FERRY FARES TALKING POINTS

By Bob Sarti & William Thomas

The government has decreed the principle of user-pay for island residents. That means we are supposed to bear the full cost of maintaining the ferry service. But how does that compare to comparable communities in the rest of the province? There are more than 30 communities in B.C. with populations equal to or less than those of Denman and Hornby combined. Every single one of them has free access - a road leading right into town. They don't have to pay a toll to get home. Those roads were built and are maintained from general revenues, in some cases at great expense, because of the terrain and the distance involved.

Road users pay only 70% of the full cost through gas taxes and other direct levies, and we all pay the balance of the cost - whether we use their roads or not.

SkyTrain, SeaBus and West Coast Express riders are rightly subsidized. But islanders are expected to pay 100%. Island communities deserve the same consideration. It's only fair.

There are two ways to realize this. One way is for the government to support the ferry system to the same extent it would fund roads between points of comparable distances. Ferry users would pay the difference. This was the way B.C. Ferries operated until the Liberals started jacking up fares.

The other way has the users paying what they would pay to own and operate a car over equivalent distances to the ferry routes, with the government paying the difference. This is a method now being tried in Scotland and in Newfoundland.

The Scottish system is about to start on a 30-month pilot program with fares based on the equivalent cost to the operator of operating a car on roads of the same length as the ferry journey based on a road equivalent tariff set in April, 2007. These rates represent fare reductions of up to 50%. No fares shall be increased.

In March 2007, the Newfoundland Labrador Government cancelled a proposed 5% fare hike and implemented a Road Equivalent Tariff for the 2007/08 fiscal year. The result of this tariff is that 14 of 70 passenger rates decreased while six of 14 vehicle-plus-driver rates decreased. No rates were increased. The anticipated net result will be a 17% fare reduction this fiscal year compared to the previous year.

Newfoundland and Labrador
Government contribution as percentage of total revenue:
2004/05: 82.0%
2005/06 83.5%

There were no fuel or other surcharges beyond the posted fares

Brutish Columbia
Government contribution to BC Ferries as percentage of Minor Route Group revenue:
2004/05: 48.5%        
2005/06: 47.2%        
2006/07: 43.2%

Surcharges beyond the posted fares are going ballistic, and do not apply to the delivery of other provincial essential services. Yet.

The so-called privatization of B.C. ferries is actually a multi-million dollar financial sleight-of-hand and bookkeeping flim-flam in which assets owned by the public - ferries, terminals, foreshore and more - have been handed over to a quasi-private corporate entity, the B.C. Transit Financing Authority.

And these very same assets have now been leased back to the public for 60 years. What we owned before, we now only lease.

The new corporation has the responsibility for rebuilding the fleet, which used to be the government's job. All the ferries are now heavily mortgaged against a $1 billion-plus debt and if the ?business? fails, we, the public, have to pay to bail it out. The taxpayer is liable for any payback shortfalls.

What was once a public service in need of administrative overhaul is now a group of floating profit-and-loss centres driven by a business ideology in the pursuit of profit, not service.The need for the corporation to generate money (and pay interest) that used to be part of regular provincial spending will drive fares up massively by 2011.

The Liberals claim these changes take the politics out of the ferry operation, and help it run more like a business, at arms length from government interference. But this is an illusion since the ferry board is dominated by government appointees, the controlling share in the company is owned by the government, and it's the government that decides on the annual subsidy that determines the ferry fares. In truth, it's the government calling the shots.

The privatization gives the government the chance to tear into the ferries while claiming it's not really involved.

The government backed the corporation during the most recent labour dispute, forcing the ferry workers back to work and imposing a contract with zero per cent wage increases during the first three years. The new Coastal Ferry Act allows management to ignore the Labour Relations Code in overruling collective agreements with ferry workers. The provincial auditor can also be barred from examining the books of this ?private? ferry company. And if you have a problem with this, don't try addressing your complaints to the provincial Ombudsman, or using the Freedom of Information Act to find out what's happening with your ferries. Neither avenue applies to the new ferry corporation.

Not everyone lost on the deal. The new CEO of B.C. Ferries, David Hahn, is paid more than $300,000. His qualifications for the job? In his previous employment, he presided over the sell-off of a major US aviation company that affected 25,000 employees and operations in 30 countries - as well as massive losses to shareholders and taxpayers.

Is Hahn's agenda similar in BC?

Let's not forget B.C. Ferries' hard-working board of directors. After voting to impose further crippling fare hikes on island residents, the board members rewarded themselves with a retroactive $233,000 pay hike on top of salaries and bonuses totaling $730,000 for attending meetings to increase fares and vote themselves pay raises. The government says it can't do anything about it because the ferries are now a ?private? corporation - owned by the BC Government!

But the government's appointed board is prevented by law from voting for pay increases for workers. Because that would affect ferry fares.

The 14 B.C. Inland ferry routes carry 2.5 million passengers a year. That's a lot of passengers. And they ride for free. As BC Ferries says on its website, the 14 fresh water ferry routes are an ?integral link in British Columbia's transportation network.?

Why? Because the Inland routes carry commuters, truck deliveries, people trying to get home and vacationers to varied locations, some nearby, some further away. Sounds a lot like the coastal ferries, doesn't it?

Except on the Mainland and in the Interior, drivers who don't want to ride the ferries for free can drive the long way around.

Islanders don't have either option.

The BC Government claims it doesn't set ferry fares. It says its hand-picked Ferry board does! And the Campbell's cabinet decides on the level of government subsidy. The bigger the subsidy, the lower the fares. Right now, the subsidy is $135 million a year to the smaller routes. It has not gone up to offset other inflationary prices for years.

Yet, the Campbell government has come up with nearly $2 billion for a brief 2010 Olympics blowout that will be accessible to only a wealthy international elite able to afford ozone layer-dissolving airline tickets by then.

On the other hand, if the government raises its contribution to island ferries, fares will go down, communities will flourish - and its tax base will expand.

Hello?

Hello?

Is anybody listening?

If the government is going to forget about us…

We are going to forget the government.

By reducing ridership, rising fares guarantee further "losses" on island runs that used to be part of the highways system and, like provincial roads, were never intended to return a profit. Sure enough, in the last quarter of 2007, crippling island fare hikes saw BC Ferry Services lose almost $8 million - nearly five-times the amount lost during the same period the previous year.

On the Gulf Island routes overall, after a 43% increase in fares even passenger traffic is dropping. Another 20% fare increase scheduled for October could be our death knell.

Islanders resent being kicked around as apolitical football. The Liberals blame the NDP for everything - including the ferries mess. True, the NDP didn't do so well in modernizing the ferry fleet. But the Liberals are making the situation worse.

The NDP made a major effort to keep up with demand, but not on the back of the island residents. They built the three "fast ferries" for the cross-Strait traffic at a cost of $500 million. The fast ferries were much reviled because of design flaws that prevented them from being put immediately into service.

But that's not the whole story. The fast ferries were built in B.C. shipyards; all the money spent went to B.C. workers and companies, all of whom paid taxes. A new generation of B.C. shipyard workers learned to work with the new technologies.

Enter the Liberals. They insisted on selling off the fast ferries virtually for scrap ($19 million), instead of retrofitting them in B.C. shipyards for one tenth of the $542 million it took to contract out the new Super-C coastal ferries to shipyards in Germany. Reputable marine engineers say the fast ferries could have been retrofitted for $45 million.

It was a crass political maneuver to make the NDP look bad. All the money spent went to foreign companies and workers and the German economy, with no benefit to B.C. or the Canadian ship-building industry.

Photos by William Thomas