Tom Fletcher, in his July 5 column “Rough seas ahead for BC Ferries” is a bit at sea himself on ferries.
It’s understandable; the brave new world of the 2003 Coastal Ferry Act is complicated. Even ex-Transportation Minister Kevin Falcon used to get confused and say his government didn’t have anything to do with ferries. (Good that he’s clear on that now!)
Still, there’s a lot to like in the law. For one thing, it gives us tons of information. For example, BC Ferries’ annual reports to the commission on bcferrycommission.com. That and other public information could help Mr. Fletcher.
First, he implies the new $80 million is as a sweetener for users. Well, no. It’s a sweetener for investors. Up to now BCF had to pay investors a 14% return — a requirement flowing from legislation. Now, government has removed the requirement. But to keep the company looking good to investors, it had to improve some financials. And that meant injecting new capital.
Yes, the money happens to help fares. It doesn’t lower fares, just lowers fare increases. Instead of paying almost 10% more a year for three years, we’ll pay 4% to 5% more – if we’re lucky.
Second, Mr. Fletcher says the ferry commissioner will review service. Well, no. Government will. Or rather, government will cut the cheque for the consultant it’s about to hire. It wants the consultant to help find $30 million in cuts.
That shouldn’t be hard in a big company. But it’ll be harder than it seems. BCF has three big costs (fuel, labour, cost of capital) and big constraints. There’s not much BCF can do about things like fuel price and labour contract. And some constraints, like new Transport Canada rules, add lots to costs.
Then there’s all the empty deck space government often mentions. Like bus service, ferry service has to plan for peaks. Not all runs can be full all the time. Still, most users do think there may be reasonable cuts. But it needs careful study.
Most importantly, cuts have to be reversible if coastal economies improve. We can’t plan for an economic trough. That would pretty much guarantee we’d stay in the trough. W.A.C. Bennett set up BC Ferries because he realized ferries are an economic stimulus.
And finally Mr. Fletcher’s last point, that taxpayers subsidize island dwellers’ “splendid isolation”. He implies that more subsidy isn’t the answer. Well, actually, yes it is.
Sure, efficiency can improve. But three separate reviews found BCF to be well-run, so not much more fat. Sure, we can demand lower executive salaries. But that wouldn’t even dent fares.
The main point is ferry service is affordable public access to the whole coast, serving hundreds of kilometres of coastline, and 20 million passengers a year. Ferry service will never pay for itself. Like transit or highways, it’s public infrastructure. And affordable, stable service benefits everyone. The level of public funding for ferries is much lower than for transit, and probably lower than for highways.
Consider all that and it quickly becomes clear that ferry service is a bargain at $200 million, and money to keep it affordable is also a bargain.