2 June 1977, during its first run of the year between Happy Valley-Goose Bay in Labrador and Lewisporte in Newfoundland, the MV William Carson struck an iceberg off Labrador and sank. Fortunately, all 129 passengers and 29 crew were successfully evacuated to lifeboats, from which they watched the ferry sink. The Canadian Coast Guard and Canadian Forces helicopters rescued the survivors.
Built in 1955, the William Carson was designed to service the ferry route between North Sydney, and Port-aux-Basques. It was the first ferry to carry passengers and cars to and from Newfoundland with 262 passengers and 60 vehicles. As one of the largest ships built in Canada at the time, it was too large to dock in Port-aux-Basques and initially sailed between North Sydney and Argentia for three years until the Port-aux-Basques harbour could accommodate its size