General News · 5th November 2008
BC Ferries will host a “Town Hall” meeting 7-9 p.m. next Thursday (Nov. 13) in the upstairs meeting room at the Quadra Community Centre. BCF's Executive V-P and Chief Financial Officer Rob Clarke and other BCF management will be there to answer questions and hear ferry users' concerns. BCF asked me to chair the meeting. BCF plans to hold an evening public meeting on Cortes in the spring.
Our Ferry Advisory Committee's last meeting of its three-year term will be held the following morning (Nov. 14) from 9-12 at the Heriot Bay Inn. This meeting is also open to the public. If you are interested in serving on the FAC for the next 3-year term, please email me (sprungmantwincomm.ca) or Amar Johal, BCF's Director of Sales and Community Relations (Amar.Johalbcferries.com).
A Midwinter's Ferry Tale
At last, some good news about fares:
The hefty August 1 fuel surcharges were cut in half Tuesday because of falling oil prices. And all of BCF's fares will be reduced by one third for December and January, due to a decision by Premier Gordon Campbell to ante up $20 million from the provincial treasury to restore some canceled sailings and hopefully boost declining traffic.
The Campbell River-Quadra Experience Card charge for a car and driver dropped from $18.30 to $16.70 on Tuesday and will be $11.70 for the two midwinter months. The passenger fare went from $5.15 to $4.70 on Tuesday and will drop to $3.30.
A car-and-driver roundtrip from Campbell River to Cortes was a $42 Experience until Tuesday when the surcharge cut made it $38.45. In December and January, it will be $26.95. A Cortes passenger was paying $6.75 for the same trip at the card rate. Tuesday that fare became $6.20. On Dec. 1, it will be $4.35.
Cash and commercial rates will be lower in similar proportions. On the Vancouver Island-Lower Mainland ferries, two people and a car will pay about $50 each way in December and January instead of about $75.
What prompted this sudden response by the government, after five years of pushing BC Ferries' increasing costs onto ferry users, was a precipitous decline in traffic on the major routes in September. Traffic didn't just back off. “It went off a cliff,” CFO Rob Clarke said.
With BCF's 2008-09 business plan predicated on 2.3% more passengers and 2% more vehicles than the year before, BCF and the government were startled by a 13% drop in fare revenue on BCF's major routes this September compared to 2007. Over the whole system, there was a 10% drop.
Of course, the greater financial world was bubbling like fondue, gas was almost as costly per litre as bottled water, and the Canadian dollar was as unattractive to U.S. travelers as their investment statements.
BCF responded by parking some of its brand-new Super C ferries in favour of smaller, older ships on the mainland-Vancouver Island runs and by canceling some sailings on those routes and on the Horseshoe Bay-Langdale route that connects the Sunshine Coast to Vancouver.
Raising fares is one thing. We whine and travel less. Cutting the schedule is something else. Residents of the Sunshine Coast who depended on those sailings responded with a roar of objection that crossed the water to Victoria like a tsunami.
Singing A Different Tune
The day after Premier Campbell acted to restore the service and reduce fares, three of us representing the 12 FACs on the coast were in Victoria for a prearranged meeting with Transportation Minister Kevin Falcon to discuss a paper we had submitted calling for a “Minor Routes Strategy for Coastal Ferry Service.”
This session was very different from five previous meetings the FAC Chairs had with ministry officials. The 16-page paper, drafted by Tony Law, the FAC chair for Hornby & Denman, contained many of the arguments we had made before to no avail, but it also analyzed many options for cutting BCF's costs and increasing its revenue and defined the limitations of each approach.
The Minister told us he used many of the points in the paper to explain the choices to the Premier who had decided to provide some relief for ferry users in his 10-point plan in response to “these turbulent economic times.”
“We want to help our coastal communities, retail and tourism sectors during this key time of business and to help families connect during the upcoming holiday season,” the Premier said. “It will require $20 million in one-time funding. This will reduce costs for passengers and will act as a bridge until lower fuel prices work their way through to lower ferry fares.”
Of course, nobody knows what the price of oil is going to be. In six months, it's gone up above $140 US a barrel and it's dropped below $65 US. But now the Canadian dollar has also tanked, and BCF has to pay for its fuel in greenbacks.
Even if oil stays down and the rest of the fuel surcharge comes off, fares will only go back to what they were in July, and the Ferry Commissioner has already approved an increase of up to 7.2% next April 1. By the May provincial election, Campbell's Christmas gift will be a distant memory.
