by Times Colonist Once upon a time (April 1, 2003, to be precise), the magic wand of government was waved over BC’s ferry system, turning it from a Crown corporation into a private entity, freeing it from the evil clutches of political interference and enabling it to operate as a business.
Like all magic tricks, this one has proved to be more illusion than substance, more myth than reality. Let’s stop pretending that BC Ferries is anything other than a public utility charged with providing an essential service.
Transportation Minister Todd Stone said last week that BC Ferries should aim for internal efficiencies, such as reducing the number of managers and cutting back on free rides for employees, before it asks for more government subsidies. In November, he vetoed the corporation’s proposed cost-saving changes to routes between Nanaimo and the mainland. There’s a strong hint of tighter purse strings in Premier Christy Clark’s recent observation that ferry fares are “about as high as they can get without really impacting ridership.”
Stone says he doesn’t have the authority to order ferries’ CEO Mike Corrigan to reduce management levels or to do away with free passes for employees. Despite all admonitions to ignore the man standing behind the curtain pulling levers, no one really believes that BC Ferries is an independent, private corporation.
A private corporation makes its plans according to established business practices, one of which is to ensure that expenses don’t exceed revenues. If a private business is losing money on a particular service, it eliminates that service or raises prices to prevent losses.
BC Ferries can do neither. It is required to provide a certain level of service. It relies on the provincial annual subsidy of $170 million to make up the difference between revenues and expenses, and the government says yea or nay to fare hikes and service cuts. Either one would be unpopular, especially with vote-sensitive politicians already feeling the wrath from areas where services have been reduced.
Private businesses operate where there is an opportunity for profit, and while the major routes between Vancouver Island and the mainland are profitable, the smaller routes cost more to operate than they bring in. Privatization in whatever form it takes will not change that reality.
Before “privatization,” the ferries corporation was tossed around on every changing political tide.
“BC Ferries is entangled in a web of formal and informal accountability to various government agencies, ministry personnel and politicians that it is powerless to change,” said financial consultant Fred Wright in a 2001 study of the ferry system. Political interference “pervades every important decision whether it involves service levels, tariffs, labour negotiations or the purchase of new vessels.”
The 2003 restructuring might have reduced the extent of political interference, but it didn’t eliminate it. Calling BC Ferries a private, independent corporation doesn’t make it so. A CEO is accountable to a corporation’s shareholders, and BC Ferries has only one shareholder, the government of BC, which, as recent events prove, does not hesitate to call the shots.
The ferry corporation provides excellent service, but Stone is not out of line in requesting that the corporation operate as efficiently as possible. However, when the cuts go too deep, it’s the ferry-dependent communities that will bleed.
BC Ferries should be recognized for what it is—an essential part of the highway system, not a profit-making venture.
Reprinted with permission from Times Colonist.
