Tuesday Tales from the Archives: The Struggles
December 6, 2017
Early Days of the Muskoka Steamship & Historical Society
The bunting and the flags snapped and fluttered in the Lake Muskoka breeze on that brilliant sunny day June 1, 1974. The ship, RMS Segwun, awaited her launch high above the crowd of thousands, craning their necks to be the first to spot Prime Minister Trudeau who would swing the champagne bottle to launch her into her future of sailing the Muskoka Lakes. Deemed fit to float, but not to sail, in 1974, Segwun was released from her dry dock on Muskoka Bay.
And so began a decade of restoration of a ship that had lain at dockside as a charming and informative Steamship Museum from 1962 to 1973 when Segwun was dry docked for refit and restoration. In the end the restoration would cost more than one million dollars, four times the original estimate!
The Muskoka Steamship & Historical Society was formed to acquire the Segwun from the Town of Gravenhurst in 1973 and assumed the responsibility of preserving the vessel. She was not to be a diesel ‘bus on the water’, nor a reproduction, but a fully operating steamship commanded by a Captain and a crew of eleven as it was in the days of yore, 1887 to 1958.
Segwun’s crowds of passengers were still a dream of the future. The revenue without those passengers could not meet the costs of operating an industrial age artifact. Governments, donations and the Ontario Road Builders Association had generously funded the restoration over the past decade. Now the Society had to find a way to create the revenue to operate the business in a limited season. This was to prove a tall order!
How to finance a 19th century passenger steamer under 20th century conditions would become the major challenge for the Navigation Company and the Historical Society alike. Expert accountants and others stated that this was an impossible goal. The Coast Guard was adamant that Segwun would be restricted to 99 passengers instead of the 243 of former days. This was not a profit making business case!
The Charter of the original operating company The Muskoka Lakes Navigation & Hotel Company was resurrected to operate and manage the ship but the ownership of the ship remained with the Muskoka Steamship & Historical Society. The Society is the Owner, the Company is the Operator.
Let the Meetings begin! For nearly a decade the Society and the Company met and struggled to find a way to live up to the promise of sailing Segwun for the next hundred years. From that magnificent launch in 1974 the restoration remained incomplete until 1980. By June 1981, Segwun was deemed fit to sail and plans began to accept passengers that summer.
Looming large was the big financial picture of revenue versus expenses for the operating season and the winter season when the hard work of planning and promotions required funding that just was not there without a strong passenger base. No one wanted to see Segwun return to a static dockside display. Operate her and make her last a hundred years! This was the Society’s challenging goal. How hard was it going to be?
First, ask the Coast Guard to increase the load capacity from 99 passengers to a viable number. No, the Coast Guard was adamant- the 99 passenger limit is firm in order to meet modern marine safety standards. They would not approve an increase in the number of passengers. And how to make the business case? Appoint an operating company!
In June of 1981 the Company was ready to make trial runs, proposing an inaugural cruise on June 27. The Ministry of Tourism granted a further $100,000 to complete the restoration. The Society approached the Town of Gravenhurst to begin planning a development of the Harbour with RMS Segwun the star attraction.
And so the ship sails again and once more the haunting steam whistle called the passengers to the wharf and the people of the Town of Gravenhurst picked up their ears and smiled happily that she was sailing again.
But the numbers come in and they were bad, really bad. The work of marketing the ship was not feasible with such low passenger numbers and such low funds. The Society passed a resolution in September 1983 to “canvas the possibility of making an operating contract with an individual or organization for the operation of RMS Segwun in the 1984 season”. A one manager office and limited funds could not meet the challenge of promoting her as a major attraction and pay the cost of operating her.
The Navigation Company appointed Russ Brown as General Manager and he proposed that the ship be operated “along hotel financing lines” and that the local creditors are paid off as a top priority. He proposed a ‘fund flow’ plan at the Bank be established to ensure a cash flow throughout the off-season.
The Shareholders of the Navigation Company were asked to turn in their shares as donations to the Muskoka Steamship & Historical Society by January 10, 1986. The Company wrote to the Shareholders explaining why the shares must revert to the Society, and expressing satisfaction that at the very least the Company was able to keep Segwun sailing. The future of the ship must be that of a non-profit association operating as a ‘charitable’ institution under the Income Tax Act.
