The provincial government is pumping an extra $80-million into BC Ferries over the next four years and making amendments to the Coastal Ferries Act in order to combat skyrocketing fares while keeping the company profitable.
However, the government is also looking for ways to cut inefficiencies which is likely to include reduced sailings.
The move is the government’s response to a review of the BC’s ferry system by the Ferry Commissioner Gord Macatee. In the report, Macatee makes a number of different recommendations, many of which require changes to the law, which is exactly what the government plans to do.
“This is really about the tax payer, it is about the ferry user and it is about the ferry corporation. All of us have to come together make sure that we have an affordable and financially sustainable ferry system,” says Transportation minister, Blair Lekstrom.
The bill’s amendments place new emphasis on the commissioner’s role to balance the interests of ferry users, such as passengers and ferry-dependent communities, with that of the company and it’s bottom line. The commissioner is being given greater power to control price caps and scrutinize and control the company’s policies in order to keep the trend of skyrocketing fares at bay, including ordering fuel deferrals and discounts.
According to the commissioner’s report fare prices along northern routes have risen by 78 percent over the past eight years, while the amount of passengers on each sailing (capacity utilization) has fallen by almost 40 percent during the same period. It costs almost $500 for a family of four and their car to go on a round trip from Prince Rupert to Haida Gwaii.
The government also plans to tie fare increases to the rate of inflation, but it is unclear how this will affect the increases already planned for the next 3 years.
Lekstrom says that while a $500 price tag on a trip to the mainland is hefty, he points out that they would be much higher if they weren’t already heavily subsidized by the government. The government is planning to do consultation with local communities on what measures could be taken to improve the affordability of ferry service.
“I do not want to leave the impression that there will not be some pain on the part of communities . . . we are asking people to come to the table to talk about trade-offs,” says Lekstrom.
One option, which was recommended by the commissioner in his report, would allow municipalities to spend their own money to help subsidize fares on specific routes. Prince Rupert has only recently finished its budget and despite cuts still had a deficit. The likelihood that the community would have any money to spend on subsidizing BC Ferries is small.
When this was pointed out to him, Lekstrom said that none of these measures are mandatory, and that the consultation’s purpose is to find ones that fit with the communities’ abilities and needs.
“I’m not sure they would actually have to entertain buying-down fares, that would be their choice through the discussion. Part of what we are trying to do is engage in the discussion with them. If we have low utilization rates, what can we do?”
The province is planning to decrease inefficiencies by pushing for fewer sailings for routes with mostly empty ships. Lekstrom says that there are routes where the ships are only using under 30 percent of their capacity. He says that sailings could be cut down to which would save costs and lower fares. The capacity utilization rate of the northern routes is about 45 percent.
Not every local government is going to want only to tweak the semi-privatized ferry system. In the past, the Skeena-Queen Charlotte Regional District has said it wants to see the ferry system returned to the jurisdiction of the Highways Act effectively making it a public system once again. Board members, especially members from Haida Gwaii communities, argue that the ferry system is essentially their road to the mainland and should be funded by government like they would any other.
Lekstrom says that he hears this position every so often but says the commissioner’s review shows that the semi-private system works well, and says making the system public again wouldn’t solve the issues it does have.
“I think if they do their homework and have a look at it, regardless of whether this service was back under the administration of the Ministry of Transportation or being provided as it is today would be facing these challenges.
Prince Rupert’s MLA, Gary Coons – who is also the provincial ferries critic – agrees with the regional district though. He says that BC Ferries problems are the result the policies put in place by the Liberals over the past eight years.
“They spent just under $2-billion dollars in the past eight years on vessels and terminals. That in should have come under the costs of constructing highways and not put onto the users. That’s why fares have skyrocketed,” says Coons.
“We need to do an overhaul of the system. I think that the minister acknowledges that the system is at considerable risk. I don’t think these additional dollars are going to keep the system afloat as the minister implies.”