News
N.S. wants to know where $2M for air service went

Dec. 1, 2009, Halifax – The Nova Scotia government wants to know how $2 million meant to prop up air service to a community in the province for several years could be gone in less than one.

Bill Estabrooks, acting minister of economic and rural development, said Monday he has asked staff to get an answer about the service to Yarmouth.

"Not to imply that there was money misspent, but the intent was this money was to help over a four-year period, and nine months later, they're out of dollars," he said.

"I think that that would have to be necessary in terms of a good, thorough audit of the funds, and it would also clear the air for why this amount of money went through their hands so quickly."

That shouldn't be a problem, said David Rankin, executive director of the Yarmouth International Airport Corp.

He said the corporation will account for the money in the provincial loan.

"It's a very transparent process, and now we will be doing an audit of that and reporting back to them," he said.

He said he expects the audit to take at least a month.

The former Conservative government announced in January that it was providing $2 million from the Industrial Expansion Fund to the corporation to support the re-establishment of air service to and from Yarmouth. At the time, the province said the money was meant to support the air service for five years.

Starlink Aviation Inc. of Montreal started flights from Yarmouth to Halifax and Portland, Maine, in February. The corporation could give money to Starlink in months the airline didn't break even.

The Halifax Chronicle Herald reported in mid-November that the corporation had been paying the airline about $200,000 a month, which dropped to $150,000 in October.

Last week, Starlink announced that Monday would be its last flying day. Corporation chairman Martin Pink said a little more than two weeks ago that the $2-million fund would be gone by January.

But the corporation said in a news release last week that it had received "unanticipated charges" from Starlink, and if they were paid in full, the rest of the fund would be gone.

Rankin said the corporation is taking a look at why the money didn't last.

"It's a mix of (fewer than expected) passengers and revenues," he said. "It's really just a case of needing to look back at the past nine or 10 months and evaluate what was done, and put together a new plan."

Estabrooks said department officials haven't received any applications from the corporation or Starlink for more funding.

He said he didn't know if the province would contribute more money to air service for Yarmouth.

Earlier Monday, Percy Paris, the minister of economic and rural development, met with a Starlink official before going on vacation, a department spokeswoman said.

Estabrooks said he wasn't aware of that meeting.

A Starlink spokesperson could not be reached Monday.

Interim Tory Leader Karen Casey, who was part of the previous government, said the air service was seen as a way to boost tourism and economic growth in the Yarmouth area.

She said she thinks the government could look at putting more public money into the venture if the benefits are there.