PT4 Fares, Economies and Sustainability

The Fare Cap

MAY 21, 2015 – The Ferry Advisory Committee chairs were pleased, and surprised, with the announcement of the 1.9% preliminary fare cap. Surprised, because with a nominal 2% inflationary increase in expenses, and the substantial capital program, we were expecting a much higher cap. Given the ground rules – existing service levels and assumed continuance of FY2016 service fee – we realize getting to a 1.9% fare cap was a major achievement. Any further reduction that might be considered between April and June would require additional accommodation.

Sustainability

Sustainability, the term, is borrowed from environmental science referring to ‘endurance of systems and processes’. We hear it referred to in terms of sustainability of the coastal ferry service, as if BC Ferries is in danger of no longer ‘enduring’. This seems to us like wondering if UBC or BC Transit or VGH or the Coquihalla Highway will ‘endure’. In fact, we believe that all four of those, as well as BC Ferries, will (and must) endure, hopefully in good health. That good health will depend primarily on adequate funding from governments and ‘customers’. All five are vital elements of the broad community infrastructure. The demise of any is inconceivable.

We are more concerned with the economic sustainability of the ferry-dependent communities served by the Minor and Northern routes, and Route 3. The ferry service is the economic life-line for these communities.

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A good start – A long, long way to go

20 MARCH 2015 – Chairs of BC’s Ferry Advisory Committees are encouraged by the newly announced 1.9% cap on annual average fare hikes starting in 2016. But they say the small increase fails to address the fundamental problem: the cripplingly high existing fares.

The unavoidable comparison is to the hypothetical camel with the breaking back. The camel has been loaded with 50-pound bales of straw. When the breaking point is reached, there’s little joy in reducing the weight of the next bale to only 10 pounds. The 1.9% increase is that 10-pound bale of straw.

As with the camel, the ferry users’ problem is the burden that preceded the 1.9% increases. It needs to be addressed.

The extraordinary fare increases of the past decade have resulted in traffic collapsing to its lowest level since 1990. The decline in traffic, particularly since 2008, has resulted in a parallel withering of the economic and social vitality of coastal ferry dependent communities. Ferries are the lifeline service for people and for businesses. There is no alternative.

“We watched traffic fall away as fares escalated for the past decade. Our experience tells us that ferry traffic and coastal communities will not and cannot recover until the excessive fare burden is removed,” says Brian Hollingshead, chair of the Southern Gulf Islands FAC. “This means a fare roll-back, not a modest increase.”

If the Province is serious about the economic sustainability of dozens of coastal communities, it’s time to assess the past and future impact on these communities of the current ferry fare regime.

We recognize that fares and funding need to strike a reasonable balance between the interests of the Provincial treasury, BC Ferries and ferry users. “Yet ferry users, who contribute more than half a billion dollars a year in fares, have paid far too high a price,” says Keith Rush of Thetis-Penelakut FAC. “It’s time the load was redistributed to provide some relief for those users who have seen their fares rise as much as 120% in an 18%-inflation period.”

The Commission report shows ferry users are presently paying 100% of BC Ferries operating costs. That’s higher – much higher – than in comparable ferry systems, including Washington State Ferries and Marine Atlantic Ferries, cited in the Commissioner’s Efficiency Review.

We are at a critical juncture. We ask the Government to consider rebalancing the equation by means of a sufficient funding increase to provide a significant fare roll-back. It’s fair, it’s vital.

Contacts

Latest fare hikes just prolong ferry troubles

31 MARCH 2014 – Ferry fares continue their relentless climb into regions of unaffordability, accompanied by repetitive rhetoric from the provincial government that is disconnected from acceptance, or even understanding, of the needs of BC’s coastal region.

With the fare increases taking effect on April 1 and fuel surcharges imposed in January, most passenger fares are up 8.4 percent and vehicle fares are up 7.4 percent over last year, yet another round of fare hikes far above inflation. And seniors now have to pay for travel from Monday to Thursday.

On those northern routes that will continue to operate, fares are up only 1.5 percent, but the fare break is too little, too late. On the northern route due for outright elimination, Route 40 serving the central coast, fares increased 60 percent and traffic dropped 43 percent in a straight line since 2007, under operating conditions that ran counter to local residents’ suggestions to improve the route’s efficiency. Now it’s considered unprofitable, and treated as unsalvageable, regardless of the damage that will result to local communities and BC’s tourism industry.

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Ferry cuts: The sweet spot

REVISED: See bold in table in this post and in background link.

5 DECEMBER 2013 – While the Ferry Advisory Committee Chairs have not yet succeeded in figuring out how the provincial government’s ferry cuts will safeguard the coastal ferry system, they do think they’ve found the sweet spot for the least painful possible service cuts.

“If the government’s goal is to find the biggest savings for the smallest traffic loss and least hardship, then we suggest it looks harder at the major routes, and at the big money-losing route hiding behind the profit-makers,” says Brian Hollingshead of the Southern Gulf Islands.

