The private transportation company that delivers roughly half the consumables to the island of Newfoundland says its request for financial help from Ottawa has been declined.

Oceanex Inc. says it will continue to provide a reduced service into St. John's, with ships arriving from Montreal and Halifax twice a week, instead of the regular three.

The company has idled the container ship Oceanex Avalon and laid off 50 of its 430 direct employees. As well, dozens of the nearly 600 contract workers have either been sent home, or have seen their hours of work dramatically reduced because of a sharp reduction in cargo volumes.

But the company says it remains committed to the province.

"As a Newfoundland and Labrador-based business, we have always taken seriously our responsibility to the people of the province as we recognize the critical role of our service to the supply chain," reads a news release from the company Monday.

"At this time, we want to acknowledge and thank our exceptional team. They continue to work hard every day to ensure safe operations that serve the public interest in the best way possible with the resources available to us."

Looking for $2M weekly subsidy

The company was informed late Friday of the federal government's decision.

Oceanex was looking for a subsidy of $2 million weekly from Ottawa in order to maintain a full service into St. John's during the pandemic, saying the three weekly sailings are important to its 1,500 customers, as well as consumers in Newfoundland and Labrador..

"We would like to thank you (our customers), our employees, their union representatives, suppliers, and many others who spoke out about the importance of the work we do for the people of Newfoundland and Labrador. We were not deaf to your efforts," the news release states.

The company has said its business has plummeted by 35 per cent and it could no longer cover its weekly $5-million operating costs.

The company made a pitch to Transport Canada and federal finance officials for a custom-made assistance package.

When the request became public earlier this month, it stoked immediate controversy, and concern about the stability of the province's supply chain, with Oceanex delivering vast quantities of food and medicine to eastern Newfoundland each week.

Some provincial politicians and leaders in the transportation industry quickly offered assurances that Marine Atlantic was fully prepared to handle any reduction or suspension in Oceanex's service.

The Atlantic Provinces Trucking Association also weighed in, saying its members were also ready to step up.

The suggestion of a subsidy for the private carrier also drew criticism from some politicians, including Burgeo-Lapoile MHA Andrew Parsons, who said Ottawa was already subsidizing Marine Atlantic, a federal Crown corporation that operates a constitutionally mandated ferry service between North Sydney, N.S., and Port aux Basques, N.L.

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