Maersk Reverses Course Again, Pausing Red Sea Transits

Maersk reversed its earleir decision and is again rerouting away from the Red Sea and Suez Canal for secuirty reasons (SCA file photo)

PUBLISHED JAN 2, 2024 12:04 PM BY THE MARITIME EXECUTIVE

 

 

Maersk has reversed its previous decision and decided once again to divert all ships away from the Red Sea after the attacks over the weekend on one of its containerships. The move comes as the industry remains divided on the safety of vessels and the best actions, but most of the largest container carriers are continuing to divert while other segments of the industry remain more divided.

“Following the December 30 incident involving our vessel, Maersk Hangzhou, we have decided to pause all transits through the Red Sea / Gulf of Aden until further notice,” the company wrote in a customer advisory issued today, January 2, after reporting it had paused transits immediately after the incident. “We remain committed to minimizing the impact on our customers’ supply chains and will continue to keep you updated on the situation.”

Maersk previously had shown a vote of confidence for the international coalition effort in late December reporting that it was resuming some transits. The most recent voyage updates, Reuters calculated, showed more than 30 Maersk vessels scheduled for the Red Sea transit while 17 had been diverted. 

The company’s website shows the impact to 15 different routes reaching not only its service to the Mediterranean and Northern Europe but ships that were planned to go through the Suez Canal on their routes to North America. Some ports such as those in Saudi Arabia as well as Jordan remain largely stranded although some ad hoc voyages are being operated as round trips through the Suez Canal.

Hapag-Lloyd also reports that it continues to “monitor the situation closely day-by-day,” after having formed a crisis committee in response to the security challenges. Like other major carriers, they began diverting ships in December and based on its assessment has decided today to continue to reroute ships at least through January 9. 

Its online live ticker on the Red Sea situation also shows a broad impact on its fleet as well as its partners in The Alliance. In addition, Hapag shows that some vessels were turned around with one sent back to Tangiers to await orders. Some vessels that appear to have previously been rerouted to the Suez Canal away from the Panama Canal due to the reduced transits and wait times in Panama, are now showing as “switch back to Panama Canal.”

AIS signals show that CMA CGM is however continuing its previous announcement that it would be sending some vessels through the Suez Canal. Today, January 2, at least three of the company’s ships appear in the region with at least one having cleared the Red Sea. Neither the UK Maritime Trade Organizations nor US Centcom has reported any incidents today.

The Suez Canal has not provided any updates on daily transits after its mid-December statement that it was monitoring the situation. Tankers and bulkers however appear to be making the transit although some majors such as BP and Equinor said last month that they would be diverting vessels.

The diversions are reported to be having an impact both on available space for shippers with container costs on spot markets rising to their highest levels for the year in recent weeks. In addition to adding two weeks to many trips to make the trip around Africa, concerns have been raised about having sufficient fuel supplies for vessels to bunker mostly likely in South Africa. Reuters calculated that the diversions would add $1 million in additional fuel costs for each voyage. 

 

U.S. Became the World's Biggest LNG Exporter in 2023

SO MUCH ENERGY SECURITY THE U$ CAN EXPORT IT

File image courtesy Freeport LNG

PUBLISHED JAN 2, 2024 7:47 PM BY THE MARITIME EXECUTIVE

 

According to energy analysts, the United States now leads the world in selling domestic natural gas to overseas customers, thanks to the rapid expansion of LNG liquefaction terminals on the U.S. Gulf Coast. 

The pace of U.S. exports jumped 15 percent year-on-year in 2023, driven by the commissioning of a new plant and the completion of repairs at another mega-facility. The rate of growth has outdistanced the exports of Australia and Qatar, the world's other leading LNG producers. However, the U.S has stiff competition: Qatar is ramping up for a massive expansion of its liquefaction facilities, enough to increase its output by two-thirds by the end of the decade. 

In December alone, about eight million tonnes of American natural gas departed from LNG terminals for buyers in Europe and Asia, withdrawing 390 billion cubic feet (bcf) from the U.S. domestic market. This accounted for about 12 percent of all American gas production for the month. 

