The CAT, a high-speed passenger ferry, departs Yarmouth, N.S. heading to Portland, Maine on its first scheduled trip on Wednesday, June 15, 2016. An international ferry service between Canada and the U.S. could move to a new port in Maine, a change that could see Nova Scotia paying for upgrades to an American town's cruise ship docking facilities. THE CANADIAN PRESS/Andrew Vaughan

HALIFAX - An international ferry service that links Canada with the United States could move to a new port in Maine, a change that could see Nova Scotia paying for upgrades to an American town's ferry docking facilities.

The service, operated by Bay Ferries Ltd., already receives an annual operating subsidy from the province of about $10 million.

In a proposal submitted Thursday to the town of Bar Harbor in Maine, Bay Ferries has offered to lease a portion of the scenic town's ferry terminal to use as the U.S. port for its high-speed catamaran ferry service.

Bar Harbor town manager Cornell Knight confirmed receiving the proposal, which was sent out to the town's council ahead of next Tuesday's meeting.

The proposal comes a month after Bar Harbor residents voted to purchase the town's shuttered ferry terminal from the state for $3.5 million.

"The company has previously said they would invest $3 million into the property in order to get it into shape for them to operate next year," Knight said.

In fact, it would be Nova Scotia that would cover the bill to upgrade the ferry facilities, a cost the province's transportation minister appeared prepared to consider.

"There will be a cost, we're pretty confident of that," Lloyd Hines told reporters after a cabinet meeting. "I'm open to it ... but at the end of the day, it's a decision that will be taken based on the business inputs that are provided by the operator."

Hines said "at first blush" moving to Bar Harbor seems to be a good proposal. It's closer to Yarmouth, which could cut down on fuel and crew costs, he said.

In addition, Hines said there may be an "opportunity" to pull visitors from Acadia National Park near Bar Harbor, which attracts about 3.5 million visitors a year.

Bay Ferries CEO Mark MacDonald said the ferry service could commence operations in Bar Harbor as early as next season. But he said the proposal is still in the preliminary stages.

"What we're suggesting, between now and Oct. 1, is for all the parties to do their due diligence ... to do background work and determine whether this is feasible," MacDonald said.

Before 2009, the ferry service between Nova Scotia and Maine operated out of both Portland and Bar Harbor.

However, a cut to the service's operating subsidy prompted Bay Ferries to end the service in 2009.

After the province decided to reinstate the subsidy, the passenger ferry service resumed under Nova Star Cruises in 2014, travelling between Yarmouth and Portland before Bay Ferries took over the route in 2016.

Marla MacInnis, a spokeswoman for the Transportation Department, said the provincial subsidy for the 2018 sailing season is expected to be $10.9 million.

"It's an increase of $1.5 million over the budgeted subsidy for 2017," she said in an email.

"Rising fuel costs account for a large portion of the $1.5 million increase in the subsidy as well as revised revenue projections to reflect steady growth."

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