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.

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