HALIFAX—The Nova Scotia government is under fire for spending an estimated $8.5 million to renovate a ferry terminal in Maine, to help prop up a service running between the state and the province.

“This money would be better spent at home,” NDP legislator Susan Leblanc said Wednesday in a statement.

The provincial Liberal government says renovations are needed because the privately owned ferry service out of Yarmouth, N.S., is shifting its Maine port from Portland to Bar Harbor.

Funding was announced Wednesday, as the province also said it will provide another $13.8 million to private operator Bay Ferries for its 2019-20 operations.

But some lobby groups say ferry spending has spun out of control, arguing Nova Scotians shouldn’t be paying for the costs of renovating American facilities and the salaries of customs officers.

“It’s particularly egregious for the Nova Scotia taxpayers to be paying for jobs in the U.S.,” said Paige MacPherson, the Atlantic director of the Canadian Taxpayers Federation.

The money could have been used to hire dozens of doctors for the province’s understaffed health system, she added.

Work on the ferry terminal includes a fixed span and pier, deck and pile repairs, as well as moving the vehicle transfer bridge from the Portland terminal and reassembling it in Bar Harbor.

Transportation Minister Lloyd Hines said in an interview the ferry is a vital part of the province’s transportation system and is important to the tourism industry, particularly in the southwestern region of the province.

“We have spent some time re-establishing this service,” said Hines.

“In the Portland situation it was a year-to-year thing and there was uncertainty. We’re moving to end that uncertainty to create a permanent home in Bar Harbor for this service.”

MacPherson says the province lacks an independent study showing the ferry subsidies will actually be lower than the amount of money the service brings into the province through tourism.

She also said having to help pay the cost of U.S. customs officials’ salaries is unacceptable to her organization’s supporters.

Hines said the payments are required by the American government to provide the U.S. Customs and Border officers at the leased terminal.

“It’s part of the cost of doing business in that situation,” he said.

Diane Saurette, executive director for finance at the Transport Department, said when the ferry service was reinstated in 2014-15 under the Nova Star Cruises operator, a commitment was made to pay for the customs service.

“We’d like to be where we were in 2009 when we weren’t paying for these kinds of services, but we’re not in that place,” she said.

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Saurette said an estimated $600,000 is budgeted for U.S. customs salaries for the next year, but the “majority” of this will be offset by a port security fee that will be charged for each reservation.

The renovation costs will be included in the province’s 2018-19 spending, which had previously allocated $10.9 million for the 2018 sailing season.

The work is currently underway with an anticipated launch of the new Bar Harbor-Yarmouth route at the end of June.

The ferry service has a recent history of requiring higher subsidies than originally projected.

The prior operator used $21 million provided for seven years in less than six months of operations, and ultimately required $28.5 million to complete its first season in 2014-15.

Bay Ferries took over the service after the province lost confidence in the initial operator that year, but subsidies have continued.

Mary Brooks, a professor emerita of the Rowe School of Business at Dalhousie University, did a case study of the ferry in a book chapter she provided by email.

She noted a significant decline in Americans’ use of the ferry service since the early 2000s.

“Whether ferry traffic will ever reach the levels prior to 2008, particularly in the bus and group tour markets, or whether those markets have simply vanished or found new destinations, remains for future analysis and marketing efforts,” she says in her excerpt.

“This continues to be political,” she said in an email about the latest subsidy decisions.

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