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Greater Victoria, BC News

ARTICLE

Date ArticleType
4/11/2015 Published Article
BC Ferries: A Fee Structure that Fits - OpEd

It’s time to take a stand against the rate hikes announced by B.C. Ferries that are unfairly burdening residents of Greater Victoria.

As advocates for business people, we understand and support the idea of trying to run B.C. Ferries as you would any other corporation. Deliver a service and charge fair rates to maximize profitability and protect the long-term security of the company.

However, we question the way B.C. Ferries has gone about this latest round of fare hikes. In fact, we wonder if these increases might even make things even worse for B.C. Ferries’ bottom line.

On April 1, B.C. Ferries effectively increased the fare for travelling between Swartz Bay and Tsawwassen by 2.9 per cent. The rate actually went up 3.9 per cent but a one per cent reduction in the fuel surcharge came into effect at the same time. On top of this year’s increase, the ferry commission has agreed to annual increases for the years 2016 to 2020, capped at 1.9 per cent per year.

Common sense (and no shortage of reports and studies) tells us that raising rates lowers ridership. This hurts one of the only routes that makes money, the Swartz Bay to Tsawwassen run used by people who live in our region. In a very real sense, our residents are being burdened with the impossible task of subsidizing all the other unprofitable routes in B.C. Ferries vast and historic system.

Ideally, what we’d like to see happen is for the corporation to better address issues of capacity. The Swartz Bay to Tsawwassen run should be a breakeven operation and not a cash cow that can be milked dry for the benefit of others. That is not a long-term solution for a system that shows no realistic sign of ever being able to stop bleeding red ink.

Yes, fares are going up across the province, but painting all routes with a broad brush is better politics than business. The reality is the service between Greater Victoria and the Lower Mainland is the backbone of our ferry system. It accounts for about one quarter of all the passengers and deserves to be treated differently.

We need to invest more in this route and move beyond the tired argument of using its profits to help pay for service elsewhere.

Simply put, why do the citizens of Greater Victoria have to pay to keep island communities viable? Yes, the province has an obligation to support these communities - B.C. towns which are affected by shifting economic realities. There is a role for government to help these centres survive and thrive in the 21st century but this is a burden that must be borne by all British Columbians.

There may even be a role for the federal government to help with the massive capital expenditures required by B.C. Ferries. Ottawa contributes to ferry systems in the Maritimes and there’s no reason British Columbia shouldn’t demand equal treatment.

B.C. Ferries President and CEO Mike Corrigan and his team deserve credit for the good work they’ve already done, such as controlling administrative costs and executive compensation. BC Ferries has much more work to do, and I look forward to hearing what they have planned.

There is a will to improve the system for the benefit of future generations and there have already been some sound ideas put forward by the B.C. Ferries Commission. The commission’s recently released assessment identifies a number of sensible ways to create efficiencies, including consolidating the two ferry terminals in Nanaimo.

It’s time for government to take action on these ideas before more damage is done to the economy of Greater Victoria. We must attract more people willing to do commerce with our region. For our Island city to truly prosper, an affordable ferry system is essential.

B.C. Ferries needs to rethink it fee structure and find a rate that results in more paying customers rather than fewer. Of course, there will be other logistics to work out, such as shifting schedules to ensure ships have the capacity to carry all those extra customers. But, wouldn’t that be a nice problem to have?
 
Bruce Carter CEO, Greater Victoria Chamber of Commerce

Times Colonist - April 11, 2015

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