Consultation and Engagement Overview
1. Immediate Challenge:
Despite a significant recent increase in provincial government contributions to ferry operations, there is a need to find $30 million in savings to 2016. $4 million has been found through service reductions on the major routes between Vancouver Island and the Lower Mainland. The Ministry of Transportation and Infrastructure, working with BC Ferries, has identified considerations to achieve $26 million in savings to 2016. The first part of this consultation and engagement seeks feedback on the considerations.
2. A Vision for the Future:
Cost pressures continue to affect all of BC Ferries' operations. The Ministry of Transportation and Infrastructure has also outlined potential strategies - some combination of which could help achieve the long-term vision of connecting coastal communities in an affordable, efficient and sustainable manner. The second part of this consultation and engagement invites feedback on what strategies should be pursued to achieve the vision.
The BC Ferry Commissioner concluded in his January 2012 report that the government, BC Ferries and ferry users will all need to contribute towards ensuring the sustainability of the ferry system.
In response to the BC Ferry Commissioner’s report:
- The Province is contributing an additional $79.5 million on behalf of taxpayers to 2016
- BC Ferries has committed to achieve $15 million in efficiency improvements
- Ferry users are being asked to contribute $30 million through service reductions
- - $4 million has been found through service reductions on the major routes between Vancouver Island and the Lower Mainland
- - There is a need to find $26 million in savings to 2016
The Ministry of Transportation and Infrastructure and BC Ferries have identified the following considerations to achieve $26 million in savings to 2016:
- Significant Annual Shortfalls: Consider service reductions on routes that experience significant annual financial shortfalls before taxpayer contributions
- Low Annual Utilization: Consider service reductions on routes that experience low annual utilization (such as less than 55% total utilization per year)
- Low Round-Trip Utilization: Consider service reductions on routes that experience low round-trip utilization (such as round trip sailings that have less than 20% utilization)
- Basic Levels of Ferry Service: Basic levels of service should be considered, i.e., for the majority of users, ferry service would be provided to and from work or school
- Routes Requiring Vessel Replacement: When considering service reductions, take into account routes that require imminent vessel replacements, including alternatives such as route reconfiguration
- Complexity of Multiple-Stop Routes: When considering service reductions, take into account the complexity of routes with multiple ports and those that provide connections to other areas
These considerations are not mutually exclusive. The Ministry of Transportation and Infrastructure and BC Ferries will need to look at a combination of these considerations to find $26 million in savings, but are interested in your feedback on the prioritization of these considerations.
A Vision for the Future
The BC Ferry Commissioner has estimated that with the current trends of labour and fuel cost increases, and anticipating the need to replace aging ferry infrastructure, funding shortfalls from 2016 to 2020 could average $56 million per year, while from 2020 to 2024, they could continue at $85 million per year.
The Province is committed to a long-term vision to connect coastal communities in an affordable, efficient and sustainable manner. It is clear that BC Ferries and BC taxpayers need a long-term plan to fund or avoid the predicted shortfalls.
The BC Ferry Commissioner recommended that a vision should be based on a long-term forecast of demand and should consider the potential use of alternative service providers, fuel alternatives and integration with other transportation systems. He also recommended a standardization of vessels, making it easier to switch vessels between routes and among which crews could be easily switched without the need for additional training.
There are many other potential innovations. For example, a change to different types of vessels (i.e., cable ferries, passenger-only ferries, barges that carry vehicles, etc.), a change in the way BC Ferries manages traffic and books reservations, or servicing a small number of routes more efficiently with bridges.*
One long-term goal is to bring ferry fare increases in line with the increase in the cost of living (as defined by the Consumer Price Index or CPI). While fare increases will continue to be one method of generating additional revenue, ferry users and coastal communities might choose to contribute through community contributions (i.e., a fee, charge or tax) sufficient to cover some or all of the increasing ferry service costs. If a property tax were to be used, it could be levied equally among all communities or could vary by area. Likewise, a fuel tax could be introduced to cover some of the shortfall and be levied equally among all coastal regional districts or varied by area.
For more information, please refer to the Discussion Guide.
*Footnote: Islands Trust has expressed their opposition to bridges, including in their Policy Statement: "It is Trust Council's policy that no island in the Trust Area should be connected to Vancouver Island, the mainland or another island by a bridge or tunnel, notwithstanding the existing bridge between North and South Pender Islands." (Policy 5.3.2)