The three major routes (from the Lower Mainland to Vancouver Island) are the giants of the system. Yet they’re facing the slimmest of cuts compared to the 22 smaller routes. Continue reading

Route 30 – Tsawwassen-Duke Point

The Tsawwassen-Duke Point route presents an opportunity for service cuts that would result in the biggest possible savings, with the least likely traffic loss and least social and economic impact.

This conclusion is based on analysis of data from BC Ferries to the BC Ferry Commission, and BC Ferries traffic data.

REVISED first table in the pdf

13Dec-Route 30-revised-Tsawwassen-Duke Point  (32 KB pdf)

Ferry rescue plan shows cracks

22 NOVEMBER 2013 –  The provincial government’s own information shows that the ferry rescue plan unveiled by Transportation Minister Todd Stone this week is based on numbers that don’t add up to a solution.

The Ferry Advisory Committee Chairs (FACC) are being asked to help tweak schedules to make the plan more workable. But no amount of tweaking will change the fact that the cuts to service and to seniors’ discounts are side issues. The root problems remain.

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Service cuts vs traffic losses

This is a study that compares the savings from service cuts to the dollar value of traffic losses. It demonstrates that the savings will not offset the value of lost traffic. The report was developed collaboratively between the FACC and the Powell River Regional District Chair, Colin Palmer.

Service cuts vs traffic loss (21 KB pdf)

FACC submission to BC Budget 2014 Consultation

The Ferry Advisory Committee Chairs have submitted to the provincial budget consultation the following document:

Coastal ferries: An unnecessary crisis  (588 KB pdf).

It is one of several ferry-related submissions to the committee responsible for the consultation, the Select Standing Committee on Finance and Government Services.

The committee will release its report on the consultations on or before November 15, 2013. Updates on the committee’s work will be posted on the committee’s website.

FACC submission to BC government’s 2012 coastal ferries consultation

Ten years ago this month the BC government unveiled a brand new, not-quite-arms-length coastal ferry model. It promised jobs, economic development, modest fare increases and better service – all with no new public debt. The legislation included a move toward greater user pay, in order to reduce the Province’s contribution to coastal ferry service.

The model has failed to achieve its goals. This verdict is based on what we have been hearing for years from an overwhelming number of residents of the communities and users of the ferry routes we represent.

These points are a summary of views, framed by the government’s goals for the current model, followed by our recommendations.

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10th anniversary fix for failing ferry model

12 DECEMBER 2012 – Ten years ago this week, the BC government unveiled a brand new, not-quite-arms-length coastal ferry system. It promised jobs, economic development, modest fare increases and better service – all with no new public debt.

That anniversary coincides with this week’s wrap-up of government’s whirlwind ferry consultation tour. The community tour was meant to talk about ways to save money. But residents and business people ended up delivering a verdict on the ferry experiment: the model has failed to achieve its goals.

“While we’re pleased the government is finally talking to the communities the model is supposed to serve, we’re disturbed by the large gap between government’s view of the system and ferry users’ reality,” says Tony Law, of the Hornby-Denman Ferry Advisory Committee. Continue reading

Service consultations: questioning the point

30 OCTOBER 2012 – The ferry service consultation just launched by the provincial government is confusing, rushed, and missing key parts of the picture, say representatives of coastal ferry users.

In the light of what’s missing, the Ferry Advisory Committee Chairs (FACC) question the consultation goals.

“Yes, it’s worth discussing the Province’s two stated goals – how to save money, and a long-term vision for coastal transportation.” says Harold Swierenga of Salt Spring Island FAC. “But there are many holes and questionable assumptions in the picture of the situation as it’s presented.

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New ferry fare hikes: Beyond the tipping point

02 OCTOBER 2012 – Representatives of coastal ferry users say new ferry fare hikes announced Monday raise questions about the effectiveness of government response to the ferry affordability gap.

The Ferry Advisory Committee Chairs (FACC) are concerned that fare hikes are double the inflation rate. “Fares will continue to grow much faster than people’s incomes unless government faces the causes of the affordability crisis,” says Tony Law of Hornby-Denman FAC.

In January, a BC Ferry Commission study found that ferry fares were then at the tipping point of affordability, and causing hardship in coastal communities. Since then:
• Current fares are at the tipping point + 4.15 percent;
• Next year those fares will have another 4.1 percent increase;
• The following two years will see two more increases, 4.0 and 3.9 percent;
Existing fuel surcharges continue on top of that, and will change with future fuel prices.

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Ferry user reps question traffic recovery

18 JUNE 2012 –  Representatives of coastal ferry users are not surprised by BC Ferries’ fiscal 2012 results, released last week.

They are surprised, however, at the company’s prediction of a return to profitability within two years. The Ferry Advisory Committee Chairs (FACC) believe the basis for this prediction is highly optimistic.

The difference in views centres on traffic and fares.

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Ferry commissioner report: realistic roadmap for all ferry stakeholders

27 JANUARY 2012 – The Ferry Advisory Committee Chairs (FACC) welcome the BC Ferry Commissioner’s report on the review of the Coastal Ferry Act as a realistic though rocky path toward sustainability of essential coastal transportation.

The Commissioner found that fares have reached the “tipping point of affordability” and that “all of the principle stakeholders will need to be part of the solution.”

