In an attempt to save an estimated $1.45 million over two years, B.C. Ferries recently announced the closing of its summer-only Route 40 ferry run between Bella Coola and Port Hardy.

But the Tourism Industry Association of B.C. (TIABC) says the route is actually a money-maker for the province, given the provincial taxes it generates. And it estimates that up to a quarter of the tourism operations that serve the "circle route" involving Route 40 could go out of business without the ferry.

In a report published this week, TIABC argues that the route, which offers spectacular views of the B.C. coast and the open Pacific, is enhanced by many tourism and other businesses, both on Vancouver Island and in the Cariboo Chilcotin. Many tourists travel the "circle route" from Vancouver or Victoria to the Bella Coola Valley, and then return through either Vancouver Island or the Cariboo Chilcotin.

On Highway 20 between Bella Coola and Williams Lake, the report said, "it is estimated that an average of 35% of their visitation and revenues are derived directly from Route 40 passenger spending.

"The North Island region ... is the second most reliant on Route 40 for tourism business revenue, with an average of 31% of revenues attributed to Discovery Coast ferry passenger spending."

The report notes that half the businesses had booked reservations before B.C. Ferries announced the end of the route in November.

"The timing of the decision was not well thought through," Ian Robertson, Executive Director of TIABC, told The Tyee in an interview. "Overseas operators have been selling on the route since May and June last year."

He noted that the B.C. Ferries' website statement about the route was "unclear," since it doesn't explicitly say the route is cancelled. "We're calling on the Ministry of Transport to hit the pause button until at least 2015."

Robertson also told The Tyee that northern Vancouver Island and the Cariboo Chilcotin have seen reductions in the resource sector, while tourism has been on the rebound with support from the provincial government. "The Ministry of Transport didn't think about this," Robertson said.

The TIABC report surveyed 62 tourism operators -- 22 on northern Vancouver Island, 25 in Cariboo-Chilcotin, and 15 others. It found that 47 per cent of those surveyed between Bella Coola and Williams Lake said they were "somewhat" or "highly" likely to close their businesses. On the North Island, 11 per cent said the same.

The report calculates that Route 40 passenger spending generates $5.6 million in provincial tourism revenue and 110 full-year equivalent jobs. It also generates $783,000 in provincial tax revenues, and says, "When the total provincial tax revenues from Route 40 passenger spending are taken into consideration, the [B.C. Ferries] annual operating deficit becomes a $58,000 surplus."

Robertson told The Tyee that the report would be posted on the TIABC website later this week.

Crawford Kilian is a contributing editor of The Tyee.