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The Globe and Mail

BC Ferries gets $80-million to hold line on fares

The Powell River Queen makes her way into in Campbell River, B.C., on April 3.

John Lehmann/The Globe and Mail/John Lehmann/The Globe and Mail

The provincial government has tossed BC Ferries an $80-million life ring to hold the line on fares – but further cuts and route changes are still planned for the service.

Transportation Minister Blair Lekstrom said the subsidy and amendments to the Coastal Ferry Act introduced in the legislature on Wednesday are meant to ensure fares stay affordable, but they will still increase, and the voyage ahead for some communities will be uncomfortable.

"Without question, there are going to be decisions that are going to be uncomfortable," Mr. Lekstrom said at a press conference after he introduced the amendments. "I will not sugar-coat the issue."

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He said BC Ferries plans to cut $45-million over the next four years, and those cuts could include service reductions to larger and smaller routes.

Mr. Lekstrom said the government will discuss service levels and fare increases at community meetings.

The government's $79.5-million subsidy will be doled out to BC Ferries over the next four years, starting with $46.5-million this year and moving between $10.5-million and $11.5-million over three years.

The province currently provides BC Ferries with $150-million annually, while Ottawa contributes about $26-million a year.

A system-wide report released in January by B.C. ferry commissioner Gord Macatee made 24 recommendations and concluded that the financial sustainability of the service faces considerable risk.

Mr. Macatee's report called for changes to ferry operations, including reduced service to smaller islands and holding future fare increases to the rate of inflation.

Ferry fare increases are currently capped 4.15 per cent a year.

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Ridership on BC Ferries has been declining, and company officials concede that customers, who now pay about $200 for a family of four to travel from Victoria to the Lower Mainland and back, are travelling less due to the expensive fares.

Last September, BC Ferries was forecast to lose more than $20-million amid fears of the lowest passenger levels in 20 years.

BC Ferries chief executive officer Mike Corrigan said the $79.5-million subsidy increase and the plans to implement up to $45-million in service efficiencies and reductions will help the company achieve its goal of keeping fare increases under control.

He said he expects the company to begin looking immediately at cutting late-night sailings across the system to save money. Mr. Corrigan said many late sailings carry few passengers and are constant money losers.

Mr. Corrigan said communities will face hard choices about service levels in the coming months.

"Part of it is the trade off between service-level reductions and what people are willing to pay, and you've got to get out and have that conversation," he said. "There may be some communities willing to pay a little bit more to keep the service they have."

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Mr. Corrigan said BC Ferries is exploring Mr. Macatee's recommendation of switching ferry fuel to liquefied natural gas from diesel, a potential annual saving of $28-million.

He said the company is also examining switching to a free reservation system and instead charging a fee at the ferry terminal to people who haven't reserved.

Opposition New Democrat ferry critic Gary Coons said the amendments offer few changes and will still result in fare increases.

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