Annual Report 2010

MARINE ATLANTIC ANNUAL REPORT 2 0 1 0 –/ 1 1 PA G E 2 HIGHLIGHTS FOR 2010/11 Passengers 382,522 Passenger vehicles 131,597 Commercial vehicles 100,620 Number of sailings 2,095 Employees (peak employment) 1,364 Employees (full-time equivalent) 1,113 PA G E 3 Table of Contents FERRY ROUTES TO THE ISLAND 02 Highlights for 2010/11 OF NEWFOUNDLAND 04 Message from the Chair 05 Message from the President and CEO 06 Corporate Profile NEWFOUNDLAND & LABRADOR 09 Operations of Marine Atlantic 11 Operating Environment QUÉ BEC 12 Retiring the MV Caribou ARGENTIA PORT AUX 13 Retiring the MV Joseph and Clara Smallwood BASQUES 14 Year in Review PEI NORTH SYDNEY 24 Looking Forward 26 Financial Overview N O VA SCOTIA 32 Corporate Social Responsibility 35 The Board and Management Working Together 40 Board of Directors Head Office 10 Fort William Place, Suite 302 | St. John’s, NL | A1C 1K4 42 Financial Statements PA G E 4 Message from the Chair ROB CROSBIE | CHAIR, MARINE ATLANTIC BOARD OF DIRECTORS dedicated vessels, the MV Caribou and MV Joseph and offering significantly enhanced capacity to address the Clara Smallwood, to allow us to bring forward our plan of demand for our service, upgrading our shore-based renewal. While we were sad to see these vessels retired, infrastructure and moving forward with plans for a modern they could no longer satisfy the needs of our customers. and efficient Marine Atlantic that offers a reliable service to The 2010/11 fiscal year was a period of change and With our new vessels, in combination with the MV Atlantic our customers. We have a vision, we have the resources and renewal for Marine Atlantic. Within our Corporation Vision and the MV Leif Ericson, our new fleet has an we have a plan; we look forward to the positive changes there was a sense of excitement and optimism as the increased capacity of approximately 25 per cent. There is that our customers will soon experience. Government of Canada committed in excess of $900 a significant renewal program underway at Marine Atlantic million over a five-year period toward new infrastructure, and we will continue to make improvements to our entire operating subsidies and business renewal. operation in the coming years, including our terminals, ROB CROSBIE docks, parking lots, properties and business practices. It was no secret that we faced a declining reliability of our aging fleet and infrastructure, while at the same On behalf of the Board of Directors, the management team time dealing with increased demand for our service. and the users of the service, I thank the Government of The federal government’s funding commitment allowed Canada for their renewed commitment at this critical the Corporation to move quickly to charter two modern juncture for Marine Atlantic. This investment presents vessels to address these reliability challenges. Two large an opportunity for the Corporation to continue with our modern ice-class superferries suited to operating in the revitalization efforts and further improve our service harsh environment of the Cabot Strait, were identified and delivery to the people of Newfoundland and Labrador. underwent significant modification. It is a testament to the The Board of Directors has worked very closely with the dedication and commitment of the team at Marine Atlantic, federal government in securing this new funding and has in combination with our world-class partners, that all of this been actively involved with the Executive Management work was completed over a ten-month period. team to oversee and implement change and renewal within Marine Atlantic. Fleet renewal was a key priority throughout the year. Our team felt it was extremely important to move forward with This fiscal year was a year of action, a time to put the a concrete plan of action to ensure we offer an improved necessary assets in place to meet our growing customer service to our customers. We retired two hard-working and base. In the next fiscal year, we’re looking forward to PA G E 5 Message from the President WAYNE FOLLETT | PRESIDENT AND CEO Marine Atlantic transports thousands of people, vehicles We initiated a vessel integration project to modify and and over 50 per cent of the goods destined for the Island integrate these ships into our fleet, with safety being portion of the Province of Newfoundland and Labrador our top priority. We contracted a number of international each and every day of the year. agencies to help us with our due diligence processes, as we move into the next fiscal year. Looking ahead to inspections and oversight activities and ensured we had next year, the Argentia – North Sydney ferry service will be Our service is considered part of Canada’s critical the strongest possible commitment to safety. Through revitalized with the introduction of the MV Atlantic Vision transportation infrastructure and the growth in the the design and modification process, our employees and to the route. This vessel provides significantly more cabins, Newfoundland and Labrador economy is consultants were there every step of the way. newly added seating spaces, and expanded amenities further increasing