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The Financial Situation – Costs and Revenues
Projected Operational Costs
The cost of operating the Sable Island Station is approximately $1 million/year. Of that amount, roughly $550K covers salaries and benefits, food and staffing consumables, office and facilities consumables, fuel (gasoline, diesel and propane), communications (voice, data, radio, and emergency back-up), capital expenditures, training, and mainland support (financial and legal services).
Transportation to and from Sable Island (generally one charter flight every two weeks) costs $78K. For maintenance of infrastructure, $70K is budgeted. This includes sufficient overhead to cover long-term maintenance issues such as engine overhauls, vehicle replacement etc.
Insurance for property and liability (environmental, airport operator) presently costs $65K. This would not be an expense for a direct government operation. Insurance costs are approaching 10% of the total Station operating expense for a non-governmental organization, and those costs are expected to continue to increase rapidly. The estimated cost of using Coast Guard ship support for the annual resupply is $250K. Alternatives may be cheaper or more effective, but for simplicity, this account assumes any of the resupply methods will cost about the same.
Sources of Revenue
The Station is presently funded from three sources: fees for service, contributions, and core funding from Environment Canada.
Fees for service are payments from various operators for technical support, security, and supplies (e.g. electricity, diesel fuel) provided by the Sable Island Station. In recent years these fees - paid by the Meteorological Service, the British Geological Survey, Aliant, Fisheries & Oceans, NavCanada, and others - have totaled $400K.
In addition, the Government of Nova Scotia has contributed $100K.
Fees for service and contributions, though reliable, are insufficient to meet the normal operational costs, and there is a shortfall of approximately $500K. Environment Canada and Fisheries & Oceans have provided the remainder of the funding and logistical support for the Station. However both departments have indicated that they are unable to continue that level of support beyond March 2005.
Core Funding Requirement
Existing revenue streams (fees and contributions) do not cover the full cost of the Sable Island Station, and in the absence of core funding from Environment Canada and logistical support from Fisheries & Oceans, the shortfall is significant.
It is important to note, however, that it is a $500K shortfall, NOT a $1 million shortfall as is it sometimes misunderstood and communicated (e.g. in recent media reports). Discussions are underway to develop additional funding among the stakeholders, however federal departments in the Atlantic Region do not have the financial resources to provide this amount of support, and it is clear that if the Sable Island Station is to continue to function, as it does on behalf of all Canadians, it will need federal funding from outside the region (i.e. Ottawa). Furthermore, of the various Federal Government departments benefiting from a continuous human presence on Sable Island, thus far only Environment Canada (primarily the Meteorological Service) and Fisheries & Oceans (primarily the Coast Guard) have contributed to support of the Station.
It is also important that funding of the Island operation be considered with a long-term view. This will ensure the ability to develop continuity of staffing and resources, and provide sufficient security for the Island to develop new sources of revenue. A stable and secure Island operation will also encourage funding and support through additional science programs and research activities.
Potential revenues yet to be considered and developed:
Although public fundraising campaigns may not provide a significant portion of core funding, such campaigns could raise funding for particular projects (e.g. purchase of a major piece of equipment; construction of a boardwalk system for visitors; bird counts, etc).
Once financial and management issues have been resolved, the Station might provide other services which would both generate additional revenues and enhance the scientific and educational programs carried out on the Island. For example, most people with experience on Sable Island agree that well-managed tourism can be carried out with little or no negative impact on the Island. Indeed it is to the benefit of the Island and Station that people have an opportunity to visit. It is important, however, that this "educational" goal be the primary motive for tourism. As described in the Conservation Strategy (Beson 1998) reliance on tourism dollars could easily lead to increased tourism carried out regardless of impact on the ecosystem, and could also result in increased staffing needs, thus reducing benefit from whatever additional funds are raised. To avoid this, tourism revenues would be applied towards long-term funding issues such as equipment replacement, maintenance, and capital purchases, rather than core operations. |