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General News · 7th December 2013
Uschi Koebberling
Faced with the need to address a revenue shortfall of $18.9 million by 2016, BC Ferries is currently conducting a community engagement process to seek input into proposed service cuts and fare hikes ( http://www.coastalferriesengagement.ca/overview.html ).
You likely have heard or read about this, including seniors having to pay 50% of adult fares on the days that used to be free, further rate hikes, and service cuts, including the late sailings on the Campbell River-Quadra run. (All proposed measures are identified in the Engagement discussion guide accessible through the website listed above).

There is a Quadra Community meeting on Monday, January 9, 6 – 9 PM at the Quadra Community Centre (unfortunately, there is no meeting on Cortes, though we tried. But you can submit your comments by either filling out the feedback form in the discussion guide http://www.coastalferriesengagement.ca/feedback.html or send an e-mail to coastalferriesengagementgov.bc.ca
In the following I have highlighted some of the comments made by the Ferry Advisory Committee Chairs and other members on the 13 regional FACs, as well reports and position papers by various others to provide a factual overview of the ferries crisis context. This represents my selection, not the Ferry Advisory Comitte. Arguments put forward focus on 2 key points:
1. Fares are too high, ridership goes down as do revenues; sustainability starts with affordability.
2. The coastal ferry system is an essential extension of the provincial highway system and needs to be funded accordingly.

The following are some arguments and statements to help understand the broader context. It’s my personal selection not a regional committee position. The Chairs Committee submitted their position on October 16 to the Provincial Government. A copy can be obtained from the FAC Chair or any of the Cortes members listed at the bottom of this article.
1. Fares are too high, ridership goes down as do revenues, therefore more fare increases and services cut try to make up the shortfall. Sustainability starts with affordability.
o In January 2012, the BC Ferries Commissioner acknowledged in his report that ferry fares had ‘reached the tipping point of affordability’ and recommended a package of measures including an increase in government funding and capping future fares increases to the rate of inflation, balanced with service reductions on lightly-used routes and efficiency savings by the ferry operator.
Yet user fares keep climbing beyond the rate of inflation with a fare cap set at around 4%. Traffic on non-major routes started dropping in FY 2005 and 2006, coinciding with double digit annual fare hikes. Major routs fares started to climb substantially in 2008, the same time the economic crisis hit.
o No socio-economic impact study has been done to gauge the effects of these cuts and continued fare hikes, such as tourism and economic development. Services cuts are shaped primarily by the financial performance of each ferry route rather than an informed analysis of the needs and dependencies of each coastal community.
The December 2012 report from the Ferry Advisory Chairs states the following on the impact of increased fares on economic development and job creation: “This is a significant failure. The reality in our communities is the exact opposite of this intended goal. Ferry fares are a significant barrier to economic development and job
creation; they have triggered collapsing tourism, economic shrinkage and job losses.
Examples abound.”

o As the FAC Chair for Quadra-Cortes points out, the numbers underlying the cuts to the Quadra run are strictly based on vehicle traffic and do not account for foot passengers in ferries’ utilization, though both are essential to gauge community dependency on ferry services.
o BC’s coastal ferry users pay for new ships and terminals out of their fares by paying for the cost of the capital. Fares are set to cover those capital costs as well as operational costs. As the FAC Chairs report of October 2013 points out: “This is substantially different from ferry systems in Washington State, Alaska, Scotland and Newfoundland, where governments typically set fares to cover some portion of operational costs, and fund capital separately.” As a result, financing and amortization has created the greatest cost pressure for BC Ferries and is now 28% of its annual costs.
A tidbit rrom the Powell River Chamber of Commerce Report helps to understand : “On April 2, 2003, the government issued BC Ferries a debenture for $427,701,000, which BC Ferries promised to pay in cash. On May 27, 2004, BC Ferries paid the debenture of $427,701,000 to the government. BC Ferries also paid the government $25,879,191.49, which was an interest payment on the debenture. In addition, BC Ferries pays an 8% dividend per year of $6,038,160 to the government on its preferred shares, a dividend paid annually for six years for a payment total of $36,228,960. .. Since 2003, BC Ferry Services Inc has paid almost $500,000,000 in loan costs and dividends to the BC government.”
o MLA Claire Traverna prepared a report on Washington State’s ferry system ( http://bit.ly/17ZjCvc ) where the ferries are seen as part of the State highway.

