Revelations about sloppy governance and excessive compensation at B.C. Ferries captured public attention when the province's comptroller general reported last week.

The lack of effective oversight on behalf of the owners of the ferry corporation -- that is, the public -- is alarming.

But Cheryl Wenezenki-Yolland found problems that pose greater threats to the economic and social well-being of islanders and ferry dependent communities.

The Liberals overhauled B.C. Ferries in 2003, with the stated aim of ending political interference in ferry operations. The Crown corporation was replaced by the B.C. Ferry Service, a hybrid private-public company. The government created the B.C. Ferry Authority and appointed directors to represent its interests.

The structure is flawed, the comptroller general found. The authority directors appointed themselves to the ferry corporation board and approved compensation far beyond the norm for themselves and senior managers.

The report found even more significant problems.

The ferry system is both an effective monopoly and an essential service. But the legislation setting up the new corporation does not ensure that the interests of ferry customers and local communities get adequate attention, Wenezenki-Yolland found.

"Recognition of ferry users' desire to minimize fare increases was noticeably absent from the intended objectives," her report noted.

And the focus on profitability of the ferry operator "could be at the expense of the public service goals of the ferry system by not considering fully the interests of users of the ferry system, local communities and taxpayers."

That has already happened. Fares have skyrocketed since 2003.

Partly as a result, people have made fewer trips, with vehicle traffic falling by five per cent last year. That means less revenue for the corporation and, as a result, still more fare increases, raising fears of a downward spiral. B.C. Ferries' own analysis suggests an eight-per-cent fare increase -- about last year's jump -- results in a 2.25-per-cent drop in travel on the major routes.

The costs aren't just a burden for travellers. They hurt the region's economy, particularly tourism, and increase prices for almost all goods brought here.

The government created a Ferry Commission to approve rate increases. But the comptroller found its role "is not broad enough to adequately protect the public service mandate of the ferry system."

Protection of ferry customers' interests is not even explicitly required of the commission. There is no independent complaint process, no public review of service levels and no consideration of the long-term impact of service and fares on users and communities.

The important issues raised by the report should be addressed as soon as possible. The comptroller general offered specific recommendations, including the expansion of the commission's responsibilities to include "a seventh guiding principle, protecting the interests of ratepayers and customers." That has not been a government priority. The provincial subsidy to the ferry service, which covered 22 per cent of corporation expenses when it was created, has fallen to 16 per cent, and costs have shifted to customers.

Transportation Minister Shirley Bond has not committed to action on the report. But the capital region has two MLAs in cabinet. They need to convince their colleagues of the economic and social importance of affordable, well-regulated ferry service.