OCEANEX CHALLENGES MARINE ATLANTIC AS UNFAIR COMPETITION

A privately-owned shipping company in Newfoundland and Labrador is challenging federal crown corporation Marine Atlantic in court. St. John’s-based Oceanex is one of the two major carriers of freight to and from the island of Newfoundland. Marine Atlantic is the other major carrier, and operates the ferry services from the island to Nova Scotia.

Oceanex has gone to provincial court arguing the government subsidies to Marine Atlantic cease because they constitute “unfair competition”. Oceanex has been especially vocal on the matter since early 2016 when they requested that the minister of transport review the matter of commercial freight rates for Marine Atlantic. Since then, Oceanex has developed a campaign to promote its position, including taking advertisements on social media.

Oceanex’s actions are an attack on a vital public service. Newfoundland and Labrador’s Terms of Union with Canada specifically state that the federal government would take over and assume the cost of operating “the Newfoundland Railway, including steamship and other marine services” and more specifically that Canada will “maintain… a freight and passenger steamship service between North Sydney and Port aux Basques”. Oceanex is attempting to argue that the wording of the Terms of Union do not necessarily entail that such a service be subsidized. In any case, Marine Atlantic’s ferries are absolutely vital for the people of the province as they serve as an extension of the region’s highway network and large volumes of road freight from the mainland depend on that service. So dependent is Newfoundland on mainland freight, particularly food, that delays in ferry service are often quickly reflected by shortages and higher prices.

Oceanex is framing itself as the victim, and its propaganda webpage “A Level Playing Field” states that subsidies to Marine Atlantic are a threat to its long-term viability and to the livelihood of its nearly four hundred employees. That is nothing less than a threat to lay off workers if business is not good for them. Oceanex has already shut down its operations in the west-coast city of Corner Brook as of the spring of 2014, citing that they could not compete with Marine Atlantic. Eight jobs at their facility were terminated and Corner Brook’s port is underused, catering to summer cruise ships or utility vessels.

Similar arguments were made in the 1980s by private trucking companies against the then publically owned Canadian National (CN). When CN was deregulated in mid-80s in the process that eventually led to its privatization in 1996, CN immediately began to cut rail services in unprofitable areas. The railway in Newfoundland was badly in need of improvements by the 1980s, but the environment of neoliberal deregulation and privatization signalled its termination in the autumn of 1988 in favour of a federal payout for highway improvements for increased truck traffic. Thus were hundreds of good jobs lost along with had been a significant component of Newfoundland’s transportation infrastructure.

Oceanex’s efforts have not gone unopposed. The town of Port aux Basques is a main beneficiary of Marine Atlantic’s presence. Port aux Basques resident Jamie Greene says that the issue of Marine Atlantic’s importance repeatedly comes up in town council meetings and what Oceanex CEO Sid Hynes is proposing would be “the death blow for a relatively large town in Newfoundland- it’s not like there are many other employment opportunities here”. Even the region’s chamber of commerce has expressed its concerns for the future of the town and for the province in general, a sentiment that is being echoed in other communities who are rightly fearful of price increases in a time when Newfoundlanders and Labradorians are already being asked to tighten the belt and expect less. In the Port aux Basques area alone are many small communities along the coast from Codroy to Rose Blanche, a distance of about one hundred kilometers with Port aux Basques roughly in between, and they depend on the stores in Port aux Basques for most grocery items and other daily necessities. A downturn in the Port would most certainly be negative for those small communities.

Oceanex’s actions are in fact a clear demonstration of the need for transportation in the province and Canada in general to be publicly owned and democratically controlled. Instead of allowing Oceanex to undermine a vital public utility, that utility should instead be strengthened and expanded. If Oceanex cannot compete with Marine Atlantic now, it ought to do better when it is nationalized and serving the people instead of profit.



Sean Burton


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