The U.S. Energy Information Administration (EIA) assesses that “higher LNG exports result in upward pressure on U.S. natural gas prices," and LNG production was responsible in part for high domestic natural gas prices in 2022. In projections for 2050, high LNG exports could boost the price of natural gas for American households by as much as 30 percent when compared to a low-export scenario, EIA found.

Higher exports are expected. 17 more LNG plants are on track to be built in the U.S. by 2028, and seven more are awaiting permitting decisions from the Federal Energy Regulatory Commission (FERC). Depending on global gas prices, this could double U.S. LNG exports by the early 2030s, EIA assesses.

 

Crew Kidnapped from Tanker in Ongoing Incident in the Gulf of Guinea

Pirates are believed to have taken two crewmembers in the latest incident on a product tanker in the Gulf of Guinea (file photo)

PUBLISHED JAN 2, 2024 2:21 PM BY THE MARITIME EXECUTIVE

 

 

The security services are reporting an ongoing incident in the Gulf of Guinea where at least two crewmembers have been taken from a tanker operating in the area. Unconfirmed reports are suggesting that the captain might be among those taken from the vessel which was in the region near Equatorial Guinea.

The reports are coming from EOS Group and private services unconfirmed by the joint British-French monitoring effort, Maritime Domain Awareness for Trade Gulf of Guinea (MDAT GoG). They have not recorded incidents in the Gulf of Guinea since early December when a fisherman was killed in an attack on fishing boats off Nigeria where the pirates also took engines and fishing gear. In November, some material was also stolen off a supply vessel while it was anchored off Angola.

In the latest incident, the chemical tanker Hana I (13,000 dwt) registered in Tuvla was sailing from Abidjan in the Cote d'Ivoire (Ivory Coast) to Douala in Cameroon, according to the alert from EOS Risk Group. The tanker was reported to be in the vicinity of Malabo, on Bioko island, the port city and capital of Equatorial Guinea, on January 1, when it was boarded by an unknown number of pirates. EOS in its alert says the initial information is that two crewmembers were taken.

The Equasis database reports the vessel, which was built in 2007, is owned and managed out of Singapore. It has been operating as the Hana I for Raffles Shipmanagement since 2019 with its recent AIS data showing it operating around Cote d'Ivoire. 

The current AIS signal reports the vessel has now arrived in Douala, Cameroon. It is unclear what support the vessel might be receiving from local authorities. 

Tankers have been the target of attacks in the Gulf of Guinea over the course of 2023. Reports have been that the pirates often steal a portion of the vessel’s cargo. They took over a South Korean product tanker Success 9 (4,374 dwt) in April 2023 and later released the crew and vessel after taking fuel. There was a similar incident with another product tanker off Cote d’Ivoire in December 2022.

In March 2023, the Monjasa Reformer (13,700 dwt) was boarded while sitting idle approximately 140 nautical miles off Port Pointe-Noire, Congo. After holding the tanker for a few days, the pirates kidnapped six crewmembers who were held for six weeks. The French Navy located the missing vessel and with assistance from Nigeria, it was moved safely to port.

The ICC International Maritime Bureau (IMB) had warned at mid-year 2023 of renewed piracy activity in the Gulf of Guinea. They called for continued vigilance in the international security efforts to prevent a resurgence to the level of activity in previous years.

Marine Scientists Surprised by Toxicity of Plastic and Rubber Products

Images of recently hatched cod larvae showing spine deformities after exposure to chemicals leached from plastic 

(Photo: SINTEF)

PUBLISHED JAN 2, 2024 8:13 PM BY GEMINI NEWS

[By Christina Benjaminsen]

Tonnes of waste from standard plastic products have been uncontrollably released into the world’s oceans, where they gradually break down. But how harmful is this plastic to living organisms, and what is it in these plastics that is so damaging?

The plastic with which we surround ourselves contains a range of chemical additives that can leach out into water systems in the natural environment. This can happen both before and during the plastic degradation process. Even if it takes a long time for products to break down into microplastic particles, the chemicals start to leach from the plastic as soon as it enters the water.

Researchers have been trying to find out more about whether this phenomenon is harmful to animals, and perhaps also to humans.

