Establishment of new price caps for BC Ferries’ rates are on the horizon and it’s predicted they will jump from the current ceiling.
Colin Palmer, Powell River Regional District director who has worked extensively on the BC Ferries file with the Coastal Regional District Chairs Group, said Gordon Macatee, the ferry commissioner, has been working with the price caps that his predecessor, Martin Crilly, established while he was ferry commissioner. This April, a 3.9 per cent increase in fares will once again be assessed, and Macatee’s assessment will come into play the following year.
“Macatee is preparing the next four-year performance term,” Palmer said. “We were interested what our input could be. In our meeting we told him that traffic is down to 1991 levels, ferry revenues must have gone down, the cuts have caused people to travel even less, and we asked his role.
“He explained to us his legal role is not to worry about any communities but to set price caps for four years to keep BC Ferries financially stable.”
Palmer said Macatee has to predict how much money BC Ferries is going to make; what the expenditures will be, including payments on the debts, he has to figure out everything that is going on and come in with the price caps.
“We don’t know what they are going to be at this stage but he can only deal with the math,” Palmer said. “I would think he’s going to come in around 10 per cent or more.
“That will prove to everybody on the coast and in the province that BC Ferries is in deep trouble. He has no choice. He has to keep it viable. That’s his job.”
Palmer said once Macatee sets the price caps in March, and the minister and BC Ferries sees what they are, those two have to sign a contract.
“BC Ferries is going to say what are we supposed to do with a high fare increase? People are going to travel even less,” Palmer said. “Even BC Ferries admits that if you put the fares up, traffic goes down.
“If you are also paying the debt in the fares, the sky’s the limit on what the price caps are going to be. So the minister has to say to himself, how is he going to make this whole system work? Is he going to put more money in? Is he going to make more cuts? What is he going to do?”
Palmer said right now, the minister has a bunch of ships running around with not enough people in them. The critical point is that Macatee has to make BC Ferries financially stable and come up with a fare structure that keeps them afloat for the next four years.
“In a perverse way, I’m hoping it will be high and we can show everybody how bad it is,” Palmer said. “If it’s low, it’s going to be a surprise for us.”
Palmer said Macatee has commissioned five studies on BC Ferries that will assist his computations for price caps. One of them is general administration, which includes a study of management.
“It might help clear the air with what is going on with management and salaries,” Palmer said.
The commissioner is scheduled to make his price cap announcement at the end of March. Palmer said the commissioner told the regional district representatives that there is a six-month period of input from government, BC Ferries and anyone else who wants to weigh in.
“He will take that input and in September, he will announce his decision for the price caps,” Palmer said. “In that six-month period he is looking for factual numbers to tell him if his cap is too low or high.”
Palmer said the regional district representatives have a meeting scheduled with the minister to outline the results of his cuts and what is happening in the communities, and also, his dismissal of the Union of BC Municipalities’ report on BC Ferries that concluded the reduction of ridership in the ferry fleet is having a financial effect on the whole province.
