remote community of Iles-de-la-Madeleine and supports the regional economies.
- The MV Madeleine, the Transport Canada-owned vessel used to provide the ferry service, is at the end of its useful life.
- Purchasing the MV Villa de Teror will provide an interim solution that will ensure safe and reliable, ferry service to a remote community until the new replacement vessel being built at Davie is ready for service.
- TC is seeking access to $180M on a cash basis in 2020-21 to:
- purchase the MV Villa de Teror at a cost of ~$156M; and
- undertake key refit work to prepare it for service and modify shore-based terminal infrastructure.
- The funding will help to ensure safe and reliable ferry service to the remote community of Îles-de-la-Madeleine.
- Vessel refit work and modifications to the shore-based infrastructure will support Canada’s marine industry.
If pressed:
- The Government remains committed to building two new ferries at Davie.
- Once the new vessel being built at Davie is ready for service, the MV Villa de Teror is expected to be sold at a fair price.
Background
- Through the Ferry Services Contribution Program, contribution funding is provided to ferry operators to cover: 1) operating deficits (revenues minus operating costs); and 2) expenditures made to maintain and repair Transport Canada’s assets (vessels and terminals) for the safe operation of the ferry services.
- Budget 2019 announced that the Ferry Services Contribution Program would be extended until 2022 with existing service levels and fleet size. It was also announced in the budget that the Government would procure two new vessels from a Canadian shipyard to replace the MV Madeleine and the MV Holiday Island as both ferries are at the end of their useful lives. The new vessels are expected to be in service by 2026-27.
- On July 2, 2020, the Government released an Advance Contract Award Notice (ACAN) to purchase the MV Villa de Teror as an interim solution to ensure safe and reliable between Iles-de-la-Madeleine and Souris, Prince Edward Island until the new replacement ferry is ready for service. The MV Villa de Teror is expected to enter into service by summer 2021.