“In this project, we’ve been focusing on the impacts on marine organisms of chemical additives in plastics”, says Lisbet Sørensen, who is a research scientist at SINTEF Ocean. “To do this, we’ve been studying a variety of marine species. During the first screening exercise, we examined two groups of microorganisms – bacteria and microalgae, also known as phytoplankton. These species are easy to work with and provide us with quick answers that we can use to help us map out the future direction of our research”, she says.

“Later, we worked with the eggs and larvae of cod, which is one of our most important natural resources”, says Sørensen. “We’re well aware that fish, just like humans, are more vulnerable to the health effects of pollution when they’re immature”, she explains.

Fifty different everyday products

“It is of course impossible to test every single plastic product available, so we made a ‘qualified selection’ of fifty items that we use in our everyday lives”, says Sørensen.

Among the fifty products were plastic bags, disposable cups, dishwashing gloves, car tire granules, a variety of children’s toys and balloons. And that was just for starters.

“The initial idea was simply to select ‘classic’ plastic products, but I fell for the temptation to include some items made of rubber”, says Sørensen. “And this proved to be a wise decision”, she says.

The research team behind the MicroLEACH project. From left: Stefania Piarulli, Amaia Igartua, Andy Booth and Lisbet Sørensen. 

Photo: Thor Nielsen

What happens when plastic breaks down?

The MicroLEACH project has been carried out by a cross-disciplinary team of international research scientists, including both biologists and chemists. MicroLEACH stands for Microplastics – Long-term Effects of plastics and Additive CHemicals on marine organisms.

Analytical lab work provided the team with a broad overview of the types and amounts of chemicals found in the various products.

“We were very surprised at the number of different chemicals we identified in these products”, says Sørensen. “Only 30 percent of the chemical compounds identified were found in two or more products. There were also a large number of chemicals that we couldn’t identify with certainty because they were not listed in established substance indexes. This told us how little we know about the composition of many of the everyday products that we have around us all the time”, she says.

The aim of the project is purely and simply to investigate how toxic these chemicals are to living organisms once the plastic products find their way into the marine environment. In recent years there has been a major focus on problems related to microplastics. When plastics are broken down, either physically into fragments or chemically due to environmental factors, they eventually end up as microplastic particles. However, long before this process has been completed, chemical additives in the plastics may leach out into the natural environment.

There were also a large number of chemicals that we couldn’t identify with certainty because they were not listed in established substance indexes. This told us how little we know about the composition of many of the everyday products that we have around us all the time.

“It was this issue that we wanted to address in the MicroLEACH project”, says Andy Booth, who is a Chief Research Scientist at SINTEF. “The question is: how toxic are the chemical additives we find in standard plastic products available on the Norwegian market, and how much of a problem are they compared with the microplastics generated by the products themselves?”, he says.

Booth has been working with marine pollution for many years and has also conducted research into what happens to nanoparticles that enter the marine environment.

Natural rubber is far from harmless

The research team looked into the effect of chemicals that leach from microplastics and rubber particles into the marine environment.

“What we found is that products that either consist of, or contain, high levels of rubber, had the worst impact on the microorganisms that we investigated in our experiment”, says Booth. “This was a little surprising – not least because untreated rubber is seen as a ‘natural’ product. We found, however, that it was among the substances that was most toxic to the microorganisms we were studying”, he says.

Worst of all were the chemicals that leached from rubber gloves.

“It’s well worth noting that chemicals added to natural rubber and used in dishwashing gloves proved to be the most toxic to the microorganisms”, says Booth. These are substances that we found in four of the fifty products that we tested – dishwashing gloves, car tyres, rubber balloons and disposable gloves”, he says.

Deformed fish larvae

A further study conducted by the project involved exposing cod embryos and recently hatched larvae to both microplastic particles and the chemicals identified in the plastics. The team also exposed both eggs and larvae to a combination of the two, because, in the real world, they cannot be distinguished from each other. The team has presented its results in an article and two scientific papers that can be accessed via the online platform ScienceDirect.

Initially, the researchers characterised and extracted the toxic chemicals from the various plastics and investigated their effects on cod larvae.

“What we observed was that some chemicals acted directly to prevent the eggs from hatching, while others exerted major physical effects on the larvae”, says Stefania Piarulli, who is a biologist and research scientist at SINTEF. “We discovered that the larvae developed vertebral deformities that reminded us of what we call scoliosis”, she says.

