Of all the points raised about B.C. Ferries recently — ever-higher fares, the lowest ridership in 22 years, mounting fuel costs, political promises to either help eliminate the ferries’ debt (B.C. Liberals) or to freeze fares and halt planned service cuts (NDP), the unfairness of the 14 free ferry routes in the Interior — one facet of this thorny issue has been overlooked: the impact of declining ferry ridership on provincial tax revenues.
The economies of Vancouver Island and the Gulf Islands have been hammered by the decade-long assault on the ferry service. The experiment in privatization has been a stunning failure. Yet the provincial government, B.C. Ferries, various ferry advisory groups and local governments have been going in circles wondering how to get a handle on the problem.
Every time a Vancouver family decides against a trip to Vancouver Island (partly or wholly because of ferry fares) for, say, a special exhibition at the Royal B.C. Museum, the province loses money.
It loses when a restaurant that is experiencing slumping sales lets a waitress go. Instead of paying income taxes, she’s on employment insurance if she’s lucky, welfare if she’s not. When that family decides against the trip to Victoria, the museum loses the potential ticket sales and gift shop purchases, and the provinces forgoes the taxes on all those lost transactions.
It follows that all the businesses that have suffered because of declining economic activity all over Vancouver Island and the Gulf Islands have been reporting lower profits, which has reduced corporate tax revenues. Mainland business owners should also think about what the ferry debacle has cost them.
Ferries run in both directions, and the ferry-fare wall is obviously discouraging many Islanders from taking in events on the mainland.
A University of Victoria study concluded that in 2006, spending of MV Coho ferry passengers visiting the city “generated $123.7 million in net GDP impact, supported 3,541 full-time equivalent jobs and contributed $12.4 million in local tax impact.”
In that same year, the Black Ball Ferry Line , which runs the Coho service to Port Angeles, spent more than $2 million in Victoria. This spending generated $4.1 million in net GDP impact, supported 11 full time equivalent jobs, and contributed $390,000 in local tax impact.
If the Coho, which carries only 115 vehicles (similar to the 100-car Skeena Queen on the Swartz Bay-Fulford Harbour route) has that large an impact just on Victoria’s economy, imagine the impact of B.C. Ferries, the world’s largest ferry fleet, on the provincial economy and provincial tax revenues.
I’m convinced that once the province realizes how much it collects from various tax sources directly affected by ferry activity, it will begin to look on its support of the ferry system as less than a subsidy and more as an investment, in the same way it has always touted highways into new areas.
And here’s the real “re-vision” of B.C. Ferries, which the government recently called for: Once it has all the facts in hand, the province might consider the radical prospect of making the coastal ferries free, just like the B.C. Interior ferry services. There would be a huge saving right off the bat: all ticket sellers would suddenly become redundant, as would the ferry booths, the ticketing and reservation systems, even much of the security around the terminals.
It seems reasonable that if ferry fares vanished, the ferries would be full again, meaning a greater need for on-board personnel.
That need would be especially great in food services and the gift shops, which, we’ve been told, are a real money-spinner for the ferries. And I’m convinced economic activity on both sides of the Strait of Georgia would soar, right along with provincial tax revenues.
Until the province takes the trouble to study the real relationship between ferry fares, economic activity and its own tax revenues, the coastal ferry problems will never be resolved. The study can’t come soon enough.
Paul Minvielle is a retired journalist who has lived on Saltspring Island since 1976. He commuted by ferry to work in Victoria for 20 years.
