Federal Court dismisses Oceanex attempt to slash Marine Atlantic subsidies – Newfoundland & Labrador

Canadian news headlines

Oceanex might not think it’s fair for the federal government to be backing a Crown corporation it competes against, but the Federal Court has dismissed its legal action.

The two shipping companies were on opposite ends of a freight fight, with the privately-owned Oceanex asking the court to force the federal transport minister to reconsider the subsidy provided to Marine Atlantic.

Oceanex chairman Sid Hynes confirmed the case had been dismissed on Wednesday evening, but said he had no comment until he had time to read the decision.

A spokesperson for Marine Atlantic said they were “pleased with the court decision,” but could not go into detail until they had time to comb through it.

According to Marine Atlantic’s latest annual report, the Crown corporation received $94 million via subsidy in the 2016-2017 fiscal year.

Ferry Marine Atlantic

Marine Atlantic receives a subsidy from the federal government, which was the target of a court action by its competitor, Oceanex. (Marine Atlantic)

Oceanex spoke out in the media and launched an ad campaign against Marine Atlantic, saying the company couldn’t provide a competitive freight service if their business rival was being subsidized.

The provincial government, as well as some consumer groups, said shipping rates would increase and goods would become more expensive if the subsidy were to be eliminated.

In the Terms of Union signed when Newfoundland and Labrador joined Canada in 1949, there was a clause stating Ottawa must provide a ferry service to the island. Oceanex argued it did not say the service must be subsidized.

A legal team from the province’s Department of Justice was involved in the case, which Justice Minister Andrew Parsons previously said could have a “direct and negative impact on the cost of goods in Newfoundland and Labrador.”

The case was heard in Federal Court in St. John’s starting on Oct. 23.

CBC News has not yet seen a copy of the decision, which was handed down late on Wednesday and totals more than 200 pages in length.

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Originally posted 2018-03-07 23:46:29. Republished by Blog Post Promoter