September 2018 Ferry Traffic

Hi all,

A traffic-sucking, slurpy September.  That record rainfall, hard to forget. September_2018_Traffic_Stats

A reminder that weather can upset the trend in any given month.   Summer smoke – we can call that weather – and September rains derailed the hitherto upward traffic trend.  Check out graph 1.  System vehicle traffic down 0.05% (effectively flat) and passenger traffic down 1.39%.  The Majors lost both passenger and vehicle traffic.  The Minors, a little better, but not much, with vehicle traffic up half a percent.  Rte 3, an almost carbon copy of the Minors.  While the North appeared to be bucking the trend, the increase there was almost totally the result of the new traffic on Rte 28.

Capture 1

The year-to-date picture, graph 2, is some healthier, based on the April to June increases.  The Minors were the beacon of hope, while the Majors struggled.  The assumption here is that the 15% fare cuts on the Minors provided a boost, one that was missing on the Majors with no fare cuts.  Not surprising.

Capture 2

Peeling the weather onion, the Big 3 Majors all lost both vehicle and passenger traffic.  They also carry a heavier percentage of discretionary traffic than the Minors.  Discretion may be the better part of valour.  It also seems to be the better part of taking a fun ride on a ferry in the rain.

The Minors’ anaemic performance on the other hand does not reflect individual route results.  Those were all over the map, from up 5% on some routes to down 5% on others.  It just happened the ups and the downs balanced each other.  Explanation for these results can only lie with the individual routes.  There’s not a common explanation that fits them all.

Graphs 3 and 4 illustrate how this September fits with previous Septembers back to 2009, for both the System and the Minors.  Four years of steady growth, and then ‘blah’ for this September.  While disappointing to see that growth pause, we need to keep in mind that the increased traffic level attained over those past four years as been sustained, more or less, this past month,  Still a lot more wheels on the deck and bums on the seats than four years ago.  And overloads.

Capture 3

Capture 4

The 13 month look (graph 5) is interesting, in that the heady gains of a year ago started cratering in June and have effectively ceased to exist since then.  The drop in April was due mostly to the loss of the front end of the Easter weekend this year (vs the full Easter weekend last year).  As noted earlier, this summer (June through September) has been one of ferry-unfriendly weather.  The October results should be better, with the caveat that traffic last October was exceptional (8% above that of the previous year).  It will be a challenge to improve upon that.

Capture 5

Graph 6, the daily traffic tracker presents the first bleep in our text book picture of steadily growing Minor route traffic.  The bleep notwithstanding, the picture has been and remains one of consistently increasing traffic volume on our routes.  One sucky month doesn’t alter that.

Capture 6

The Big Picture, illustrated in graphs 7 and 8, will continue to reflect traffic growth, just not as dramatically as for the past three years.  That said, BC’s coastal population is still climbing every day and the healthy economic climate suggests continuing GDP growth.  Both are primary determinants of ferry service demand.  Barring any unforeseen cataclysmic events, it seems reasonable to expect continued ferry traffic growth.  Fleet capacity increases with the new boars will help.

Capture 7

Capture 8

So, what to expect . . .

Last month, we forecast year end system traffic growth of 2% for vehicles and 1.5% for passengers.  BCF, in their PT5 submission, went out on the limb above us, contemplating 2.6% vehicle growth and 1.6% passenger growth.  At this time, I suggest both are optimistic, though ours less so.  Interesting that the submission anticipates no growth or decline through PT5.

Overall, coastal ferry traffic has come a long way in the past four years, though hitting a bit of a rocky patch this past four months.  That said, the fundamentals remain in place, and there’s no indication of resumption of punishing fare hikes.  Once capacity more or less catches up with demand, the future looks promising, both for traffic levels and for the economic and social well-being of our communities, so dependent on this life-sustaining service.  There seems to be a harmony of vision shared by BCF, the Province and the coastal communities, one that’s most welcome.

Enough!

Feedback always welcome.

