B.C. Ferries to chart more sustainable course

NANAIMO – $79.5-million cash infusion, $45 million in efficiencies to help keep fare rate increases down.

B.C Ferries, the provincial government and coastal communities will have to work together if the ferry service is to stay afloat and meet the needs of users.

Blair Lekstrom, transportation and infrastructure minister, introduced key amendments to the Coastal Ferry Act Wednesday.

The changes are in response to a report filed in January by B.C. Ferries Commissioner Gord Macatee, who made 24 recommendations to improve the vision and financial viability of the struggling service, which has seen fares rise dramatically over the past eight years while ridership has dropped to its lowest level in two decades.

Eighteen of Macatee’s recommendations were included in the amendments.

Lekstrom also announced the province would inject $79.5 million over four years to B.C. Ferries to help take pressure off fare increases, on top of the annual $150-million provincial subsidy already received.

“All of us have to come together for a sustainable system,” said Lekstrom.

Taxpayers will provide B.C. Ferries with $49.6 million up front, followed by $10.5 million next year, $11 million in 2014, and $11.5 million in 2015.

Along with the cash boost, B.C. Ferries is tasked with finding $15 million in operational efficiencies and an additional $30 million in service adjustments. That could include reducing underutilized routes, some of which operate at less than 30-per cent capacity.

“At this point everything is on the table,” said Lekstrom, adding that cable ferries and bridges would also be considered if communities support them.

The legislative amendments will give Macatee more flexibility to determine the amount of revenue needed to sustain operations and support ongoing investment in the service.

To make his report, Macatee consulted more than 2,000 B.C. residents with stakes in the ferry service.

Lekstrom said coastal communities will continue to play a large part in determining how B.C. Ferries operates in the future.

“Options that local communities want to bring to the table is a discussion we are about to engage in,” he said, adding that some decisions ferry-dependent communities make could be “uncomfortable”.

Other recommendations Macatee made included switching the fleet to liquid nitrogen gas from diesel to save about $30 million in fuel costs and linking fare rate increases to inflation, something Lekstrom admitted will take some time to implement.

Current fare increases are capped at just over four per cent. It costs two adult passengers and a vehicle $79.55 to go one way from Departure Bay to Horseshoe Bay.

Mike Corrigan, B.C. Ferries chief executive officer, said the cash boost and $45 million in service efficiencies will help the corporation meet its financial goals and take the pressure off fare rate increases, adding communities will play an important role in determining those efficiencies.

“As for Ferry Advisory Committees, I would say they will take a leadership role representing their communities out there in terms of what are the important issues for ferries and ferry services going forward,” said Corrigan. “The FACs are vitally important today and will be more important going forward.”

Corrigan added that despite financial woes, B.C. Ferries staff and user safety has not been affected.

Lekstrom said community engagement will occur immediately and once the changes are implemented, B.C. Ferries will be charting a new course.

“The ferry system is going to look different,” he said. “It’s got 52 years of experience behind it, but we cannot continue to see B.C. Ferries run with under-utilization.”