Research Scientist Stefania Piarulli in her lab at SINTEF Ocean. Piarulli is studying the toxicity of various chemicals that leach from plastic products. 

Photo: Thor Nielsen

Which is worse – microplastic or the chemicals?

But what about the microplastic particles? Are they harmful in their physical state, or is it the combination of their size and the chemicals that leach out of them that make them so toxic?

In order to investigate this, the researchers compared the effects of the particles and chemicals separately, and were a little surprised to find that the chemicals were essential to producing the toxic effect.

“The particular feature of this experiment is that we developed an entirely new method of ‘cleaning’ the microplastic of all traces of chemicals”, explains Piarulli. “This is the only way of being able to say anything for certain about the effect of the microplastic particles”, she says.

In other words, the team identified no toxic effects from the physical particles if they did not contain chemicals.

Elastic plastics – in a class of their own

The research team found that not all types of plastic are toxic. It is the combination of different plastic products that determine the level of toxicity, and elastic plastic products proved to be among the worst.

“This means that we now know that it’s possible to reduce toxicity in a number of products simply by selecting alternative polymer combinations during manufacture”, says Andy Booth. “It’s well worth noting that chemicals added to natural rubber and used in dishwashing gloves proved to be the most toxic to the microorganisms."

This article appears courtesy of Gemini News and may be found in its original form here.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

 

Turkey Refuses to Let Two Royal Navy Minehunters Pass Through Bosporus

Istanbul's skyline over the Bosporus (file image courtesy Alexxx Malev / CC BY SA 3.0)

PUBLISHED JAN 2, 2024 8:56 PM BY THE MARITIME EXECUTIVE

The Turkish government said Tuesday that it will not allow the UK to move two ex-Royal Navy minehunters through the Bosporus for delivery to Ukraine. Turkey controls the strategic waterway under the terms of the Montreux Convention of 1936.

The convention empowers Turkey to close the Bosporus to warships while a conflict is under way in the Black Sea - even to ships of Turkey's allies, like fellow NATO member Britain. 

"Türkiye immediately classified Russia's special military operation against Ukraine as 'war' and, in accordance with Article 19 of the Montreux Convention . . . closed the Straits to warships of the belligerent parties (Russia and Ukraine)," the office of Turkish President Recep Tayyip Erdogan said in a statement. "Our pertinent allies have been duly apprised that the mine-hunting ships donated to Ukraine by the United Kingdom will not be allowed to pass through the Turkish Straits to the Black Sea as long as the war continues."

Ukraine has already acknowledged that the much-needed minehunters won't be able to make it through the Turkish-controlled waterway, at least not until the war is over. However, the announcement from Ankara makes it official: the vessels will have to wait for a hoped-for conclusion to the conflict, when they would be handy for reopening ports and waterways. 

Since the outset of the invasion in February 2022, Russia has been determined to cripple Ukrainian shipping, and one of its tactics has been to lay naval mines in the Black Sea. In recent months, at least three ships have been damaged by mines along the route, and Ukraine says the number could be much higher. 

To counter Russia’s covert mine-planting missions, the UK is donating two older Sandown-class minehunters to Ukraine. The Royal Navy is transitioning to an unmanned vessel-based minehunting platform and is phasing out its manned mine countermeasures ships. The two donated vessels come equipped with two underwater remote-controlled mine-disposal vehicles and a high-resolution sonar. 

“These minehunters . . . will help save lives at sea and open up vital export routes, which have been severely limited since Putin launched his illegal full-scale invasion,” UK defense secretary Grant Shapps said last month. 

Top image: The Fatih Sultan Mehmet Bridge over the Bosporus (file image courtesy Alexxx Malev / CC BY SA 3.0)

 

Gas tax paused in Manitoba, returns in Alberta at a lower rate

The Canadian Press

As one province pauses the gas tax to provide savings at the pumps, another is bringing it back. 

The Manitoba government says that starting Jan. 1, motorists won't have to pay 14 cents per litre in fuel tax for the next six months.

The province has said it introduced the measure to help motorists with inflation.