Brian

Advertisements

FACC Meetings with Government, the Commissioner and BC Ferries Executives

Each year the Ferry Advisory Committee Chairs are brought to Vancouver courtesy of BC Ferries to attend their Annual General Meeting. We take this opportunity to meet with their executive team, the BC Ferry Commissioner and with the Minister of Transportation and Infrastructure who is responsible for BC Ferries. Attached are the notes from these meetings, all of which have been approved for distribution by the various parties: BC FAC Chairs Meeting August 2018

August 2018 Ferry Traffic

Hi All,

Call it Smokie II, a just slightly healthier version of July traffic. August_2018_Traffic_Stats

Overall traffic up about 2%, (graph 1)  Majors, slightly less anaemic than last month, up 1%.  The Minors up 3.8% for vehicles and 3.5% for passengers.  Once again, the smoke dampened people’s interest in scenic travel, as well as tourism generally, resulting in August’s less than expected results.

Capture 1

While the smoke affected the summer traffic, it needs to be borne in mind that Major route travel has been flat all year, as suggested by the YTD graph 2.  It does seem that the 15% fare cut on the Minors has fuelled their year-long traffic increase, while the lack of same on the Majors probably explains their doldrums.  Not surprising.  Rte 3 is the anomaly, having enjoyed the fare cuts, but not seeing any material traffic increase.  Perhaps the lack of capacity (sailing waits) and lack of on time performance on the route contributed to the dampening effect.

Capture 2

Graph 3 reminds us that while System traffic was just modestly up over last August, it’s still higher than it’s been since 2009, and above a bonanza year last year, smoke and all.  So, no tears, please.

Capture 3

Graph 4, shows August Minor route traffic on steroids, compared to previous Augusts.  The fare cut has been a remarkable shot in the arm for traffic, and traffic is a surrogate for the economic and social well-being of our communities.  The side effects of record traffic – overloads and sailing waits -are frustrating.  That said, there is much-needed relief in sight for the hardest hit routes with the anticipated arrival of the first replacement ferries, followed by the five additional boats presently in the approval process.  Anticipated delivery of the latter group is in the 2020/2021 time frame.

Capture 4

The 13-month track, graph 5, suggests this fiscal year’s performance since June as been positive but definitely less starry than that of last year.  This is consistent with the YTD graph 2, but on a month to month basis.

Capture 5

Vehicle traffic per day on any route or group of routes illustrates whether there are erratic results, or if there is a constancy.  Graph 6 showcases the strong performance of the Minor route group, pretty much every month, every year since 2014.  A comparable graph for the majors would show similar, though less robust, growth up to this year, and then the black line intertwined with the blue.

Capture 6

Let us not forget.  We’ve said enough about graphs 7 and 8 in previous episodes.  Suffice to say, traffic is hot, recovering from a too long spell in the wilderness.  If and as capacity catches up to demand, we should be able to see the current trend continue, though perhaps at a less robust rate.

Capture 7

Capture 8

The future?  In the absence of any catastrophic events between now and April, look for a vehicle traffic increase of 2%, year end, and 1.5% for passengers.  March should be down from 2018, as it will lack the freebie half Easter weekend it enjoyed this past year.  With August now in the bag, the remaining seven months aren’t likely to move the needle very much.  Unless we get a zombie winter, and then all bets are off.

Last month we wondered about the relative percentages of reserved space vs deck room left for ‘standby’ customers.  For the Labour day weekend, it boiled down to reserving between 80% and 90% of the passenger deck space on routes 1 and 30.  However, given commercial traffic was down for the weekend, overall pre-committed space was generally under 70%.  It meant giving the maximum number of people assurance they’d get where they wanted to go, when they wanted to get there.  The result was a less rosy picture for the standby guys.  Worked pretty well except when the Spirit of BC lost two round trips early Friday, and the day collapsed into chaos on the route, with a lot of disappointed folk who saw their reservation certainty evaporate.

As always, any questions, protests, denunciations or other rude comments, feel free.

