Province's newest ferry flagged for Saint Vincent and the Grenadines

The Newfoundland and Labrador government has submitted an application that would allow the newly-built MV Veteran to fly a foreign flag while operating in this province, but the opposition says this solution is skirting the real issue.

The MV Veteran, built in Romania to replace the aging MV Captain Earl W. Winsor on the Fogo Island-Change Islands run, is registered in the Caribbean nation of Saint Vincent and the Grenadines.

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The ferry has never sailed in Caribbean waters, but can be registered there to avoid paying higher fees and falls under looser safety, environment and crew requirements.

"It's a flag of convenience, it's not flagged to operate in Canadian waters," says Tom Osborne, Liberal critic for Transportation and Works.

Minister of Transportation and Works David Brazil wants to wait until after a federal election to see if he can convince a new minister to give the province an exemption on a $25-million tariff on foreign ferries.

However, once the ferry arrives in the next couple of weeks the money is due - and you must pay the money to register the ship in Canada.

The province submitted an application on Sept. 25 to acquire a coasting trade licence for the ferry, which would allow it to operate under a foreign flag for one year.

In order for the licence to be issued, the Canadian Transportation Agency has to determine there is no other Canadian ship that would be suitable and available to operate on the route.

According to Osborne, it's a long shot to believe the federal government will make an exception for the foreign vessel tariff, even if a different minister is in place this winter.

They're going to end up paying an extra $25 million, he just doesn't want to admit that he's wrong.- Tom Osborne

"No government in Canada has ever forgiven the tariff on a new-build vessel, so it's ridiculous to think that on a brand-new built vessel that this tariff is going to be waived," said Osborne.

He added if Ottawa lets Newfoundland and Labrador off the hook in this case, other provinces will likely seek the same thing. Osborne said it's time for Brazil and the provincial government to pay up.

"It's obvious they've made a mistake, it's obvious the $25 million could have been saved if they'd gone with another shipbuilder," said Osborne.

"At the end of the day, they're going to end up paying an extra $25 million, he just doesn't want to admit that he's wrong, that he made a mistake."

The department said in an email to CBC News the Saint Vincent and the Grenadines flag is "solely for the purpose of the delivery voyage" and the process to get the MV Veteran flagged as a Canadian vessel will start when it reaches Newfoundland and Labrador waters.

"It's anticipated that when the vessel is ready to enter service on the Fogo Island-Change Islands route, the tariff issue will be resolved," read the email.

However, a response for the coasting licence isn't expected until Oct. 15 at the earliest, so it's not clear what will happen to the ferry once it arrives here if the federal government rejects the application.