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Ferries, province sail into rough waters

The problems and challenges facing BC Ferries go much deeper than figuring out why some of its fleet keeps slamming into docks at high speed.

The problems and challenges facing BC Ferries go much deeper than figuring out why some of its fleet keeps slamming into docks at high speed.

The recent crash of the Coastal Inspiration into the Duke Point ferry berth has refocused attention on safety issues, but the most vexing problems are more about finances.

The costs associated with running the ferry system keep increasing but the number of people using it keeps going down.

Something has to give here.

BC Ferries keeps raising fares, but admits it's gone about as far as it can go with that option.

At some point, high fares discourage casual travellers from using the service, and the company may have already reached that point.

The company is embarking on a cost-cutting exercise, but the lion's share of its expenses is out of its control.

For example, fuel costs have gone from $50 million a year in 2003 to about $120 million this year. An extra $1 million a year in additional operating costs is courtesy of Transport Canada's staffing rules on vessels.

Labour costs have gone from just under $200 million in 2003 to about $266 million this year.

And interest and amortization costs (largely resulting from building badly needed new vessels and upgrading terminals) have skyrocketed, going from $68 million eight years ago to almost $200 million this year.

You can talk all you want about cutting executive pay levels at the company, but that's not going to make even a dent in those expenses.

All told, costs have gone up about $300 million in the last eight years.

Another problem that isn't going away is the delicate issue of just what kind of services BC Ferries should provide.

Only its major routes linking Tsawwassen to Victoria and Horseshoe Bay to Nanaimo turn a profit while the other runs lose money to various degrees.

BC Ferries is contractually obligated (with the B.C. government) to provide a certain number of sailings on various routes. But the situation on some of them has become ridiculous.

For example, on the lightly used Route 26 in the Queen Charlottes, the local ferry made 259 trips last year in which there were absolutely no passengers on board at all.

Meanwhile, the ferry carried a crew of four and, of course, consumed expensive fuel.

All told, the minor routes lost more than $67 million last year, an increase of more than $3 million the year before.

This raises some fundamental questions.

For example, does there really need to be 16 trips a day between Nanaimo and Gabriola Island?

Does there need to be almost 30 trips a day from Salt Spring Island to various locations?

For that matter, does Salt Spring Island really need three ferry terminals?

Now, the very idea of chopping even one money-losing sailing on these routes does, of course, elicit howls of rage from those who live on those islands.

But either BC Ferries has to reduce service on those money-losing routes, or the provincial government must increase its annual subsidy to the company.

Provincial taxpayers from around the province give the company more than $170 million a year to operate, but clearly it's not enough to make ends meet.

It's a tough spot for the company - and the government - to be in, but as I say, something has to give here.

Keith Baldrey is chief political reporter for Global BC.

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