Brian

July 2018 Ferry Traffic

FACChairs,

BC Ferries Traffic Stats Download: July_2018_Traffic_Stats

A smoky month with surprising, and not so surprising, traffic results.  System vehicle traffic was up 0.9% while passenger traffic was down 0.06%.  Graph 1.

Capture1

The Majors were down from last July on all but Rte 3, which is essentially flat.  As per Graph 1, vehicles down 1.2%; passengers, 1.8%.  Disappointing, but not the end of the world.

Meanwhile, the Minors were up significantly on almost every route, vehicles 4.5%; passengers, 3.7%.

How could this be?

The  Majors’ drop is likely due to two things, the first being the pervasive pall of smoke.  It’s keeping out-of-province visitors away, and keeping British Columbians home.  That and last year was a bonus traffic summer for ferries as many vacation travel plans were redirected to the coast due to the devastating wildfires in the interior.  That bonus factor was gone this year as coastal destinations were equally blanketed with the Grey Misery.  So, the smoke dampened travel and the traffic comparison was to an inflated high volume last year.  Traffic off, no surprise.

But the Minors had the same smoke and the bonus traffic last year.

Indeed.  But the Minors also had a 15% fare reduction, not enjoyed by the Big Three Majors.  Price elasticity still seems to work.

From Graph 2, it’s evident the Majors’ traffic has substantially lagged that of the Minors since April.  The modest System traffic growth is almost entirely due to the Minors’ contribution.

Capture2

System traffic this July essentially stalled at last year’s level, after three years of steady growth (Graph 3).  Traffic was dampened on one hand by the smoke and buoyed on the other by the 15% fare cut (Minors, Rte 3 and the North) and return of the seniors’ freebies.

Capture3

Meanwhile, Minor route traffic this July notched a fourth straight year of substantial growth (Graph 4), thanks in large part to the 15% fare cut.  As discussed previously, the traffic boost is good for local businesses and the general well-being of the communities.  But the inability of BCF, with its limited capacity to accommodate the increased demand, is leading to unprecedented sailing waits on more routes, and more sailings on those routes.  While nobody would suggest raising fares to constrain traffic, the longer and more frequent waits are becoming increasingly painful.  The new, greater capacity ferries are eagerly awaited.

Capture4

The 13-month System traffic look (Graph 5) pictures some excellent months, compared to previous year results, and some OK ones.  This July was an OK one, but one has to bear in mind that last July, to which it’s compared, checked in with 5% traffic increases.  Matching that traffic level, not too shabby.

Capture5

Graph 6, the Gabriola John Daily Traffic map shows the steady Minor route traffic growth for the past four years.  Interesting that it’s consistent, year over year, and virtually every month.  Not all routes present such a tidy picture, but in aggregate, it’s text book.  Even now, this trend is being constrained by capacity shortfalls.  As the newer, bigger ferries come into service, look for the growth rate to increase.

Capture6

The Let Us Not Forget picture, Graph 7, illustrates the three year-traffic rebound after seven years in the ditch, and compares it to where it might reasonably have been in an earlier environment of modest fare increases.  Increased tourism, population and provincial GDP, together with recent minimal to no fare increases have essentially made current fare levels more acceptable.

Capture7

Graph 8, the Long Look, reminds us that indeed, BCF is now carrying more vehicles than ever.  This appears to be more a recovery effort than a normal growth situation, traffic catching up to where it might have been in the absence of the ‘situation’ that collapsed traffic earlier.

Capture8

So, what might we expect?

1. August results likely to be similar to those of July.  Smoke, extreme fire hazard, drought. Not exactly inviting.
2. Year end results, positive due to 15% fare cut on all but the non-Big Three Majors and the seniors’ freebies, but dampened due to summer getting smoked out, and coming off bonus year last year.
3. Year to year expectations are based on no major changes.  Possible major changes could include Climate Change (wildfires are real, not hoaxes) or substantial economic malaise arising from trade practices of our southern neighbour.  As we’ve learned, there’s a lengthy dark menu of never-before-seen events that can dramatically alter our ferry world.
4. But for now, we have a magnificent coast, safe communities and a sound economy.  Bodes well for the positive ferry service trends.