the importance of our We are very pleased that these new vessels, making this service more attractive to customers wanting service. As the demand to transport passengers the MV Blue Puttees and MV Highlanders, are easy access to the east coast of Newfoundland. Customers and goods increased, so did our fleet capacity now part of the Marine Atlantic fleet. will also experience improvements to the Argentia terminal challenges. In 2010/11, Marine Atlantic facility and areas near the property. By the end of March transported over 100,000 commercial units During the year, we retired two vessels that 2011, existing reservations for this service had already during a one-year period for the first time in served the people of Newfoundland and increased more than 45 per cent over the same period in our history. Despite capacity challenges, our Labrador, Canada and tourists from around the previous year. hard working employees loaded our vessels the world for a quarter of a century. The MV effectively and ensured we transported as Caribou and MV Joseph and Clara Smallwood The Government of Canada’s investment into our service much traffic as possible. This was a major were retired from service after many trips will bring significant improvement for our customers. It will achievement for our Corporation. across the Gulf of St. Lawrence and will be take time, patience and much hard work, but I am confident fondly remembered by crew and customers. the commitment by the Corporation and the shareholder to The demonstrated need for additional renew our assets and re-engineer our business will result in capacity, coupled with the challenges of In addition to our fleet renewal, we continued a modern and efficient ferry service that meets the needs of aging infrastructure, were significant factors to move forward with our significant capital our customers, stakeholders, and employees. in the five-year investment made by our shareholder, the project list. We started planning for our shore infrastructure Government of Canada. In 2010/11, we used a portion of upgrades including our terminals, docks and associated these funds to focus on renewing our fleet. We chartered assets. We continued with our review of the Corporation’s two modern vessels that offer increased capacity, new business practices and approaches to determine better ways WAYNE FOLLETT technologies, and improved amenities for our customers. to serve our customers. All of these initiatives will continue PA G E 6 corporate profile PA G E 7 Who is Marine Atlantic? CORPORATE PROFILE Marine Atlantic Inc. is a federal Crown Corporation responsible for operating the ferry service between the Island of Newfoundland and the Province of Nova Scotia. Its vessels carry people, vehicles, and commercial units that deliver goods and products to and from the Province of Newfoundland and Labrador. It is constitutionally mandated to perform its transportation service. The Corporation reports annually to the Government of Canada through the Minister of Transport, Infrastructure and Communities and works closely with the Minister of State (Transport). A Bilateral Agreement with the Government of Canada sets out the principles that govern the Corporation’s relationship with the shareholder. It also outlines the funding agreements under which the Marine Atlantic is a key employer in each of the three towns Classification Societies, and complies with the International Corporation operates its ferry service. While Marine Atlantic in which it operates. Its employees have stable employment Safety Management (ISM) Code. generates revenues from its operations, the majority of opportunities that translate into significant direct and required funding is received from the federal government indirect benefits to these areas. Employment levels within To ensure the safe operation of vessels at sea, Marine Atlantic through Transport Canada. the Corporation peak at more than 1,300 persons during is governed by various acts and regulations. These include: the busy summer season. The workforce at Marine Atlantic Canada Labour Code, Marine Occupational Safety and Headquartered in St. John’s, NL, Marine Atlantic operates is predominately unionized; approximately 96 per cent of Health Act and Regulations, Transportation of Dangerous terminals in the Newfoundland and Labrador ports of Port employees are members of one of the seven labour unions Goods Act and Regulations, Marine Liability Act and aux Basques and Argentia and the Nova Scotia port of covered by six Collective Agreements. To fulfill its mandate, Regulations, Canada Shipping Act and Regulations, Canada North Sydney. The Corporation provides ferry services on Marine Atlantic operates a fleet of four ice-class ferries. Marine Act, Coastal Trade Act, Domestic Ferries Security two routes: a year-round 96 nautical mile daily ferry service The Corporation’s fleet includes the MV Blue Puttees, Regulations (DFSR), and the Marine Transportation Security between Port aux Basques and North Sydney and a seasonal MV Highlanders, MV Atlantic Vision and the MV Leif Ericson.

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