News: BC Ferries commissioner proposes capping fare increases at 1.9 per cent until 2020

Globe and Mail - Mar 18, 2015

The commissioner of BC Ferries has proposed fare increases capped at 1.9 per cent a year over four years – from April, 2016, to March, 2020.

Gord Macatee said he based his decision on lower fuel prices and reduced executive compensation, which is now in line with several Crown corporations.

He said that four years ago, BC Ferries customers were facing the possibility of fares rising by as much as 80 per cent on some routes.

Executive pay at BC Ferries has declined significantly, from $3-million in 2009 to $1.8-million last year, Mr. Macatee said in a report issued Wednesday.

Under the current system, half of that compensation is based on performance and the rest comes from achieving corporate financial targets, he said.

“Cost control has been achieved while obtaining good outcomes with customer satisfaction and passenger and employee safety.”

Transportation Minister Todd Stone said the price cap of 1.9 per cent a year is the lowest since 2003.

Cost reductions by BC Ferries, the government’s historic investment last year of $180-million (which will be ongoing), the elimination of sailings in smaller communities and cutting a seniors’ discount helped get fares under control he said.

BC Ferries was headed for a further $1.2-billion shortfall without such measures, Mr. Stone said, adding that travellers could have faced fare increases of eight per cent a year for 12 years.

“We said in November of 2013 that our overriding objective and our vision for coastal ferries was to get fares where they were trending at the rate of inflation. At the time, we thought that it was probably going to take another four years to achieve that,” he said.

However, Mr. Stone said fare increases in the past eight years have made ferry travel unaffordable, though more people, especially Americans, are now starting to use ferries because of the drop in the Canadian dollar and a stronger U.S. economy.

By 2017, five ferries will be powered by LNG and save a total of $12-million a year for 27 years, he said.

Mr. Stone said the province is working with the federal government in trying to get more financial support for ferries.

“We do believe that there may be an opportunity to look at some of the required crewing levels that are mandated by Transport Canada,” he said. “Crewing levels are significantly higher than those in other neighbouring jurisdictions like in Washington state and the Alaska ferry system as well.”

The public is invited to comment on the fare proposal until June 30, and a final decision will be made in September.

The independent BC Ferry Commission regulates fares charged by BC Ferries.

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