General News · 6th November 2013
Enough is enough with the BC Ferry Corporation
Have you ever wondered what a robust, fairly-priced and well-run ferry system would look like? Look no further than Washington State. For a good indication, read through Michael Dean Bennion’s 72 page comparative study of the world’s top 26 ferry systems, “A Comparison of Operational Performance: Washington State Ferry Operators Worldwide.” Most relevant for our purposes is how the Washington State Ferry corporation (WSF) stacks up against ours, the BCFC.
While their over-all “trip reliability” rating was virtually identical, BC Ferries “on-time departure” record was conspicuously worse. Regarding passenger safety, WSF recorded a ratio of 5.02 injuries per million transported in 2002, while in 2009 BC Ferries reported a ratio of 13.17. Cost efficiency? WSF reported an average cost of $10.08 per passenger transported while BC Ferries reported expenses of $502.5 million or $24.24 per passenger in the same year (2009). In both services, fare recovery rates were more or less equivalent, as were labour costs, constituting approximately half of all expenses. But it is how those labour costs are distributed amongst the employees that highlights the major difference between the two corporations.
Despite the fact the WSF is roughly half the size of its BC counterpart, in 2012 it carried two million more passengers and three million more vehicles with 14 fewer ships. Nevertheless, the President of BC Ferries, Michael Corrigan, at $364,000 per year, is paid more than double the base salary of his opposite number, David Mossely ($151,949), plus a vehicle allowance of $8,477, two pension plans, and performance bonuses which in 2012 came to $64,421. Moseley’s vehicle allowance and performance bonuses? Zilch. Nada. And nothing for other WSF executives either.
In addition to the generous compensation packages that it pays to its CEO and top executives, BC Ferries pays the part-time chairman of its board of directors $100,000 annually, and $42,000 a piece to the eight directors. Meanwhile, back in Washington State, eschewing an unnecessary layer of bureaucratic fat, the WSF reports directly to the Governor. That’s right, the WSF delivers passengers on time without incident with a bargain-basement corporate head and no board of directors. At BC Ferries, however, management’s idea of a “cost-containment strategy” is to threaten its clientele with $26 million in service cuts. The executive feeding frenzy is to continue.
The Hahn legacy was to take a corporation that made $49.9 in profits in 2006 and turn it into a white elephant with a $1.3 billion debt eight years later. To add insult to injury, following its 4.1% fare hike in the spring, showered its own employees with $900,000 worth of $300 gift cards in recognition of an “excellent safety record” that is less than half as good as the WSF’s. While the private sector experienced job losses and frozen wages, 60% of BC Ferries employees earned more than $89,000 year, making them among the top 5% of Canadian wage earners, an average no doubt skewered by the vast compensation packages that were awarded to upper management. Last year four BC Ferries executives made $85,000 each in bonuses, while 1005 managers made $1,632 each. 3,000 union employees, however, made only $300.
Meanwhile, over the eight years of the Hahn regime, ferry travellers struggled to pay fares that rose 45-80%.
A glance at the respective websites of BC Ferries and the WSF reveals that right across the board, fares in Washington State are lower, much lower. For example, on the main route between Tswassen and Swartz Bay, a round trip of car and passenger will cost you $133.50. The main Washington State ferry route between Seattle and Bainbridge Island, car and passenger, though, will cost just $34.12. As Caroline Orr of Bowen Island remarked, “I recently visited Orcas Island, Washington, and discovered that the return fare on their ferry was less than for the 1 ½ hour ride from Anacortes to Orcas than the 20 minutes to Bowen Island from Horseshoe Bay - not to mention the huge difference in the cost of BC Ferries to Nanaimo for the same 1 ½ hour ride. I feel that there is no excuse, other than greed and a complete disregard for the ridership for the rates charged by BC Ferries.”
Greed - or incompetence - take your pick. Hahn tried to convert the corporation from a people and goods mover to a boutique tourist shop, with the result that it bled passengers and money. And in trying to offset the losses with rising fares, BC Ferries forced ordinary travellers to cut their discretionary trips, further lowering ridership. A vicious circle.
In comparing BC Ferries to its sister fleet to the south, several questions arise.
Do we really get what we pay for? Does hiring high-priced “talent” at the executive level actually result in superior performance? BC Ferries’ top executives make 3.5 times more than the executives with the Washington State Ferries service, but is our ferry system 3.5 times better than theirs?
Try these recommendations: Stop executive pork-barrelling in the BCFC. Fire the BCFC board. Amend the Coastal Ferry Act to prevent further raises and bonuses in the BCFC. And make the BC Ferry Corporation directly accountable to the Minister of Transportation.
Enough is enough.
October 9, 2013
originally published by Quadra Island "Birdseye"