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With costs rising and ridership falling, the province, the ferry commissioner and the corporation are at odds over the best course forward for essential ferry service on the westcoast

The Queen of Cowichan near the Horseshoe Bay ferry terminal in West Vancouver on Jan. 22, 2015. (John Lehmann/The Globe and Mail)

When BC Ferries proposed to save money by cancelling its major sailings out of the Horseshoe Bay terminal last fall, merchants in the nearby village felt the ground shift beneath their feet. Restaurant manager Holly Kemp is still holding on with both hands – she fears the storm has not passed.

An efficiency report from the Crown corporation floated the idea of trimming services between West Vancouver and Vancouver Island to alleviate both highway and marine congestion. Transportation Minister Todd Stone was initially open to the idea, as it would avoid the need for costly upgrades to the terminal. But when the proposal became public, he quickly caved to pressure from his caucus and killed the strategy.

That might have been the end of a poorly launched trial balloon. But the idea is still afloat as BC Ferries aims to meet the province’s demands to curb costs.

Performance, by the numbers, has not looked especially brilliant over the last decade. Fares have steadily climbed to offset spiralling fuel costs and to pay for an ambitious capital program to maintain an aging fleet and terminals. Not surprisingly, ridership has declined, which in turn puts more pressure on the bottom line.

BC Ferries is supposed to run like a private corporation, but it is fettered by the provincial government’s constraints. There is a tug-of-war taking place between the corporation’s headquarters and Mr. Stone’s office over the future. The corporation says fares must rise, services must be cut, or the provincial subsidy has to grow. Mr. Stone wants none of that, but hasn’t offered an alternative.

Wading into the middle of this is BC Ferry Commissioner Gordon Macatee, the independent regulator of the Crown corporation. And he says it is too soon to say what the correct course is.

He is studying the proposal to dramatically change the links between the mainland and mid-Vancouver Island – routes that carry more than 10 million passengers each year. The commissioner will make recommendations in March on a series of proposals designed to curb rate hikes for ferry users.

Currently Mr. Macatee has a private accounting firm running the numbers to determine whether the proposed changes, which also include a new reservation system and vessels powered by liquefied natural gas, make sense.

“BC Ferries provided an efficiency proposal for me to look at and to consider. I will be looking at it,” Mr. Macatee said in an interview.

He said the province “kind of got ahead of the process” when Mr. Stone ruled out the proposed changes at Horseshoe Bay, because the numbers just might work. On the other hand, BC Ferries may not be able to justify its claims that the terminal needs a huge cash injection to maintain the facility.

“It’s an important piece of information. If you are going to rule anything in or out, you should understand what its impact is. I certainly haven’t come to any conclusions about the merits, but I’ll certainly make reference to what they proposed.”

Mr. Stone says there is no need to look further because it is a bad idea. But what is the alternative – carry out the risky, costly and disruptive upgrades at Horseshoe Bay? “Perhaps that capital investment could be reduced,” he said in an interview.

Mr. Stone says he has a clear plan for the future, which centres on wrestling down the rate of fare increases.

“The vision is to get to the place where those who depend and rely on the ferry service, that those people are not faced with annual fare increases to the extent that they have been for as long as we can remember.”

He said he will look at Mr. Macatee’s advice when he reports in March, but the minister stressed that he may not accept it. “He’ll make some recommendations on a range of issues including efficiency suggestions. We’ll take his recommendations seriously as we always do, we will thoroughly review it. We may accept some, we may not agree with others.”

By carrying on with his work as if Mr. Stone had not spoken, Mr. Macatee is effectively saying that British Columbians should be prepared to look at new ideas.

Holly Kemp, the general manager of Troll’s Restaurant in Horseshoe Bay and head of the local business association. (John Lehmann/The Globe and Mail)

That is why Ms. Kemp, general manager of Troll’s Restaurant, is holding off on patio renovations. The fish-and-chips shop is a landmark, almost 70 years on the waterfront, and she estimates that three-quarters of the restaurant’s patrons have a ferry to catch. She doesn’t believe Mr. Stone really has secured the future of the Horseshoe Bay-Departure Bay run.

There is a symbiotic relationship between the ferry terminal at Horseshoe Bay and the boutiques and restaurants in the village. The confined terminal offers almost no space for retail services, so BC Ferries has installed an overhead walkway that allows passengers waiting for their sailing to leave their vehicles in line to grab a bite or shop.