A new wrinkle . . . have a look at the CHEK attachment. CHEK 180827 long waits It appears BCF has dramatically increased the percentage of deck space they’re committing to reservations on rte 1, and possibly on rtes 2 and 30.  That translates into more multi-sailing waits for the standby customers, competing for much less space on each sailing. Note Deborah Marshall’s reference to 45% to 75% of capacity being committed to reservations, if required.  That’s the whole upper deck of a Spirit.  And that, I believe, is new.  At one time, getting to the terminal half an hour early for a mid-day sailing would get you on.  People need to know that may well not work anymore.  More likely to need a reservation.  Noteworthy, that rte 1 traffic is down from July last year and August traffic likely will be down from last August.  And yet, the multi-sailing waits.   If nothing else, it will be good for revenue.  I’ve asked what’s happening, and am awaiting a response.

Questions, comments, don’t be shy.

Brian Hollingshead Co-Chair FACC

 

 

June 2018 Ferry Traffic

FACChairs,

BC Ferries Traffic Stats Download June_2018_Traffic_Stats

A bit of a departure from our dead boring, everything’s lovely comments of the past months.  Traffic is still up, 2.7%, passengers and 1.9%, vehicles (graph 1).  Dampened somewhat by a few head-scratchers this month.

Capture1

For instance . . .

– traffic, particularly vehicle traffic, substantially off on Routes 2 and 3, dragging down the Majors.  This is consistent through the four months of this fiscal year (graph 2).  Horseshoe Bay congestion a factor?  That can and will discourage discretionary traffic.  Coastal Inspiration being out of service?  Probably another factor.   Rte 30 is likely picking up some of lost Rte 2 traffic, but certainly not all of it.

Capture2

– passenger traffic stronger than vehicles on each of the Majors this month.  A summer trend?  Stay tuned.

– vehicle traffic up on both northern routes, while passenger traffic down on both routes.  Increases perhaps related to LNG activity in Kitimat?  If not this month, expect it to be a Rte 10 factor in coming months.

– Rte 9 up over 20%, but related to struggles keeping the Q/Nanaimo alive a year ago.  Was not a fun month for BCF or customers

Graphs 3 and 4 show June traffic in sustained growth country for both the System and for the Minors.  While the System and Minor route graphs look about the same, consider the actual numbers (why graphs alone aren’t always to be blindly trusted).

Capture3

Capture4

The System had lost 6.2% of its 2009 June passenger traffic and 9.1% of its June 2009 vehicle traffic by 2014, the darkest year. June passenger traffic is now restored to 9.3% over Jun 2009 levels, while vehicle traffic is up 8.5%.

June 2014 Minor route traffic had dropped by over 12%, compared to June 2009.  A deeper ditch than the System.  Yet June vehicle traffic is now up 8.6% over Jun 2009, while passenger traffic is up 5.9%.

Point being, the Minors took a much bigger hit than the System (read, the Majors), but have recovered, and are recovering at a faster rate than the big fellas.  As to why, that’s another story, as yet unwrit.  It’s likely the answers lie in a million details, specific to each of our routes.

The thirteen month graph (graph 5), reminds us that the system traffic is up, but not at the level we’ve come to expect over the past four years.  The Majors are the drag this year, doing ok but not at the stellar level of past years.  This is borne out by Graph 2, suggesting the Majors have been sluggish all this fiscal year.  The April bottom bounce, of course, was the result of the loss of half the Easter weekend to the previous month.

Capture5

Graph 6, the daily traffic picture, shows clearly that the Minors have experienced increasing traffic, essentially every month of the same month in the previous year.  While there are some ups and downs on specific routes, the overall  message is crystal clear.  The Minor routes are on a roll, and have been for the past four years.  A roll which shows no signs of abating.  The need for more capacity is emerging on more sailings, on more routes, every month.  This summer is going to be more than painful on an increasing number of routes/sailings.  As we’ve learned from experience, one and two sailing waits lead to visitors not coming back.  Daily traffic graphs for Rte 3, the North and the Majors are not as clear as this one.  Generally similar but mushier.

