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A worker walks past the smokestack on the B.C. Ferries vessel Queen of Oak Bay at the Horseshoe Bay Ferry Terminal in West Vancouver, B.C., on Tuesday March 5, 2013. (DARRYL DYCK For The Globe and Mail)
A worker walks past the smokestack on the B.C. Ferries vessel Queen of Oak Bay at the Horseshoe Bay Ferry Terminal in West Vancouver, B.C., on Tuesday March 5, 2013. (DARRYL DYCK For The Globe and Mail)

Gary Mason

Free passes show that BC Ferries is private in name only Add to ...

In one of her recent year-end interviews, Premier Christy Clark was asked about BC Ferries employees being able to sail on company vessels for free while the rest of the public was burdened with higher fares and lower expectations.

Ms. Clark responded that giving free passes to employees past and present was not something she would do if she were running the corporation. But, she quickly added, her hands were tied when it came to doing anything about it – BC Ferries is an independent corporation at arms length from government.

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On the surface, it seemed like a reasonable response, spoken like the true populist that the Premier is. However, when you consider her stand against events of recent weeks, it suddenly seems disingenuous.

It was the provincial government, you will recall, that just announced nearly 7,000 sailings on 16 different routes were being slashed in a bid to save about $14-million. It also instructed the ferry corporation to find another $5-million in savings on major routes before the spring of 2016. It was the government that additionally declared seniors can no longer ride free during the early part of the week and instead will receive a 50 per cent discount on the full fare.

And before those measures, the ferry corporation revealed changes to executive compensation that ended a controversial bonus program. It is fair to say the corporation did not embark on this initiative independently – it was ordered to do so by the government.

Around the time the province announced the cuts to sailings and seniors’ discounts, ferries CEO Mike Corrigan appeared on CKNW’s The Bill Good Show. Mr. Good asked the ferries boss several questions about the changes, most of which Mr. Corrigan deferred to the government. He said the corporation was merely the service provider, and when it came to discussing matters of public policy, well, those were queries that were best directed at Victoria.

Leaving it clear that the governance structure around the ferry corporation is at best confused, and at worst, a complete sham.

The ferry corporation has never been the independent, commercial enterprise the Liberals bragged about creating in 2003. Even after it was changed from a Crown corporation to a new, private entity under the Company Act, it had only one shareholder: the provincial government. Obviously, the government could not give up complete control over something as important as ferries – a vital transportation provider for the province. So it did the next best thing: It created a corporation that had the feel of a private company but would ultimately be answerable to government.

But is it a business model that makes sense? Many believe it is not.

As Jordan Bateman of the Canadian Taxpayers’ Federation and others have pointed out, the notion of something being “quasi private,” does not work. “It’s like being pregnant – you aren’t a little bit pregnant, you are either pregnant or not,” Mr. Bateman said. “If you really want BC Ferries to make these [tough] decisions, you’ve got to throw them to the wolves, let them sink or swim on their own merits … or you bring them back into government, which the government is reluctant to do, because they don’t want the debt on their books.”

Mr. Bateman is right. The ferry service debt stands at $1.35-billion, most of it money the corporation has borrowed to finance the modernization of the fleet and terminals. If the government took back control of ferries and re-established it as a Crown corporation, that debt comes with it. That would not be acceptable to the Clark regime, which has made balancing its books and maintaining the highest possible credit rating top priorities. The last thing it wants is a fresh pile of debt.

So for now we are left with the absurd situation in which the ferries corporation is a private company in name only. The provincial government calls the shots and will forever. If Ms. Clark wants the company to stop giving free passes to employees, all she has to do is say the word, the same way she did with executive bonuses.

To say that her hands are tied is simply not the case. More likely is that she does not want to upset thousands of ferries workers who have come to accept the free travel as a condition of employment.

 

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@garymasonglobe

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