Meanwhile, the Alberta government is reintroducing the gas tax after pausing it nearly two years ago. 

Starting Jan. 1, motorists in Alberta can expect to pay a tax of nine cents per litre at the pumps.

Alberta said the rate of nine cents is cheaper than the 13 cents motorists had paid before the pause. 

Alberta Finance Minister Nate Horner said the tax rate is based on the average price of oil. 

Should the price of West Texas Intermediate average US$80 per barrel, Albertans can expect to save some or all of the fuel tax, he said. 

“Alberta’s fuel tax is a predictable source of provincial revenue, helping to offset the volatility of other revenue sources," Horner said in a December news release. 

He said the province plans to provide an update on the fuel tax in the spring. 

In Ontario, the provincial government is to extend a break on the gas tax to June, so motorists are to continue to pay nine cents per litre.

Opposition parties in British Columbia and Saskatchewan have asked for a break on gas taxes, but those provinces have refused to do so. 

This report by The Canadian Press was first published Jan. 1, 2023.

 

Calgary home sales outpace long-term trends in 2023 as migration fuels demand

The Canadian Press

The Calgary Real Estate Board says the city saw 1,366 home sales in December, a 13.8 per cent increase compared with the same month a year earlier as the number of homes that changed hands in 2023 outpaced long-term trends and activity prior to the pandemic.

There were 1,248 newly listed units last month, up 21 per cent compared with December 2022, but the board says housing demand remained relatively high thanks to strong migration levels as inventory declined 2.5 per cent.

CREB chief economist Ann-Marie Lurie says supply levels were low compared to demand throughout 2023, resulting in stronger than expected price growth.

The unadjusted home benchmark price at the end of the year stood at $570,100, down around $2,600 from the previous month, but 10.4 per cent higher than December 2022.

The board says the detached market saw the most significant decline in sales activity in 2023 at nearly 20 per cent.

Apartment-style properties were the only type to report an annual sales gain, hitting a record high of 7,884.

 

What is the bond market and how does it affect Canadians?

Iva Poshnjari, BNN Bloomberg

Activity in global bond markets grabbed headlines in 2023 and piqued interest in fixed-income markets that are often overlooked by equity investors.

While many Canadians may not be tuned into bond market ups and downs, the health of the Canadian bond market has a direct impact on how people live their lives and the economic realities they face.

Here is an explanation from market experts on what the bond market is, how it works and why Canada’s bond market has been showing resilience.

WHAT IS THE BOND MARKET?

The bond market, also known as the fixed-income market, is directly tied to Canada’s economic success, according to experts.

It establishes the amount of lending banks can provide to borrowers and also provides the country’s federal government and corporations with access to capital, said fixed-income expert Hank Cunningham.

“The bonds market is 100 times the size of the equities market,” Cunningham, fixed-income strategist at Odlum Brown, told BNNBloomberg.ca in an interview.

It’s a place where borrowers and lenders meet, he explained.

The borrower, who sells the bond, is either a corporation or a government, he said. The lenders, who buy the bonds, are investors or private equity firms.

“The advantage an investor has in investing in the bond market is that their principal loan will be returned to them in addition to interest paid,” Cunningham said.

HOW DOES IT WORK?

For example, Cunningham explained, a government issues a bonds and an investor pays money for the bond.

The investor will get back their original investment while also receiving interest throughout the maturity of the bond, while the government gains access to capital.

A similar scenario plays when a corporation comes to the market and issues bonds, he said.

“Usually corporate bonds pay more interest, also referred to as yield, than a government bond does,” Cunningham said. “This is because corporate bonds can be riskier, depending on the company rating, as there is risk of a business failing but not the federal government.”

The cost for a retail investor to enter the bond market typically starts at around $10,000.

Alternatively, an everyday investor can choose to buy bond exchange-traded funds for much less, which will allow them to own a fraction of various bonds, said Cunningham. 

HOW DOES THE BOND MARKET AFFECT CANADIANS?

Even if the average Canadian isn’t buying bonds, their financial futures are still linked to the bond market, said Steve Locke, chief investment officer of fixed-income and multi-asset strategies at Mackenzie Investments.