Capture6

Graph 7, traffic has come a long way in four years.  With the growth apparently softening with the Majors, the rate of increase could ease off a bit.  Will depend to a large degree on what happens this summer.

Capture7

Graph 8 has always seemed a bit weird, the split in direction in 1996 and 1997, passenger traffic increasing while vehicle traffic fell.  Double checked, and that’s the way it happened.  It was a time of rapidly (for then) rising fares, with locals storming the barricades, or at least the terminals.  The gov’t of the day brought in a wise person who recommended the discounted ‘ticket’ fares be rolled back, while the cash fares remain at their higher levels.  The move satisfied local residents, while it’s not so clear how visitors reacted to the fares of the day.  It was evidently a time of ‘let’s do it and see what happens’.

Capture8

So, what to expect . . .

While too early to see clearly what’s going on, it appears traffic growth on the Majors is settling down to a more modest pace.

Growth on the Minors remains strong and very likely will continue to do so through the summer.

Traffic on the Northern routes remains a crap shoot, dependent on weather, forest fires, as well as the usual, the Canadian buck, US politics, the price of gas.  Sadly, it will not receive the hoped for boost from Rte 28, the new route (reincarnation of Rte 40, cut in 2014) to serve Bella Coola to Port Hardy.  The service will not make it into operation this summer.

The 15% fare cut was expected to generate a traffic boost.  It could partly explain the Minors traffic energy while the lack of a fare cut on the Majors could account for their relatively lack lustre performance.

It’s all a big wonderful world with enough moving parts to keep us all engaged for a lifetime.

With that ominous note, I leave it to you for questions, comments, inspirational and inspired contributions.

Brian

March 2018 Traffic

FAC Chairs

You shall be comforted, knowing the world is unfolding as it ought to.  At least for ferry traffic.
Vehicle traffic is up over last March by 4.71%, passenger traffic, 5.20%.  Simply rounded, traffic for March is up 5%.  While boosted by half an Easter weekend that wasn’t enjoyed in March 2017, still a darn solid increase.

March_2018_Traffic_Stats download
Given this is the end of the fiscal year, the Year to Date numbers become more significant. Vehicle traffic has increased over FY2017 by 5.03%, with passenger traffic up 4.73%.  Again, 5%.  To the even bigger, more significant, picture this is the third year in a row with these striking traffic increases.  Good for BCF bottom line.  Good for local businesses. Getting crunchy for overloads on some routes.
Into the murky details . . .
The overall March traffic increase was supported by good news from all route groups (graph 1) and from almost every route.  The March results were consistent with those for the Year to Date data (graph 2), an accountant’s dream.

Capture

Capture2

Graphs 3 and 4 indicate March traffic, like that of most months this past year, has lurched along to the highest levels we’ve seen for both the system and for the Minor routes since 2010, the year these detailed stats first became available to us.

Capture3

Capture4

Graph 5 gives us the past year, month by month.  Generally strong, particularly in the big money months, June to September.  It seems there will always be a few unhappy surprises (May, Nov).  Sometimes it’s weather.  And sometimes it’s just those capricious stars aligning to thwart the best efforts (and wishes) of BCF.

Capture5
While traffic has enjoyed three feastish years, we need to remember it’s digging itself out of the ditch created by seven faminish years (graph 6).  Still well below what it might have been, had the drama been avoided.  Editor’s note . . .the broken line for vehicle traffic is because these are AEQ numbers, projected from the actual numbers provided by the monthly updates.  Passengers show as a solid line as there is only just the actual count.  No such thing as ‘equivalent’ passengers.  Mercifully.

Capture6
Graphs 7 and 8 illustrate the strong growth of the past three years, as well as the ditch time, for each our three coastal community route groups.  Rte 3, nominally a Major route, is included as they shared the hard times (fare increases, service cuts) endured by the Minor and Northern routes.  The Northern traffic collapse in 2007 was, of course, the result of the tragic loss of the Queen of the North (our ultimate reminder to never take safety for granted).

