Why BC Ferries ‘system’ is not working

Ferries are like mobile bridges and are part of our transportation system—we need them or else our coastal communities will be cut off and ultimately die.  Almost 1 million people are totally dependent on BC ferries. (This number doesn’t include businesses).

Over the past 10 years the BC ferry system has seen skyrocketing fares, devastating service cuts, decreasing ridership, growing debt at the corporation, and excessive executive compensation packages.

BC Coastal Ferry History

In 1959 the BC Social Credit government under  W.A.C. Bennett took over the Canadian Pacific and Black Ball ferries in order to open up Vancouver Island and the BC coast and grow the economy.

Similarly, in Washington state, a Republican state governor was in office when the government purchased Puget Sound Navigation Company (Black Ball ferries) in 1951.

American Commission Chair Dan O’Neal said: “The reason it’s public in the first place is because private operators couldn’t make any money and a Republican governor had to take it over. The privatization argument comes from people who are not knowledgeable.”

Even back in the 1950s, they realized that a public ferry service allows transport at an economy of scale not available through private ownership.

Privatization arrives at BC Ferries

B.C. Ferry Services Inc. was established in 2003 under the Coastal Ferry Act.  BC Ferries was once part of the Ministry of Transportation and then was made a Crown Corporation and now is a quasi-private company. While it provides a service on behalf of the province, it is also trying to make money.  If this privatization model works then theoretically BC Ferry Services Inc.  should not be receiving any government funding.

Fare increases cause ridership to plummet: In recent years there has been a 47% increase on major routes and a 80% increase on minor routes. Some runs like Gabriola have seen upwards of 90% increases. Steep fare increases have caused ridership to plummet to a 20-year low.

Fares for Seniors don’t add up:  As of April 1, 2014, BC seniors (65 and older) will have to pay 50% of the passenger fare on major and minor routes, regardless of what day they travel. The 100% discount only applied if seniors travelled Monday to Thursday. They forgot to factor in that many seniors still drive and pay for their vehicles.

Last year the provincial government announced an $80 million increase in subsidies (spread over five years) to BC Ferry Services Inc. in addition to the $150 million in public funding it receives annually towards covering its $752.5 million budget (2012 fiscal actual). The forecast for this upcoming fiscal year’s expenditures is anticipated to reach $788.5 million.

Below is a comparison between Washington State Ferries and BC Ferry Services Inc.

 Washington State FerriesBC Ferry Services Inc
Management Salary & Bonus$5.4 million$64.6 million
CEO compensation$152,000$564,000
Number of fleets2235
Routes & Terminals10 and 2025 and 47

Route cuts don’t add up: For example, cutting the Gabriola Island early morning and weekend sailings, and late night sailings on the weekends would amount to a savings of $400,000. At the same time BC Ferry Services Inc. has plans to install a new LED sign at Departure Bay which is estimated to cost approximately $400,000.

Route Fare comparison:
Gabriola to Nanaimo: $34.80  return (car + driver) 13.7 km
Port Townsend to Coupeville: $21.00  return (car + driver) 15.8 km

The Monopolist’s Supply Decision: The BC Ferry Services Inc. management’s solution is to continue to increase fares and shrink services. As a monopoly, BC Ferry Services Inc. should know that the sky is not the limit in pricing. Too high a price for fares will make people stay at home simply for the reason that they can’t afford to use the ferry system.  A low demand and an inefficient and costly management system will mean that BC Ferry Services Inc. won’t ever be able to earn a positive profit.

When will taxpayers go crazy and demand action? Or will we continue to brave ocean swells in our rowboats in the wakes of empty ferries?

Sign a petition started in Powell River ask that the ferries be turned over to the Ministry of Transportation of BC.

Email the BC Transportation Minister Todd Stone and let him know what you think Minister.Transportation@gov.bc.ca. or send him tweet on twitter @toddstonebc.

BC Ferry Service Inc.
BC Ferry Service Inc.