Under the proposed increases, ferry fares might rise steadily over the next four years
The B.C. Ferry Commissioner has set the preliminary cap on fare increases at an average of 1.9 per cent a year from 2016 to 2020.
The caps represent the maximum allowable increase in average fares on all major, minor and northern routes.
“It’s an average that we track,” commissioner Gord Macatee said Wednesday. “The company has freedom to adjust fares up and down as long as it comes out there.”
The peak season fare for a car and driver on one of the main routes is $69.50. That is slated to rise 3.9 per cent on April 1 to about $72.20, as previously announced.
Under the proposed caps, that fare will rise steadily over the next four years to approximately $77.80 by 2019.
Macatee, who will make a final decision in September, said the preliminary caps assume fuel prices will rise from where they are now, but remain lower than they have in the recent past.
“Trying to predict fuel pricing over the next five days is daunting,” he said. “Our challenge is to do it for the next five years.”
The caps also assume that ridership will increase by two per cent toward the end of the four years due to the improving U.S. economy, stronger tourism numbers and lower gas prices, Macatee said.
He credited the work that the government and B.C. Ferries have done to control costs, thus allowing him to set price caps at or below the rate of inflation.
Macatee said the quasi-private firm has cut overtime, trimmed administrative costs by $5 million since 2009, and reduced executive pay by $1.2 million a year.
In addition, food sales and B.C. Ferries Vacations have improved the company’s bottom line, while helping to keep fares down, Macatee said.
“I think that’s the most pleasing part of the report other than the fares being capped at or below inflation,” B.C. Ferries president Mike Corrigan said. “He’s taken a number of things head on and said that, at the end of the day, what B.C. Ferries has been saying all along is, in fact, reality.
“For me, it’s third-party validation and endorsement from an independent body, so it doesn’t get much better than that.”
Corrigan said the fare caps will be a “challenge” given rising costs and Macatee’s call for a further $27.6 million in efficiencies over four years. But he said B.C. Ferries is unlikely to press for higher caps. “I don’t foresee that happening from what I’ve seen so far,” he said. “We all have a mutual goal here to get rates at or below inflation, and we’ve been able to do that.”
Jim Abram, chairman of the Strathcona Regional District, said Macatee’s decision offers little relief to coastal communities that want fare reductions.
“We’re sitting at a place where the ferry fares are unaffordable — totally unaffordable — for pretty much everybody,” he said. “We’re going to get hit with 3.9 per cent on April 1 and, on top of that, a year later we’re going to get 1.9 per cent.”
NDP transportation critic Claire Trevena said more government investment in the ferry system would eliminate the need for continual fare increases.
“I’m very concerned that this won’t help ridership; it will continue to drive ridership down,” she said.
But Transportation Minister Todd Stone said the government is four years ahead of schedule bringing price caps in line with inflation.
“I’m optimistic that we’ve turned the corner,” he said.
Stone said the government is not planning any further service reductions and will maintain its $180-million annual subsidy to B.C. Ferries.