Capture8

Capture8a
The final message from GraphLand, number 9, the rock and roll history of ferry traffic since 1990.  More a picture of political ideology than customer demand.  Has always been the case and probably always will be.

Capture9

So here we are on the doorstep of a brand new year.   What’s coming  . . .
If you can believe the trend lines – some risk but better than throwing darts at a spreadsheet – experience would make the case for the current trend to continue. This, in the absence of any cataclysmic change in the fundamentals (Canadian dollar collapse, massive fare increase, economic meltdown, etc.).  Throw in the 15% fare cuts, the return of free seniors’ travel and traffic is certain to see even more dramatic increases.  It’s noteworthy that Minor Route traffic increased significantly more than on the Majors.   Ding!   Increased capacity needed in the hot spots, and the coming hot spots, sooner than the normal course of events would entail.  Possible responses schedule tuning, vessel redeployment, larger replacement vessels and hopefully tightening up the current four year cycle to put new boats into service,  BCF and the Province seem to be aware of the present and coming problems.  Now for the response . . . .It’s become urgent.
Anyway, an interesting year to come.  Comments always welcome!

Brian

January 2018 Ferry Traffic Stats

FACChairs,

It seems we’re witnessing a new normal with the 4.5% vehicle traffic increase over Jan 2017, and 3.3% passenger step-up.  These jumps are noteworthy in and of themselves, but are particularly so, given the  weather we endured this past Jan.  That sort of weather typically discourages anything but the most necessary ferry travel.
As we found with most months this past year, traffic is  generally up, in the 4% to 6% range.  Always, the occasional contrarian route. But not many.  Graph 1.  The year-to-date stats, (graph 2) are solid and will remain so for the rest of the fiscal year (to Mar 31).
Graph 1
Untitled2
Graphs 3 and 4, show the longer look at Jan traffic for the system and for the Minors is consistent with what we’ve been watching all year, continuation of a three year strong upward trend.  This Jan, passenger traffic growth didn’t keep up with vehicle increases.  Maybe a concession to our rain-soaked weather?
Untitled3
Untitled4
Graph 5 is a picture of the past year’s traffic.  May and Jun bucked the trend, but overall, a solid year.
Untitled5
Graph 6 presents three messages and a warning . . .
Untitled6
1. We went through seven challenging years when steep fare increases and fuel surcharges were the order of the day. Traffic (and our communities) paid the price.  While there were other factors, it’s our belief that fares were the principal traffic-depressing factor.
2. Traffic has been on a roll for the past three years and it looks like the it’s going to keep rolling that way, barring any dramatic changes in the economy, the value of the dollar or cataclysmic world events.  The 15% fare cuts and the return of the free seniors’ fares will stimulate a traffic boost, while the fare freeze on the majors will support continued growth.
3  As strong as the traffic growth is, it’s still a long way below where we believe it would have been with even gradual growth resulting from modest fare increases (rate of inflation) since 2003.
4. Ferry traffic is approaching uncharted waters, in terms of BCF’s capacity to accommodate the emerging demand on our routes.  In the short term, we are going to see more routes, with more sailings, experiencing overloads where they never used to exist.  BCF will have some limited means of increasing capacity through schedule tweaking.  In other cases, that option is tapped out, and vessel capacity will need to be rethought, meaning larger than like-for-like replacements, two-for-one replacements, redeploying ferries to less demanding routes and accelerating some vessel retirements where the existing ones are no longer up to the job.  These are longer term strategies – maybe three to four years – and will be dependent on available funding.  The alternative is watching the service of which we’re so proud gradually come undone.  This is not a new discussion.  Nor is it going away any time soon.
Graphs 7 and 8 are reminders that all three of our route groups are seeing the same growth projections.  Rte 3 is one of ‘our’ route groups, as it experienced the same fare increases and service debilitating decisions that the rest of us did.
Untitled7
Untitled8
Graph 9?  Back to the uncharted waters comment.
Untitled9
Brian

Performance Term 4: An Opportunity to Reset Ferry Fares

Background:

The British Columbia Ferry Corporation was established in 1958 through the Toll Highways and Bridges Authority. It was a government Crown Corporation to provide public ownership of transportation routes previously serviced by the Canadian Pacific Railway and the private carrier Blackball Ferries.

