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On Jan. 19, Transport Canada lost its four-year legal battle against the Maritime Harbours Society (MHS) over the controversial privatization of a wharf in Digby, N. S.

In the mid-1990s, the federal government decided to get out of the wharf business. It was part of the privatization drive launched by then-finance minister Paul Martin, who pared down government services to slay the federal deficit. In 1999, Ottawa handed over the wharf and $3.07 million to the non-profit MHS.

Shortly after, fishermen began complaining that the society was neglecting the wharf’s upkeep and that the structure was becoming unsafe, threatening Digby’s scallop fleet, the world’ largest. People who used the wharf also said that berthing fees had ballooned to 10 times what they were when Transport Canada ran the wharf.

A 2001 audit revealed, among other things, that MHS gave millions of dollars of public funds to private companies in untendered contracts. In return, those companies put MHS’s directors on their payroll. The auditor found that a Nova Scotia company called MG Utilities – now known as Marineserve.mg – employed the equivalent of seven full-time positions to run the wharf, which used to be managed by a single government employee. Several of those jobs were given to MHS directors.

Ottawa ordered an RCMP probe into MHS and Marineserve, but no evidence of criminal activity was found. So Transport Canada took the company and the society to court to get the financial records showing how the public money was spent. A judge threw out the lawsuit against MHS, but ruled that the government could pursue Marineserve. Both parties moved to have the dispute settled through arbitration. In the meantime, the wharf was put up for sale for nearly $8 million, while a local community group began negotiations to try to get control of the structure.

Last year, with arbitration proceedings still underway, former Liberal minister of fisheries and oceans and West Nova MP Robert Thibault, who was elected after the 1999 deal, tried unsuccessfully to get the RCMP to re-open its investigation.

Thibault, who was narrowly re-elected in the Jan. 23 election, says that now that MHS and Marineserve have won, he hopes the Digby wharf can be returned to public ownership soon. However, he’s admitted that wrestling the structure from MHS and back into the community’s hands will be like “trying to get the banana back in the peel.”

(With files from the Moncton Times & Transcript)