Statement of Mark MacDonald
President and Chief Executive Officer, Bay Ferries Limited
December 18, 2009

On December 15, 2009, the Government of Nova Scotia informed Bay Ferries Limited there would not be an extension of financial support for ferry service out of Yarmouth for the 2010 operating season.

As a result, the high-speed ferry service delivered by our vessel "The CAT" will end. Appropriate notice and other arrangements will be made with respect to employees of the service. We are sorry to deliver this news at this time of year, but felt it our responsibility to do so promptly once our discussions with the Government of Nova Scotia had concluded.

While this is very sad news to share, I would like to express my thanks to many people:

Our Workers – First and Foremost

Our employees in all parts of the ferry business have justifiably developed a reputation as being among the best in the world at what they do. Many of our current employees come from families who have worked in ferry service for generations.

Each summer, I received many "Thank You" notes from customers about some small act of kindness by one of our employees which, in turn, gave a great first impression of Nova Scotia.

Our deck and engine employees pioneered the use of very complex high-speed ferry technology in North America at a stage (late 1990s) when the technology was still developing. The second CAT, which we introduced to the service in 2002, is one of the largest and best ferries of her type in the world. Nevertheless, the Gulf of Maine can be an extremely challenging operating environment.

In spite of this, our employees achieved a remarkable record of service reliability and were always at the ready to help a customer in need. They are true professionals.

Our Customers

To the more than 1.5 million people who chose to travel on with Bay Ferries between Nova Scotia and Maine from 1997 to 2009, we continue to appreciate your business and your trust. Thank you for letting us look after you and keep you and your families safe and for the tremendous support you have shown to us.

Our Community Partners

To our many friends, colleagues and partners in the travel, tourism and hospitality business, thank you for working with us in this international business.

Thousands of people worked hard every year in cooperation with our company to bring people to and from Nova Scotia and look after them during their visit - everyone from hoteliers and resort operators to regional tourism organizations and tour operators, publishers, website operators, call centre operators and many, many others. We appreciate everyone's hard work and devotion to our visitors.

Government of Nova Scotia

Thank you for your longstanding partnership in marketing Nova Scotia in the New England and US markets. And thank you for the financial support the provincial government has made in this ferry service in the last several years.

Bay Ferries never intended the Yarmouth ferry service be a publicly subsidized service and operated the service without government subsidy for 9 years while making privately financed capital support in the equivalent of about $100 million Canadian.

We are very grateful to the Province of Nova Scotia whose substantial support enabled the service to continue longer than would otherwise have been possible. We also realize the many difficult decisions governments must make in today's economic climate and respect and understand the decision which has now been taken.

Our Host Communities in Canada and the United States

To the Town and County of Yarmouth, Nova Scotia, City of Portland, Maine, and the Town of Bar Harbor, Maine, thank you for your trust in our company and for the support of our service. Bay Ferries also acknowledges and thanks Portland, as owners of the International Marine Terminal and new Ocean Gateway Terminal, for the open and productive business relationship we have enjoyed.

In Conclusion

Travel on the Yarmouth to Maine ferry service has declined substantially from its peak in the 1998-2002 timeframe. This change is roughly in line with the reduction in capacity on the service since that time. As everyone is aware, demand has lessened substantially due to the overall decline in US visits to Canada, the passport issue, the state of the US and world economy and the weakening US currency.

In the face of these challenges, our employees have worked hard to lessen the impact on the communities closest to the service and we are proud that in 2009 our employees' efforts led to a 67 per cent year over year increase in room nights sold through our company into the Yarmouth and Acadian Shores region of Nova Scotia, a 38 per cent overall increase in Nova Scotia room nights sold and also a massive increase in room nights sold into the State of Maine.

Our company deeply appreciates having had the opportunity to provide ferry service between Maine and Nova Scotia since 1997.