The government of Premier WAC Bennett established the service in part as a response to labour unrest that led to job action. He declared that a reliable and affordable connection between Vancouver and Victoria constituted an essential service because British Columbians have a right to uninterrupted and affordable transportation services to their communities. Premier WAC Bennett knew that if the provincial economy was to grow that the communities of British Columbia needed to be connected by road, and in the case of coastal communities by ferries, which like bridges and tunnels extended the highway by overcoming natural barriers to the movement of goods, services and people.

In 1961, the Toll Highways and Bridges Authority made the decision to expand the ferry service and purchased the Blackball Ferry Company for $6.6 million dollars integrating it as a part of the BC Ferry Service. This was done to expand government-funded marine transportation service from the original Tsawwassen to Swartz Bay route to include service from Horseshoe Bay to Gibsons (Langdale) and to Nanaimo.

On January 1st, 1977 BC Ferries was formed as a government-sanctioned monopoly Crown Corporation to operate the coastal ferry service that was initiated by the Province in 1960. The mandate of the original contract with BC Ferries reads:

The coastal ferry system is integral to economic growth and development in British Columbia, and getting people and goods to their destinations safely, efficiently and on time is essential if British Columbia is to be competitive in the world economy in which it operates.
And
BC Ferries is an integral part of British Columbia’s coastal ferry system, linking Vancouver Island to the mainland of British Columbia and linking many other coastal communities.

In the mid-1980s BC Ferries took over the saltwater branch of the Ministry of Transportation and Highways which ran K-class ferries to service small coastal island communities like Thetis and Penelakut. These privately contracted services administered by the Marine Branch of the Ministry of Highways and Infrastructure provided additional services across the Fraser River, and in the interior of the province.

 

Route 20 History:

BC Ferries Route 20 services Thetis and Penelakut Islands. Thetis Island has a permanent population of 350 folks that swells to close to 1000 in the summer months with vacationers and the summer camps for children and teens. Penelakut Island is a First Nation’s community that has a permanent population of approximately 450 members.

Ferry service to Thetis Island and later to Penelakut Island (called Kuper at the time) was the result of an agreement in 1958 by then Transportation Minister Phil Gaglardi and Adam Hunter, a third generation Thetis Island resident. Adam would build a road to Pilkey Point from Clam Bay, a distance of 4 km, and develop 60 building lots in exchange for the ferry. The construction of the road and side roads, which included significant drilling and blasting to get over Moore Hill, was done solely at Adam’s expense. This agreement was further evidence of the commitment of the BC Government to grow the provincial economy through remote community development. In other words the agreement was Thetis Islanders, you build the road and we, the government will provide ferry service at a reasonable cost.

The inaugural ferry run was on March 17, 1959, when the 6 car ferry, the MV Ethel Hunter started service to Thetis Island (see photo below). Service to Penelakut Island began for passengers in 1963, and included vehicles in 1975.

Untitled1

The cost of the sailing was set by calculating the gas tax that was lost to the province on that 6 km crossing had it been a highway. This was 50 cents one way per vehicle and 12

cents one way per passenger. The setting of the fare structure was part of the governments’ commitment to provide safe, efficient and timely service to the residents of Thetis and Penelakut Islands. Fares stayed at this level for many years. However by 1987 cash fares had risen to $7.80 for car and driver return.

Recent History:

In December of 2002 the then Minister of Transportation (MoT), Judith Reid introduced a new ferries model. According to the MoT news release the revitalized ferry system would result in; improved service and customer choice, guaranteed service levels and fair rates, and economic development and job creation.