“Most people who engage in the bond market do so through their bank when they ask to obtain a loan to fund a mortgage, which will determine where they live, their lifestyle, or an education,” Locke, who oversees $60 billion in fixed-income assets, explained in an interview with BNNBloomberg.ca.

Canadians who have gone to the bank to save money are also affected by the bond market, Locke said, as they are relying on what the bond market allows banks to pay in interest for their deposits, Locke said.

The health of Canadian businesses is also tied to bond market activity, he added.

“Corporations will go to the bond market to raise money when they need it,” he said. “This allows businesses to grow and by extension hire more employees and produce more output in the economy.”

HOW IS THE BOND MARKET PERFORMING NOW?

The price of a bond is driven higher or lower due to political risks, a country’s interest rate environment and overall economic factors like inflation.

Despite sticky inflation and high interest rates, Canada’s fixed-income market is showing signs of strength at the moment, according to Locke.

“Canada’s bond market activity has been healthy as of late and stacks up quite well to the rest of the world,” he said.

He explained that sector stability and strong regulations have propped up Canada’s bond market.

“Stability promoted in some sectors such as financials in Canada has been created through good regulatory policy and supported by the rule of law,” he said.

“All these things are healthy underpinnings for issuing bonds in the public market.”

WORKERS CAPITAL

Here are the changes to CPP deductions starting in 2024

Ritika Dubey, The Canadian Press

Middle-income earners will start seeing a larger portion of their paycheques going toward Canada Pension Plan contributions as of Monday.

A broader pension revamp began in 2019 as both the Quebec Pension Plan and CPP began phasing in enhanced benefits intended to provide more financial support for Canadians after they retire. So far, individual contributions — and the employer's matching portion — have primarily ticked upward.

The trade-off is that Canadians will eventually receive higher payouts once they start collecting their pensions. 

But as of 2024, the CPP includes a new, second earnings ceiling. For those who make more than a given amount, additional payroll deductions now apply. 

"The primary objective of these changes is to strengthen benefits and enhance overall financial stability for prospective retirees," said Alim Dhanji, senior wealth adviser at Assante Financial Management Ltd. in Vancouver.

Previously, everyone earning over the base amount (currently $3,500) contributes a set portion of their income, up to a maximum amount (last year's was $66,600) that increases slightly every year. Those who are self employed pay both the employee and employer portions.

Starting this year, the enhanced pension plan now has two earnings ceilings.

The first tier works similarly to the old system: just like before, workers contribute a set portion of their earnings to CPP, up to a government-set threshold — for 2024, it's $68,500. Those earning that amount or less won't see any changes to their current contribution rates. 

What's new, for anyone earning more than that amount, is a second contribution level that tops out at $73,200.

People in this group pay an additional four per cent on their second tier earnings, or the amount they make between $68,500 and $73,200. 

For 2024, that means a maximum $188 in additional payroll deductions. Overall, people earning over $73,200 will be contributing an extra $300 in 2024, compared to their previous contribution last year. 

The upgraded CPP policies, which continue phasing in through next year, were designed to significantly boost retirement income for Canadians — an increase from one-quarter of their eligible income to one-third. 

Anyone who has paid into CPP since 2019 will receive higher benefits, but the full effects will take decades to materialize, so  the youngest workers stand to gain the most. People retiring 40 years from now will see their income go up by more than 50 per cent compared to the current pension beneficiaries.

Dhanji noted the changes will not affect the eligibility criteria for retirement pension, post-retirement benefits, disability pension and survivor's pension.

The new, second threshold will affect employers as well as employees, Dhanji noted, since they are required to match their workers' higher contributions.

Employers have been affected by the phased increase since 2019, he said. Between that year and 2023, both workers and their employers saw contribution rates rise by almost a full percentage point. 

Canadian employers match their workers' pension earnings as a part of the policy. While the pension amount gets split between the employer and workers, freelancers and self-employed people are responsible for paying both portions — a combined 11.9 per cent for the first tier and eight per cent for the second tier.

"From a financial planning standpoint, employers can find assurance in the fact that these changes are designed to benefit their employees during retirement ... contributing to enhanced financial well-being," Dhanji said.

This report by The Canadian Press was first published Jan. 1, 2023.

