Bay Ferries is not Nova Scotia’s agent, despite what the minister has said – Halifax (News)

Nova Scotia’s transportation minister appears to be contradicting his government’s contract with Bay Ferries when speaking about the Yarmouth ferry service.

Lloyd Hines has said Bay Ferries and its CEO Mark MacDonald were leading negotiations to move the U.S. port of call from Portland to Bar Harbor. On several occasions he’s told reporters the company is the province’s agent.

When asked on Jan. 24 whether he or anyone from the province was planning to approach the State of Maine to ask for help in funding the millions of dollars of upgrades at the ferry terminal, Hines told reporters that’s not his role.

“No, I don’t plan to do that because our agent, who is Bay Ferries, are involved in that process,” Hines said. “So they’re the ones that do that sort of thing.”

But Bay Ferries cannot be an agent of the province according to the funding agreement between the two parties, which was signed in March of 2016.

It states that “neither BFL nor any employee, servant, agent, or contractor of BFL is an agent, employee or servant of the Province. BFL has no authority to bind the Province to any agreement and agrees that it will not hold itself out as having any authority within the Province or on behalf of the Province.”

Hines has stuck to his word.

He used the term on Feb. 21, after Bay Ferries signed a five-year lease agreement with the Town of Bar Harbor to use the ferry terminal there.

“These are proprietary negotiations that we’re operating through Bay Ferries as our agent in the process there at this point,” he said.

In a scrum on Feb. 28, Hines repeated the statement twice more.

WATCH: Few answers even as Bay Ferries move to Bar Harbor steams ahead

Wayne MacKay, a professor emeritus at Dalhousie’s Schulich School of Law, says agent has a specific definition.

“An agent, depending on how much authority they have, can act on as though they were the main party,” MacKay said. “So if you were a fully authorized agent for the province of Nova Scotia, you can commit them to things, you can make contracts on their behalf.”

But the minister says he didn’t mean it that way.

“Well I guess I’m using the small-a agent arrangement in terms of, they’re behaving like an agent would in the sense that they’re representing the desire by government to maintain and establish this service on our behalf,” he said in an interview on March 6.

When asked why he’s been using the term, Hines said, “I guess I was trying to describe the relationship in a way that your viewers might understand.”

MacKay says the apparent contradiction raises questions.

“The really important question is, are they legally doing that or not?” he said. “So are they doing that outside what the contract says, or are they in fact not doing that, and the government is stating that they are for some unknown purpose? I mean neither of those scenarios make much sense.”

READ MORE: Nova Scotia ferry’s port switch in Maine held up by U.S. government shutdown, new governor

Other contradictions in the contract

The minister has also spoken publicly about a fee he says the province pays for U.S. Customs and Border Patrol services.

When asked on Feb. 14 how much the province will pay for the salaries of U.S. border patrol agents in Bar Harbor, Minister Hines said “I guess, you know, you could state it that way, or you could say that we’re buying a service, and we pay them a fee and what they do with the money is up to them.”

After clarifying that he was speaking about paying a fee to border control, and not Bay Ferries, the minister was asked whether the province will pay for U.S. border services in Bar Harbor.

“Well yes, there’s a fee,” he said. “There’s a fee that we’re paying in Portland.”

Again on Feb. 28 the minister told reporters the cost of salaries for U.S. border patrol agents would be “part of the service that we are purchasing from the U.S. Coast Guard.”

Again the contract states otherwise. The province is a funding partner, paying Bay Ferries an operating subsidy, but the contract says Nova Scotia does not directly pay fees for this kind of service.

The funding agreement states Bay Ferries will “be solely responsible for entering into agreements for and paying for all terminal fees, other land-based service fees including those charges by border services, customs and immigration, or other security agencies and other costs related to the operation of the Ferry Service.”

READ MORE:
Documents show N.S. taxpayers will pay up to $5M in renovations to Bar Harbor

That clause also means Bay Ferries is supposed to enter into its own agreements for terminal fees, but its contract with the Town of Bar Harbor is guaranteed by Nova Scotia taxpayers.

That lease agreement includes a clause titled “Province Guarantee,” which states that the province of Nova Scotia will provide to Bar Harbor “a binding guarantee with limit in the amount of $1 million US funds as to amounts otherwise payable by Tenant (Bay Ferries) under this Lease.”

MacKay says it’s possible that Bay Ferries can be solely responsible for agreements, and the province can guarantee this particular agreement, “but they don’t fit very nicely together.”

“If you were signing a mortgage and I was guaranteeing it, then the bank wouldn’t be calling you the person solely responsible,” he said.

“They’re also looking to me as the guarantor of that mortgage in that case as having some responsibility, and I would think in a much bigger framework that’s the same situation here.”

When asked about that, the minister said Bay Ferries delivers the service for the province “in their assessment of how that should work.” He didn’t address the apparent discrepancy.

“Well you have to understand that the Town of Bar Harbor has taken a significant investment in acquiring for US$3.5 million the facility that they’re in turn leasing to Bay Ferries,” he said.

“So it’s not unusual to think there would be a requirement for some bona fides in terms of the overall picture. That’s a normal business transaction.”

MacKay says all of this raises further concerns about the Yarmouth ferry deal.

“I think it leaves the Nova Scotia taxpayer and voter in an uncomfortable position about what is really happening here, what responsibilities are we taking on, and why is this being done in this fairly contradictory and at a minimum opaque kind of way,” MacKay said.

For his part, the minister says he’ll try to find better language to describe the relationship between Bay Ferries and the province.

“Thank you for pointing that legal definition out and I will see if I can find better words to describe the relationship.”

A spokesperson for the department of transportation says the province has not finalized a new agreement with Bay Ferries and has made no amendments to the current agreement, which is still in force.

It’s expected a new deal will be signed in late March outlining the terms of the funding agreement for service to Bar Harbor.