B.C. Premier David Eby Thursday (Nov. 28) called on the BC Ferries to trim its own sails to help keep fares from floating out of reach.
"I have got to say, we sent a lot of money to BC Ferries in exchange for a commitment for them that they would keep fares flat for British Columbians," Eby said during an appearance on Greater Victoria radio station CFAX 1070. "We need to see from them some efforts around cost control, particularly related to administration and the decisions that they are making in this cost-sensitive time for British Columbians."
Eby made these comments when asked about comments by BC Ferries' Chief Executive Officer Nicolas Jimenez in which he spoke about fare hikes in face of inflation, rising demand and plans to replace an aging fleet with new vessels.
Eby said government would work with BC Ferries to address items subject to "unavoidable" inflation like the rising costs of vessels.
"But that is not an excuse for BC Ferries not to look internally and say, 'Okay, what are we spending money on in terms of administration and overhead that is not delivering services? Where can we cut some of that to ensure that we are doing our part?' Because ensuring affordable ferries is important for business and for people on (Vancouver Island). We are going to make sure that's the case."
According to published accounts, internal forecasts from 2023 say BC Ferries would have to raise fares by about 30 per cent by 2028 to "simply keep up" and manage operating and capital costs.
"Since that time, inflation and costs have increased even faster across many aspects of our business and we are facing a growing funding gap as demands on our system increase," it reads.
Jimenez added that the cost of building vessels has gone up by 40 per cent since 2020. "Our customers have been clear in their expectations for a seamless, integrated transportation experience and the pressing need to replace aging assets requires further investment beyond what the current model allows for," he said.
Opposition parties have criticized executive compensation and other bureaucratic costs amidst staffing shortages and cancellations.
The commission overseeing the private corporation, whose single shareholder is the provincial government, announced in October 2023 that BC Ferries could raise annual fares by a maximum of 3.2 per cent for the period of 2024 through 2028.
That final price cap figure was in the words of the commission "markedly lower" than the initial proposal of 9.2 per cent floated in March 2023. That happened because the province topped up its annual financial commitment of almost $200 million by $500 million to avoid the hikes.
British Columbia Ferry Commissioner Eva Hage said at the time that the additional funding would "help to alleviate a significant amount of the pressure facing our ferry system in the next performance term, and has allowed us to cap fares at a much lower level than anticipated."
But Hage also used that occasion to warn of cost-pressures ahead such as labour supply issues, rising fuel prices and the "escalating expenses associated with maintaining an aging fleet." Hage has also stressed that BC Ferries “must demonstrate good fiscal management” and “find a solid footing in which expenses align with revenues" if fare increases are to be kept at reasonable rates through the use of taxpayers' money.
Jimenez said in March 2023 that the company needs to look at its own operations to find efficiencies.
“Continuous improvement has always been part of our ethos,” he said at the time. “I’m pleased to say that there are a number of initiatives already underway and several identified in the next four-year plan. Delivering the services our customers expect in a safe, reliable and affordable manner will remain a focus.”
When asked about Eby's comments, Jimenez said BC Ferries is looking to create "sustainable funding model" that would help ensure BC Ferries make the necessary investments to meet the "evolving" needs of B.C. communities and support the necessary infrastructure. "I’ve already spoken with (Transportation and Transit) Minister Farnworth about these challenges and we know collaboration will be needed to solve them.”
The Conservative Party of B.C. promised during the election to 'overhaul' BC Ferries through an agenda that would include building up the local ship-building industry and using technology to make the service more efficient, even automate it in parts.
Conservative MLA Harman Bhangu (Langley-Abbotsford), transportation critic, said on social media that families are already struggling to afford vacations in commenting on the potential of significant hikes. "A 30 (per cent) BC Ferries fare hike will hurt working (and) middle-class families and harm local tourism. We must protect affordable access to (Vancouver) Island and support B.C.’s economy."
