NEWS RELEASE – from the Ferry Advisory Committee Chairs (FACC)

New ferry fare hikes: Beyond the tipping point

02 OCTOBER 2012 – Representatives of coastal ferry users say new ferry fare hikes announced Monday raise questions about the effectiveness of government response to the ferry affordability gap.

The Ferry Advisory Committee Chairs (FACC) are concerned that fare hikes are double the inflation rate. “Fares will continue to grow much faster than people’s incomes unless government faces the causes of the affordability crisis,” says Tony Law of Hornby-Denman FAC.

In January, a BC Ferry Commission study found that ferry fares were then at the tipping point of affordability, and causing hardship in coastal communities. Since then:

  • Current fares are at the tipping point + 4.15 percent;
  • Next year those fares will have another 4.1 percent increase;
  • The following two years will see two more increases, 4.0 and 3.9 percent;
  • Existing fuel surcharges continue on top of that, and will change with future fuel prices.

The ferry commission calculates fare increases based on numbers from BC Ferries and government. Key numbers come from government’s response to the commission affordability report:

  • $33 million in new government contribution to BC Ferries over the next three years;
  • $74 million in cuts over the next three years – $30 million in service cuts, $15 million in new BC Ferries efficiencies, and $29 million remaining of previously agreed-upon efficiencies of $9.8 million per year.

The new money aims to help BC Ferries maintain a good bond rating and reduce upward pressure on fares. Without it, fare hikes would have been a few percentage points higher.

The effect of the cuts on future fares and traffic is harder to assess. The FACC are concerned that service cuts – unless they’re done very carefully and with ideas from communities – could aggravate the downward spiral in traffic and upward spiral in fares.

“Both spirals are the kiss of death to dozens of coastal communities,” says Brian Hollingshead of Southern Gulf Islands FAC. “More than anything, we need a public policy approach that aims to sustain our communities, stem the damage from high fares, and grow our potential.”

The heart of such policy is sound public infrastructure, recognizing that ferry service is part of BC’s core infrastructure. The FACC believes this requires government to bear a greater share of the escalating costs that are causing escalating fares:

  • fuel prices;
  • revenue shortfalls from falling traffic;
  • overdue and urgent need to replace very old ships and docks.

Public infrastructure costs money, and ferries are public infrastructure. They’re public access to the whole coast, serving dozens of communities, hundreds of kilometres of coastline, close to 9 million vehicles and more than 20 million passengers a year, from all over BC and beyond.

Consider all that, and compare it to the costs of other public projects, which increasingly approach or exceed billions of dollars. It quickly becomes clear that ferry service, as essential public infrastructure, is a bargain at the current cost, around $150 million a year.

And it’s still a bargain if government shoulders more of the costs to make it affordable.

BC Ferry Commission ruling: http://www.bcferrycommission.com/reports-press/whats-new/final-price-cap-decision-released/

This release: http://facchairs.wordpress.com/2012/10/01/release21/