BC Ferries: Out at Sea
Fifty years after its creation, has BC Ferries lost its way?
In keeping with its mission to get people onboard, British Columbia Ferry Services Inc. has a come-hither slogan: “Experience the difference.” There’s no doubt the organization popularly known as BC Ferries isn’t what it used to be, but whether or not that’s a good thing is up for debate.
Under president and CEO David Hahn – who took over BC Ferries in 2003 with a mandate to run it at arm’s length from government – there have been outrages aplenty. With help from fuel surcharges, fares have increased anywhere from 60 per cent to more than 120 per cent, depending on the route. In 2004, unionized workers fumed over the decision to have three ships built in Germany; two years later, the Queen of the North sank, killing two passengers and raising broader safety questions about the BC Ferries fleet. And the optics of Hahn’s pay package, which has doubled to $1 million since 2004, certainly haven’t helped.
Then there are concerns about the accountability and transparency of the corporation, a publicly supported monopoly that got a seven-year exemption from provincial freedom-of-information laws. Last year, on the recommendation of the comptroller general, the province brought BC Ferries back under FOI legislation. Victoria also introduced salary caps, but only for future executives and directors.
But Hahn wasn’t done grabbing headlines: A few months ago, he warned that more big fare hikes may be necessary. In late March, BC Ferries won preliminary approval from its independent regulator to raise rates again. Between 2012 and 2016, the price of a ferry ride could climb almost 18 per cent on the three Lower Mainland-Vancouver Island routes and the Horseshoe Bay-Langdale route, and more than 37 per cent on the other 21.
Watching these events, British Columbians could be forgiven for thinking that the invisible hand of the marketplace is giving them the finger. They might also ask what role coastal ferry transportation should play in their lives. Is BC Ferries simply a business, or is it a vital public institution that is part of the province’s connective tissue?
Some observers say the corporation, which turned 50 last June, has changed for the better since the Gordon Campbell government took it semi-private with the Coastal Ferry Act of 2003. The province was right to shift more of the burden of cost increases onto users, they contend. A financial mess under the NDP – don’t forget those fast ferries – BC Ferries now operates like a real company. Today, with a manageable $1.4 billion in debt, BC Ferries has credit ratings of A and A+ from DBRS and Standard and Poor’s, respectively, with net earnings in fiscal 2010 of $3.4 million. The ships run on time, and customers are seemingly happy: an independent survey by Vancouver-based Mustel Group saw customer satisfaction reach a record 91 per cent in 2009, compared to 82 per cent in 2003.
“In terms of the shift, I think that it was a positive move,” says David Gillen, director of the Centre for Transportation Studies at UBC’s Sauder School of Business. “Governments should not be in that particular type of business.” Gillen says his research on airports shows that the BC Ferries model – privatization with a price cap – is probably the best mix of governance and regulation.
Admitting that fares are high, he wonders how much responsibility the provincial government has to link its citizens through ferry access the way it does with roadways in rural B.C. “Are we required to perform that same service for people who are living on, say, the Gulf Islands?” Gillen asks. “That’s debatable, because the cost of that service is really quite remarkable.”
Others strongly disagree. According to the NDP’s deputy critic for Transportation and Infrastructure, Gary Coons, “skyrocketing” fares and falling ridership are stifling economic growth in coastal communities. The MLA for the North Coast, which includes Prince Rupert and Haida Gwaii, calls the new BC Ferries a failed experiment in privatization.
“David Hahn keeps talking about how clean the washrooms are,” Coons says. “But thousands of people in dozens of communities just want a service to get them from Point A to Point B, and something that is affordable and safe and reliable.”
For Coons, though, the real villain isn’t Hahn; it’s an ideologically motivated BC Liberal government. As far as he’s concerned, there’s no long-term vision or strategy for BC Ferries. And to make matters worse, Coons says, no one is looking out for the public interest. “I believe the social and economic contract that we’ve had for 50 years has been severed.”
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