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.
In the long term, coastal residents and visitors will continue to see annual increases on top of the current untenable fares. Not only are the high fares painful on their own, they add to the costs of goods and services, over and above the increases experienced by all British Columbians.
“We’re near, maybe beyond, crisis level in some parts of our communities and it’s going to get much worse if we don’t reverse what’s been happening,” says Brian Hollingshead of the Southern Gulf Islands FAC.
Why are fares so high?
Financial statements show that fares have soared because non-discretionary operating costs have soared, in a way not foreseen when the new structure was created in 2003. The burden of those cost increases has fallen on the ferry users. (see graphics below.)
“We seem to have forgotten that ferries have long been recognized as an economic engine; their boost to the economy is no longer factored into the financial equation of costs and benefits, as it is in other jurisdictions,” says Harold Swierenga of Salt Spring Island FAC.
Swierenga adds, “we may now be at the point that savings in public ferry funding are offset by lost tax revenue, a false economy. And this raises a question, why is coastal ferry service different from other forms of essential transportation in BC, in which government invests more readily?”
The FACC recommend to government that it consider freezing fares for the final three years of the next contract term, for these reasons:
• Damage to families, communities and the ferry service would result from continuing fare increases, given that fares climbed by multiples of the CPI in the past eight years;
• Economic benefits would be generated by investing in coastal transportation infrastructure;
• Stronger government support of coastal transportation would be consistent with its support for other essential transportation infrastructure in British Columbia.
Additionally, the FACC ask the ferry commission to consider the role of government as part of its review of the affordability and sustainability of ferry service.
And while ferry users and ferry-dependent communities await the outcome of the review, the FACC ask them to let the government and commission know how current ferry fares affect them.
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The graph of cost drivers shows BC Ferries’ major expenses, and their change from 2004 to 2012
The graph of revenue sources shows BC Ferries’ funding sources, and their change from 2004 to 2012.
Click on the image for a larger view.