The B.C. Ferry Corporation is a well-run outfit with a moderate payroll that meets all the world standards for on-time performance and safety. The fleet serves a beautiful part of the world and offers the vast majority of its passengers a positive experience.
It should have a balance sheet glowing with good health, but it doesn’t.
It is facing a difficult financial crisis. That’s having a chronic negative effect on coastal communities that’s only going to get worse if the government continues its current approach.
Those are some observations based on the detailed socio-economic impact study the Union of B.C. Municipalities released this week as part of a campaign that is shaping up to force a rethink the response to the dilemma.
The problem is that fares are too high. They used to be grudgingly accepted by the travelling public. But somewhere along the way, they hit the point where people started balking.
(The price “tipping point” was reached in bipartisan fashion, as both NDP and B.C. Liberal governments in the past 24 years jacked them up continually during their terms in office.)
The study’s detailed analysis concludes that the cost has prompted millions of people to forgo trips. And the declining ridership has contributed to more fare increases. The classic vicious circle prompted the most recent attempt to tackle the problem — cutting service levels across the board.
That move will save costs, but could suppress ridership more. Plus, there will be a couple more years of fare hikes above the inflation rate.
What’s needed is an influx of year-in, year-out revenue to take the pressure off fares.
The suggestion is to get more money from the province and the federal government. But that looks like a faint hope. It makes the obvious case that the ferries are an “enormous” part of the provincial economy and generate big tax dollars. The overall provincial take equals about what the government contributes to the system.
But the federal take is far more than the $27-million subsidy it currently pays. So the premise is that there is an economic case to ask for a huge increase in the federal subsidy.
Anyone familiar with federal-provincial relations recognizes that pursuing that dream would take years of campaigning with a relatively low chance at success. But the premise rekindles a concept that ferry commissioner Gord Macatee floated in his 2012 report on the problem.
If governments that benefit from the tax revenue generated by ferry-related economic activity should be expected to contribute to running the ships, where does that leave the coastal municipalities?
Macatee worked from the same argument that coastal communities might soon be aiming at Ottawa. But he turned it back on the communities.
“It could well be in the interests of a local government to invest in reducing ferry fares for their community,” he suggested. “It may also be possible that local residents would be willing to shift some of the cost of ferry travel from fares to municipal taxes, if doing so would produce a net benefit from increased tourism.”
He suggested changes that would allow local governments to pay to reduce fares on routes serving their communities.
The commission would have the authority to oversee such an arrangement. The advantage would be that dedicated local funding would produce a high-visibility, local result — a specific lower fare.
He also suggested surcharges on specific routes to raise money for tourism promotion to the benefit of the communities on the route, as a means of increasing ridership.
The ideas got a frosty reception from municipal leaders and went nowhere. Two years on, a fare buy-down is likely the last thing UBCM members would want to discuss. But if the theory is going to be applied to one government, it could be applied to them all.
New money is needed from somewhere. Continually sticking it to passengers amounts to throwing them overboard, one by one.