Unimaginable excess': Bid to attract showy superyachts to Cape Breton under scrutiny

Michael MacDonald, The Canadian Press

Not so long ago, the largest community in Cape Breton was best known as home to one of the most toxic waste sites in North America: the infamous Sydney tar ponds.

Containing one million tonnes of oozing sewage and industrial sludge — left behind after centuries of steelmaking — the site has since been capped with concrete and transformed into a sprawling urban park that opened 10 years ago.

"It's a transformation from what was an industrial economy to one that is more service-based with tech businesses and education, ” says Terry Smith, CEO of Destination Cape Breton, the island’s tourism marketing organization.

With memories of the tar ponds receding, the port city is now trying to cultivate an upscale vibe — one that includes appealing to billionaires and their toys. It wants to become a destination for superyachts, the most expensive, luxurious boats in the world, which have become the ultimate status symbol for A-list celebrities, dot-com titans and lesser-known oligarchs.

Destination Cape Breton has hired Superyacht East Coast, based in Halifax, to attract to the island those who own boats like Archimedes, a 68-metre superyacht believed to be worth about $100 million. According to Superyachts.com, the vessel — as long as a 20-storey building is tall — has a marble Jacuzzi, a grand piano, an enclosed gym, a wood-burning fireplace and six staterooms.

Compared to some superyachts, which boast helicopter hangars and glass elevators, Archimedes is considered an understated boat.

Owned by U.S. hedge fund billionaire James Simons, the vessel spent at least a week last summer in Cape Breton, moored at the community wharf in Baddeck, N.S., where it caused quite a stir among the locals.

"The larger yachts are the ones that people tend to gravitate to," said Adam Langley, president and CEO of Superyacht East Coast. "They come alongside, and suddenly there's hundreds of people around buying ice cream or lunch and taking in the environment that these boats create."

And the economic benefits don't end there, Langley said. The owners of these floating mansions typically spend a small fortune on provisions after they arrive in port.

Once Archimedes had completed its eight-week tour of Canada's East Coast, the captain told Saltscapes magazine that its owner had spent US$400,000 on fuel, groceries, tours, guides and entertainment.

"Think of them as large, floating resorts," Langley said in a recent interview. "They'll spend thousands of dollars on things like flowers."

But Tom Urbaniak says there needs to be a broader discussion about using public funds to attract superyachts to the East Coast.

"What this is really about is marketing to an infinitesimally small group of oligarchs, the uber-rich, hyper-celebrities and the people who swoon around them," said Urbaniak, professor of political science and director of the Tompkins Institute at Cape Breton University in Sydney. 

"This is not just a celebration of wealth. This is a celebration of almost unimaginable excess."

The professor says that at a time when Canadians are being asked to make sacrifices to deal with climate change, it doesn't make sense to cater to rich people who flaunt their wealth in vessels that leave a massive carbon footprint.

"I haven't seen anything from Destination Cape Breton that there will be some kind of standard set to determine which ones get welcomed based on whether they pay taxes .... and whether they subscribe to the rule of law," Urbaniak said.

Smith says attracting superyachts is a small part of a broader strategy aimed at getting more boaters to come to the region. And he challenged the argument that superyacht owners represent the worst kind of polluters.

"I don't agree with that," said Smith, whose non-profit organization gets most of its budget from a levy charged to those who pay for accommodations in Cape Breton, as well the provincial and federal governments. "There are electric superyachts now. I think we're going to see a transformation in them in terms of cleaner fuels and cleaner ways of operating."

As for courting oligarchs, Langley says they're not coming to Atlantic Canada anyway.

"We see more explorer yachts that are not the huge, 600- and 400-foot superyachts," he said, adding that superyacht builders are now keen on using hydrogen technology to propel their boats.

"These are usually 200 feet and less, and they're usually owned by people who are very sensitive to where they are going and operated by captains who are respectful (of the environment)."

Meanwhile, Langley says he's working on a marine tourism strategy for Nova Scotia that will include sections on sustainability and best practices for marinas and waterfronts. 

"I am very sensitive to that," he said. "I grew up in Nova Scotia along the Northumberland Strait and I'm lucky enough to have a place in Baddeck .... These places are very special."

This report by The Canadian Press was first published Jan. 1, 2024.