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.
“Even after the cuts, the system will still be unaffordable, unsustainable, and spiralling into deeper trouble. The government is causing people hardship without much to show for it, says Brian Hollingshead of the Southern Gulf Islands. “Tweaking won’t change that.”
About a million British Columbians live in coastal areas that depend on ferries. “The government is starting to roll up essential transportation in this region without analysing impacts,” says Tony Law of Hornby-Denman. “Cutting service that people have come to rely on to get to work and contribute to the economy requires more than cursory consultation.”
The FACC were briefed on the government plan this week. It appears to be based on several unsupported estimates.
· The plan is based on traffic staying at 2011-2012 levels. This is already inaccurate. Traffic has already fallen below this point, which means there is already a new revenue shortfall, which is likely to grow with each new annual fare increase and related traffic decline.
· There appears to be no business case for the cuts, no analysis of their impact on jobs, and no analysis of the economic and social costs to individuals, communities and the province, including a comparison of those costs to the $14 million in cuts to non-major routes.
· The plan estimates that 75 percent of traffic from the runs that are cut, on average, will be redirected to other runs. There appears to be no data or analysis to support this figure.
· The plan estimates that the change to the senior’s discount will reduce seniors’ traffic by 15 percent. Evidence from the UK on the effects of seniors discounts suggests the loss will be greater. And it is unclear if the plan accounts for lost revenue from vehicle fares that seniors would have paid on the foregone trips.
· Minister Todd Stone says the ferry system will face a revenue gap between $120 million and $200 million in the next contract term, starting in 2016. There is no evidence that the rescue plan will close that gap, while there is some evidence to suggest the gap will grow wider.
· The government chose the dollar amounts in the plan (for service cuts, operational efficiencies, and capital infusion) so that fare increases would be limited to 4 percent a year. But by 2016, the pressure on fares will be even greater than it is now. Something else will have to give to keep fares from growing even faster.
In the business world, cutting costs to stay ahead of falling revenue, without also fixing the cause of the falling revenue, is a path to business failure. The cause of falling revenue for ferries is unaffordable fares and traffic decline, and chronic government underfunding. The rescue plan does not fix this. Nor does it offer the FACC or coastal residents enough data and information to let them offer alternatives to the flawed government plan.
The FACC ask the government to work with community representatives and local governments to find ways to fix the core problem with the system, to build a vision for the BC coast and a more solid plan for its essential transportation.
Service cuts vs traffic loss (21 KB pdf)
A comparison of savings from service cuts with losses from traffic drop
13Oct-FACC Budget 2014 Submission ( 588 KB pdf)
FACC submission to the BC government budget 2014 consultations