2. The coastal ferry system is an essential extension of the provincial highway system and needs to be funded accordingly.
o The Union of BC Municipalities unanimously passed a resolution (Jim Abram reported this Discovery Islander) which basically said to insure that the Province would declare our marine highways as an integral extension of the terrestrial highways and be treated as such, and that fares would be lowered and service cuts would not happen. - I.e. all municipalities across BC supported this.
o There is funding, just not for the marine highways: Pacific Gateway Alliance: This alliance brought together several stakeholders in a unique partnership of transportation industries and governments to oversee $21 billion for the expansion of port, rail, road and airport facilities in British Columbia to provide BC with a comprehensive land and sea infrastructure to benefit from our expanding economic interaction with Asia Pacific countries. British Columbia Ferry Services Inc. is not a member partner despite the fact that it is the main network of connectivity with British Columbia coastal communities. Our Province’s Pacific Gateway Transportation Strategy 2012-2020 identifies $25 billion in new investments to build a world class transportation network to facilitate trade with Asia-Pacific countries. It does NOT mention our coastal ferries as part of this infrastructure. (http://www.pacificgateway.gov.bc.ca/documents/120402_Gateway_Strategy.pdf).
o The Powell River Chamber of Commerce is launching a campaign for fiscal fairness and issued a report on the lack of fairness and the discrimination of coastal communities by not financing the marine highways system comparable to that of the highways in the rest of the province: BC ferries directly services an area with 20% of BC’s population (Greater Vancouver area was excluded in this report), and a wide variety of industries and commercial enterprises which contribute roughly 36% of BC’s annual revenue. Yet the area benefits only from about 6% of capital expenditures on highways, including expenditures on ferries. They plan to work with other chambers for a united strategy. Contact officepowellriverchamber.com or your FAC members for an electronic copy.
A vision for ferries needs to start with a vision for coastal communities.
John Hodgkins, an independent transport consultant from Gabriola Island, prepared a discussion guide for government to pursue prior to the current engagement process. He highlights the urgent need for an assessing the needs of ferry dependent communities to ensure economic sustainability of the region as well as financial stability for the operator. These questions still need to be explored and are not part of the current engagement process Some of the questions he proposed:

Affordability
- How have rising ferry fares impacted on the ability to access essential goods and services?
- How can we measure the impact of rising ferry fares on local businesses?
- Have high ferry fares impacted on local tourism, and if so to what degree?
- Is the local population increasing or declining? How will this impact on future demand for ferry travel?
- Has population drift occurred as a result of rising ferry fares, and to what degree?
- What pressures do an ageing population place on the provision and affordability of ferry services?

Dependency:
- How dependent is each local community on opportunities, goods and healthcare and other services that can only be accessed using the ferry service?
- Do students depend on the ferry service to access school or college?
- How many residents depend on the ferry service for commuting to and from work? At what times?
- How dependent are local businesses on goods and services that have to be brought in by ferry?
- Is access to recreation (swimming, team sports etc) dependent on the availability of the ferry service?
- To what extent does the present ferry schedule satisfy (or fail to satisfy) each of these needs?
- How dependent is the local community on ferry-based tourism?
- Is the seasonal variation in ferry traffic reflected in the seasonality of the ferry schedule?
(An electronic copy of the discussion guide can be obtained through your FAC members)
If you decide to participate in the Ferries Engagement Process: Attend the Monday, December 9 Quadra meeting or submit your comments (Deadline is December 20, 2013).

Cortes members of our regional FAC are:
Noba Anderson directorcortesisland.com
Bertha Jeffery cmarkettwincomm.ca
Uschi Koebberling uschi.koebberlinggmail.com
Rod Lee rod_leeshaw.ca
Bob Tracy schoonisland.net
The Quadra-Cortes FAC Chair is : Paul Ryan pryanisland.net on Quadra Island