“It would be a sorry little spot without BC Ferries,” Ms. Kemp said.

Each year, BC Ferries carries 3.3 million people between Horseshoe Bay and Nanaimo’s Departure Bay – the only alternative route between the mainland and Vancouver Island is via Tsawwassen. Cancelling the Horseshoe Bay sailings would increase traffic at Tsawwassen’s Swartz Bay by about 60 per cent.

Ten years and change

Over the past ten years, ferry fares have climbed and ridership has dropped. Here is a snapshot:

Fuel up by 152 per cent

2004 - cost of fuel was $50-million

2014 - cost of fuel was $126-million

Ridership down by nine per cent

2004 - 21.4 million passengers (and 8.3 million vehicles)

2014 - 19.7 million passengers (and 7.6 million vehicles)

Fares up by 47 per cent

2004 - car and driver on the major routes cost $47.25

2014 - car and driver on the major routes cost $69.50

Source: BC Ferries

The alternative, BC Ferries says, is to proceed with risky and disruptive terminal upgrades – for what, exactly, the corporation won’t say.

Horseshoe Bay is an awkward terminal, hemmed in by rock, road and rail. It has fewer berths but manages many more sailings each day than Tsawwassen. “The Horseshoe Bay terminal suffers from congestion, both in the marine and shore-side terminal environments. An increased investment beyond $200-million can alleviate the shore side terminal congestion; however, with status quo service, the marine congestion issue will remain,” the efficiency report warns.

“Considering the challenging shore-side conditions, topography and operational constraints, major construction activities at Horseshoe Bay carry significantly higher risk of successful execution and of business interruption than at other terminals.”

West Vancouver Mayor Michael Smith bluntly says the corporation is exaggerating the problem, and said the province needs to show stronger leadership.

“I don’t think it is physically possible to spend that much unless you put in solid gold pavement,” he said. “On the holiday weekends, yes, we have a significant traffic problem in Horseshoe Bay, but we don’t want to throw the baby out with the bathwater.”

It is worth noting, however, that BC Ferries’ proposal does leave the door open for other changes that Mr. Macatee will consider. The variations include consolidating the two Nanaimo terminals, or shifting only some of the Horseshoe Bay traffic to Tsawwassen, or providing passenger-only services.

Barry Cavers used to commute by ferry every weekday through Horseshoe Bay to his home in Roberts Creek on the Sunshine Coast. Today he chairs the advisory panel for the ferry users on the Sunshine Coast. He says the province is wrong to shut down a debate about future service levels.

“I applaud BC Ferries for putting it on the table. Change happens. We should critically look at what we are doing today and ask the hard questions so that we can manage that change,” he said. “We need a long-term plan and the vision has to come from the province.”

In recent months, BC Ferries and the provincial government have tussled over just how to minimize fare hikes, debated the level of the province’s subsidy and argued about service levels. It is a debate that has been going on for 55 years and it all revolves around roughly the same blueprint for moving British Columbians and their vehicles between coastal communities.

The independent regulator of the ferry service is trying to lead both sides to a fresh discourse. In his 2012 review of the Coastal Ferry Act, BC Ferry Commissioner Gord Macatee looked at the billions of dollars that BC Ferries intends to spend on upgrades to its fleet and terminals. Here’s what he said then and the questions remain:

What’s the plan

“Given the magnitude of these investments, the Commissioner is concerned that there does not appear to be a long-term vision for coastal ferry services nor any forecast of long-term demand. A clear vision of where the ferry system should be going is important so we don’t saddle our future with a fleet designed to serve the needs of the past.”

Swap and sail

“The current long-term capital plan is essentially a ‘like for like’ plan. When one large car ferry is removed from service, it is replaced with another large car ferry... The vision should speak to the desirability of standardization and interoperability of vessels and terminals, a vessel-size policy which will enable flexible deployment of equipment.”

Who do we serve

“The ferry business could be more about moving people rather than vehicles, and delivering them to communities where they work and shop rather than to vehicle terminals which are often many kilometres from a town or city.”

How do we serve

“The ferry system could possibly be better integrated with other forms of public transportation. There could be a place for other kinds of service, such passenger-only ferries, barges, water taxis and shuttle buses to connect ferries with other forms of transportation.”

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