Residents and business owners of Thetis and Penelakut Islands were encouraged with the Minister’s 2002 announcement for a ‘new’ ferries model. The promise of economic development and fair rates offered hope for a healthy future for our two ferry dependent communities.

However, the structure that was set up by the government created extreme financial and operational difficulties for BC Ferries and resulting undue hardship for residents and businesses of coastal communities. Basically the government who used to own controlling interest in BC Ferries, which had a book value of $503 million, divested itself of this interest. On April 2nd, 2003, the government issued BC Ferries a debenture for $427.7 million, which BC Ferries promised to pay in cash. The government was issued 75,477 non-voting preferred shares in BC Ferries valued at $1000 per share. On May 27th, 2004, BC Ferries paid the debenture of $427.7 million plus $25 million in interest to the government. This left the BC government with a minor $76 million stake in one of the largest ferry companies in the world. The resulting stagnant funding ($144 million per year in contract service fees) from government and the need to build and replace ships and upgrade terminals, left BC Ferries no choice but to put this burden on ferry users by continually raising fares (the beginning of the governments user pay policy). Within a year of the ‘new’ ferries model announcement, fares began to outstrip CPI growth by more than double on Route 20 (see graph 1). Additionally, overheated fuel costs along with the other operating, capital and overhead expenses drove Route 20 fares up 144%, from 2003 to 2015. This was in contrast to a BC CPI increase of 16% up to the end of 2014.

As fares rose on Route 20 inevitably traffic began to decline. Reduced tourist traffic, less commercial traffic and residential traffic had real estate sales dry up and caused businesses, summer camps and B&B’s to close their doors.

Untitled2

Current Situation:

As has been stated over and over again – in the Commission report and through the governments ‘engagement’ processes of 2012 and 2013 – the ever-increasing fare level is the primary cause of declining traffic, and related shrinking of our island economies. There can be no question the two are directly related. Moreover, residents of Penelakut Island suffer an additional burden. With high unemployment and reliance on social assistance many band members can not afford to load up an Experience card (minimum buy in is $115), so they pay primarily cash fares which are 30% higher. The Experience card system disproportionately disadvantages low income individuals and families, many of whom do not have a credit card or the cash to load the card. This is a real and daily hardship for these customers that are least able to cope with fares that have long since passed the tipping point of affordability.

The 1.9% preliminary fare cap, while barely approaching the inflation rate, was a welcome departure from earlier fare caps. But like a river overflowing its banks, the rate of increase becomes secondary to the absolute level. The economy of the gulf islands has contracted substantially as a result of ferry fare levels, particularly in the last six or so years. There is no shortage of evidence. We know from the substantial, sustained traffic increases that resulted from removal of the over-height premiums that traffic will respond to significant fare reductions.

Recommendation:

Route 20 Ferry Advisory Committee, on behalf of the residents and businesses of our two communities recommend that in the interests of beginning to restore economic stability and reduce the very real financial hardship to the ferry-dependent coastal communities, that fares on the Minor Routes be reset with a 25% rollback effective April 1st, 2016. This could be achieved through some combination of additional government funding, further BCF efficiencies and service reductions on the 3 Major Routes. We would then expect to see subsequent fare increases in the order of CPI increases in the following years. Such an adjustment would fall, we believe, within the context of balancing the interests of the users and the ferry dependent communities with those of BC Ferries and the Province.

The Province has long since broken its commitment to residents of Route 20 for affordable ferry service. The province alone can reverse the economic decline of all coastal communities. Please, let’s not lose this once-every-four-years opportunity.

Sources:

British Columbia Ferry Corporation and Fiscal Fairness for Ferry-Dependent Communities January 2013. Report prepared by Maradadi Pacific Holdings Ltd.
PT4 Fares, Economies and Sustainability, submitted by the Ferry Advisory Committee Chairs, May, 2015
PT4, Time to Reset Ferry Fares?, submitted by the Southern Gulf Islands Ferry Advisory Committee, April, 2015