The District of Muskoka was approached to guarantee a bank loan to provide working capital from the fall of 1983 to the spring of 1984. In November 1983 a Company ‘survival’ meeting was held to report that the Company needed $65,000 to $90,000 to carry on over the winter and to promote the 1984 season. The Society waived the Lease Payment. The Bank refused to loan the Company funds to cover pre-season expenses. A local citizen and others made special donations to keep the operations going, the only solution possible at this time!
And so the season of 1984 and at last good news! The Navigation Company appealed the bank decision on the loan and an operating loan was granted to the Company to run the Ship in 1984 and 1985. Two special Toronto TV campaigns in 1984 assisted in promotion. The Toronto market woke up to this wonderful steamship, almost at their front door. Everyone in Ontario became aware that something special was happening in Muskoka. The Canadian Coast Guard advised that the Five Year Inspection must be completed, and the Ontario Development Corporation (ODC) guaranteed the loan thus providing a level of financial stability to meet required safety regulations.
A marketing boost was created when the made for TV movie ‘The Boy in Blue’ about Canada’s famous rower, Ed Hanlan, was made on-site with Segwun featured and cheering crowds everywhere. Passenger sales reached nearly $150,000 in July and August with 77% occupancy but coal expense was $206,000 in the same period. The Society and the Company agreed that local suppliers would be paid.
A special joint meeting of the Society and the Company was called by Company chair Jack Hastings in October 1984 and a motion to surrender the Company Lease to the Society was approved. The town agreed to rebuild the Marine Railway for the 1985 Coast Guard inspection.
Professor Gordon Shaw, School of Business Professor, York University, assigned himself the task of summarizing and analyzing the passenger data to determine which trips were profitable and which were not. The operating costs by day and by trip were analyzed and developed to support the marketing plan of Segwun.
The Navigation Company announced an operating loss of $42,000 after the third season of operation. New marketing efforts were made to pre-sell the cruises, especially those in June.
The Society and the Company stated that the operation of the Segwun as a non-profit foundation model was a reasonable goal and that the evidence suggested that this provided a model of operation for the future, but the ship would still need strong public support. Segwun was still in debt and this left few dollars for marketing!
The Ontario Ministry of Tourism began to attend meetings and make recommendations. At the Ministry’s urging letters were sent to 21 private operators offering the lease. The Navigation Company was the sole responder. No one else thought they could run this Ship! The Society agreed to extend the lease to the Company for 1985. The Ministry of Tourism granted $75,000 to replace the grates on Segwun, an urgent maintenance need.
With the work on the harbour area in the planning stages the Town of Gravenhurst drew up a plan for ‘Sagamo Park’ including a footprint for the future Museum and Ticket Office in the ‘Muskoka Wharf’ style. And so the way was cleared for future public and private development in the harbour with RMS Segwun, the star attraction.
The Company reported Revenues of $181,738 in 1985 up from $180,859 in 1984.
The Society appointed a special committee to plan for the Centennial of RMS Segwun in 1987 with the Lieutenant Governor of Ontario, Lincoln Alexander as the main guest. Thousands attended.
In 1992 the Navigation Company recommended to the Society the construction of a building to accommodate the Company’s shore-based operations and to provide the Society with Display space. The Society agreed and a federal grant of $150,000 was acquired to finance the construction of the historic type buildings in the Muskoka Wharf Style.
This ticket office and museum served the staff and passengers from 1992 to 2006 when Muskoka Wharf was in filled with new development. The new interactive Muskoka Boat & Heritage Centre (Editor: Now known as Muskoka Discovery Centre) was opened replacing the previous museum
Segwun whistle still sounds across the Town and over the waters of Lake Muskoka 40 years later, a tribute to the history of the steamship era and the citizens who served as members of every committee, the Government of Canada, of Ontario, the Town of Gravenhurst and the Ontario Road Builders.
Forty years later we look at what a struggle it has been as the Company and the Society work together to make the dream of RMS Segwun prevail into the future.
Sylvia Purdon, a Past President
With input from Richard Tatley, historian and author
To become a member of the Muskoka Steamship & Historical Society click here. We continue to be a not-for-profit charity with the mission to present dynamic, entertaining and educational experiences through our iconic steamships and the Muskoka Discovery Centre.