To have a meaningful, long-term impact on the cost of ferry travel, the government is going to have to increase the annual service fee it pays BC Ferries. The quasi-privatized vehicle the Liberals created for BC Ferries in 2003 has crossed the centre line and is colliding head-on with market forces its designers didn't anticipate. Minister Falcon seems to be recognizing this.
In our meeting, he characterized the Dec/Jan fare reduction as a "shot in the arm" to "bridge us into the new year." He said BC is going to be "buffeted hard by what's going on" in the world economy and that they were "concerned people would stop traveling."
He called it a "commercial decision to buy down those fares and to restore those services" and said they are "hoping to see a spike in ridership" over the two months. This gave us an opening to talk about getting together again. He agreed we should "see how things are going" and "look at what we need to do then."
I referred to Falcon's comments after the August 1 surcharge about cutting service levels--and the reference in both BCF's annual report and 2008-09 business plan to looking at changing service levels as means of cost-cutting- and I asked if he now thinks that "service cuts are not the way to go." He paused and then said very deliberately, verbatim, "Yes, it's fair to say that."
In spite of my cynicism about what politicians will say in the months before an election, I think our message is getting through. All over the coast, in the media ferry users read, FAC members, local government leaders and BCF's management have made it clear that it is the government's “public policy” that ultimately determines what riding the ferries costs.
Enjoy the respite. It's long overdue.
Q. Cove Questions
Noting that the bathrooms in the new Quathiaski Cove terminal building were frequently “out of order” this summer, Quadra FAC member Connie Burns heard the water supply was limited and asked what was being done to correct the problem.
In an email, Rob Seitz, BCF's project manager for terminal construction, said it wasn't a water shortage that shut down the bathrooms but pumps that “weren't working properly.” Changing to larger pumps, he said, has solved that problem.
But water supply and quality are concerns. BCF has a well at the top of the hill next to the holding lanes and has an agreement with the Q. Cove Harbour Authority “to provide them with any excess water we do not need,” Seitz wrote.
He said BCF recently installed a larger storage tank, but the water from the well still isn't potable. As a result, the Harbour Authority hasn't drawn from BCF's well yet and BCF is “working on resolving the water quality issue.”
Likewise, BCF is still working on how to better manage traffic on the hill in overload conditions. Two meetings that were scheduled at Q. Cove couldn't bring together all the desired participants-BCF & Dept. of Highways' managers, FAC representation and the regular Q. Cove lot attendants. The effort to get the right people on site at the same time continues.
If you have a vision of how everything could be better or a question about why something is the way it is, bring it to the Town Hall meeting next Thursday.
No Kudos 2 Campbell
Comment by walker evans on 10th November 2008
Where was G. Campbell when fares kept rising and rising (doubling) ? Nowhere to be found. Apparently it was all David Hahn's operation. All of a sudden Campbell's all over the airwaves announcing all kinds of goodies...fare rollbacks D. Hahn hadn't even been notified about ! The real reason for all this temporary relief is the upcoming election in May. He's trying to buy your vote ! One more thing, His announcement to "freeze" property assessments at 2007 levels is just to try to freeze his tax revenue at its peak. If your property is worth 20% less than last year wouldn't you rather have your assessment go down and pay less tax ? (I know that then they'd probably adjust the mill rates upwards !!!)
New ferries or no ferries
Comment by Barry Saxifrage on 10th November 2008
Thanks John for your tireless work to keep ferries affordable for us all.
In the long run we also must have new ferries that don't require so much fossil fuel to operate if we want to continue our ferry service.
While oil prices are low now, they won't be for long.
Even the most conservative oil group of all, the International Energy Agency (IEA), now says the best case scenario is $200/barrel in next couple decades.
IEA says that to keep the price down to "just" $200/barrel will require an unprecedented increase in global funding for exploration and development to $24 trillion dollars.
But exploration dollars by all major oil companies is currently declining because of high costs and unpredictable oil prices. Credit Suisse report out last week says oil exploration and development dollars will fall 20% this year if oil price stays where it is now.
A leaked IEA report says that if oil exploration dollars stay at current levels we face a possible 9% per year decline in global oil production. That's 50% decline in 5 years. The price of oil at that point will be off the charts.
So even under the most optimistic scenario of the most conservative oil forecast we are looking at $200/barrel oil soon. More than triple today's price. When the oil-forever cheerleaders are suddenly starting to sound the alarm we need to get serious about reducing our demand in time.
Hopefully this reality of the end of cheap oil will make it to the planners at BC Ferries in time to design and develop alternative ferries for our route.