Public ferry service for the British Columbia coast began more than 50 years ago because private-sector operators of the day showed little regard for ferry users.
Fast-forward to 2008 and, as Yogi Berra would say: “It’s déjà vu all over again.” But now it’s B.C.’s public ferries system, one of the world’s largest, that’s running aground. At the helm is Premier Gordon Campbell, whose Liberals began transforming B.C. Ferries into a quasi-private organization in 2003.
But things have not gone well, with the expected savings nowhere to be seen and fares rising dramatically. In fact, the escalating cost of using the ferry is depressing traffic, which last year totalled 21 million patrons on 25 routes. Coastal communities and local businesses hit by the decline have warned the government that rising fares and increasingly overburdened services are hurting ferry-dependent economies.
The scale of the problem is significant. On some routes, fares have almost doubled in the past five years. As well, the 37-ship fleet is aging, but the government refuses to increase its subsidies to the former Crown corporation it cut loose and ordered to float on its own.
The move marks an historic shift. When the late premier W.A.C. Bennett created the original Crown corporation to run B.C. Ferries, he decreed that the service was part of B.C.’s highways system and thus was as strategically important as the Trans-Canada Highway. Subsequent governments of differing political stripes adhered to that principle — until Campbell came along.
His Liberals are just as right-wing as most Conservative governments in Canada. So, it wasn’t surprising that Campbell passed the Coastal Ferry Act in 2003, which was supposed to put B.C. Ferries on a private-sector footing and, ironically, improve the corporation’s sustainability. Unfortunately, the opposite has occurred. Forcing B.C. Ferries to stand alone financially, with an aging fleet and facing soaring global fuel costs, has put it in an impossible position.
While travel frequency and revenue are declining in reaction to higher fares, Victoria is turning its back. And when B.C. Ferries president David Hahn was asked recently if the company would help stakeholders study the economic impact of fare hikes on small ferry-dependent communities, his reply was: “No.”
As a result, many British Columbians feel they’ve been abandoned by B.C. Ferries and Victoria. “Surging ferry fares could threaten the viability of B.C. Ferries’ whole system and cause substantial economic and social trauma to coastal communities,” the B.C. Ferries advisory committee, a non-government group of community volunteers that gets limited financial assistance from B.C. Ferries and the Ministry of Transportation, recently warned.
Or, as one irate ferry user wrote to the Victoria Times Colonist: “We’re not expecting a free ride, but we do expect fair fares based upon provincial responsibility for a provincial transportation system.”
Not surprising, talk of building a fixed link between the Lower Mainland and Vancouver Island has resurfaced. It’s been years since any serious discussion of such a bridge has occurred, but if the ferry system deteriorates further, the option will gain momentum even though it would cost billions of dollars.
In the meantime, the B.C. Ferries advisory committee says B.C. Ferries needs to spend about $725 million between 2012 and 2020 to replace 16 of its ships. B.C. Ferries is adding its first three replacement vessels this year.
That’s helped push the company’s debt to about $1 billion, with no signs of assistance coming from Victoria. But B.C. Ferries has to maintain a good credit rating to finance more new ships, so it must perform financially to satisfy bondholders.
Thus, we have a vicious circle of rising fares, falling passenger use and declining profits. In fiscal 2007-08, earnings fell by $11.7 million to $37.1 million. A slowing B.C. economy and Campbell’s new carbon tax on all fuels don’t help, either.
Even in its 2007-08 annual report, B.C. Ferries warned that if costs and fares keep rising, declining ferry traffic and, hence, declining revenue is a growing risk.
Finally, only a few days after B.C. Ferries’ annual meeting, a new poll showed that the New Democratic Party had pulled ahead of the Campbell Liberals for the first time in many years. With a provincial election set for May, the premier should take heed. IE
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