“The Commissioner has drawn a realistic picture of the problems in the ferry system,” says Tony Law of the Denman-Hornby FAC, “and of the responsibilities all the stakeholders have for fixing those problems.”

The FACC are pleased to see several of their long-standing requests among the Commissioner’s recommendations:
• make the Ferry Commissioner’s main responsibility protecting interests of ferry users and taxpayers;
• remove the requirement that the ferry system move toward user pay;
• remove the ban on cross-subsidization among route groups;
• limit future price cap increases to the rate of inflation.

“These are essential elements for reining in the galloping fare increases, which since 2003 have eroded ridership, hurt coastal economies, and threatened the sustainability of BC Ferries itself,” says Brian  Hollingshead of the Southern Gulf Islands FAC.

But they’re not enough.

“Coastal ferry users have to be realistic and accept some service changes,” says Harold Swierenga of Salt Spring FAC. “But we want to be absolutely clear: service cuts are only acceptable if the provincial government does its part too, and increases its financial contribution to adequately support the coastal ferry system. Anything else just won’t work.”

The FACC considers government contribution to be adequate if it brings fares back from the tipping point. That requires an initial fare roll-back, to create a sustainable baseline for inflation-indexed increases.

“Only this method will restore traffic to levels that will support the system,” says Bill Cripps of Northern Sunshine Coast FAC.

“We realize the provincial treasury has many demands on it,” says Cripps, “but we believe adequate support for ferries is critical for economic investment. Given that economic growth depends on solid transportation infrastructure, adequate ferry support underpins the Premier’s jobs plan.”

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Contacts

BC Ferries: let’s get back to basics

26 OCTOBER 2011 – The Ferry Advisory Committee Chairs (FACC) are telling the BC Ferry Commissioner that it is time for the ferry system to get back to basics. They want to see the Coastal Ferry Act amended to replace the existing six principles with one simple, customer-oriented principle: to provide a safe, reliable, affordable ferry service.

“Affordability means that fares should increase in line with the Consumer Price Index (CPI). Instead, fare increases have been several times higher,” says Bill Cripps who chairs the Northern Sunshine Coast Ferry Advisory Committee. The FACC is recommending that government contributions be sufficiently increased in April 2012, to support a major roll-back in fares on the non-major routes.

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Fixing ferry fares: heavy lifting still ahead

27 MAY 2011 – The Ferry Advisory Committee Chairs (FACC) welcome the partial relief from escalating ferry fares announced this week by Transportation Minister Blair Lekstrom.

But the drop from 8.23 to 4.15 percent in next year’s fare hike doesn’t touch recent increases, nor fix the fare problem in the long term. Neither will the new ferry review, unless it takes on the issue of public policy and government support for ferries.

“We applaud the fact that for the first time a minister has echoed the consistent call to address both affordability and sustainability, and that the commissioner will review this difficult balancing act,” says Tony Law of Hornby-Denman FAC. “But it isn’t enough to stop the damage to communities, ferry users or the ferry service itself.”

The partial rollback won’t feel like relief when people board a ferry this summer. Ferries will cost 17 percent more than they did last summer — what with the end of a fuel rebate, the addition of a fuel surcharge, and the annual fare increase that took effect last month.

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Assessing ferry fare projections

07 February 2011 –  Recently reported coastal ferry fare increases are a realistic assessment of what will happen in the absence of additional government support or of service reductions, say the Ferry Advisory Committee Chairs (FACC), which represent residents of coastal communities.

While projections may change if conditions change, the FACC see these as fixed realities:

  • The major and non-major route groups are different.
  • Only the provincial government can substantially reduce projected fares.
  • Basic provincial support for coastal ferries is $92M a year, unchanged since 2003.
  • Coastal communities are like any rural BC community.
  • Additional ferry funding makes good economic and public policy sense.
  • Imagine BC without affordable public access to the coast.

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Community input into ferry contract review

30 NOVEMBER 2010 – The Ferry Advisory Committee Chairs (FACC) have prepared two reports, which they have asked government to consider in the current review of the coastal ferry contract:

Ominous clouds
Summary of critical issues and data: fares and traffic, cost drivers, potential service reductions, and government funding analysis

Community impacts of escalating ferry fares
Impact of fare escalation on families, workforce, economies, part-time residents and tourists. Includes examples from residents and businesses.

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Decision time for ferry fares and service

02 SEPTEMBER 2010 –  Behind the scenes of this busy ferry travel weekend, work has started on a review of the contract between the provincial government and BC Ferries.

Every four years the Province decides on the level of service it wants to see provided (number of sailings per route), and how much it will pay for it (transportation fee).

The Ferry Advisory Chairs (FACC) are concerned that this current contract review faces a combination of factors that could lead to double-digit fares increases or service cuts, or both.

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Missing piece in new ferry bill

05 MAY 2010 –  A key recommendation by the Comptroller General is missing from the Province’s proposed changes for the ferry system. That recommendation could safeguard the public service role of ferries and reconcile an apparent conflict in government goals for the system, say the Ferry Advisory Committee Chairs (FACC).

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