VICTORIA – Out of every dollar British Columbia Ferry Services Inc. earns from its operations, 87 cents now goes to paying interest on the government-owned company's debt.
That's one of the conclusions Nelle Maxey reached after analyzing B.C. Ferries' most recent financial disclosures. “That's pretty darn scary,” said Maxey, who has kept a close watch on the company's finances for several years. “I would hate it if my personal finances looked like that.”
Since the B.C. government restructured B.C. Ferries in 2003 the company has taken on some $1.4 billion in debt, most of it to buy new ships. In the fiscal year that ended on March 31, 2009, the company paid $50.1 million in interest. That's almost as much as the $57.7 million it earned from its operations, Maxey said.
“That's an awful burden to be carrying,” she said. And with some of the debt subject to floating interest rates, she added, the payments will go up as borrowing rates rise.
The crunch comes as B.C. Ferries traffic drops and there are signs an increasing number of passengers are fed up with rising fares.
Some 40 percent of passengers in 2008 were either dissatisfied or very dissatisfied with the value of money for fares, according to B.C. Ferries customer satisfaction survey released June 17 (see page 34). That's up from 28 percent of passengers who felt that way in 2005.
Similarly, while 46 percent were satisfied or very satisfied with the value they got for their fares in 2005, the number who felt that way dropped to 36 percent in 2008.
The surveys found, as noted in the company's press release, that passengers gave the company high marks in several areas, and 86 percent were satisfied with their overall experience.
Maxey said the company should have been taking the possibility of dropping traffic into account, especially with fares steadily increasing since 2003. “What will they do if traffic keeps going down and costs keep going up?” she asked. “Everything looks bad. Nothing looks good.”
Questions to B.C. Ferries were not answered by publishing time.
Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Reach him here.
Campbell........
Couldn`t run a lemonade stand......
I said it before and I will say it again,the word is out,avoid Vancouver island,RVs and boaters are going elsewhere,600.00$ round trip for your boat n trailer have chased tourists away,who the hell would go to the island towing their Carbon taxed boats and trailers for a long weekend with that added expense?
Las Vegas/Reno,well,do they charge an arm and a leg to get there? no,it`s almost free to get there,.......
BC ferries,2.00$ for your ten speed bike,peak summer fares,10.00$ for muffin and a lounge seat, 1.00$ for every 5 minutes of waiting to pick someone up at the ferry terminal(LOL)-So people,myself included drive in circles to avoid paying the rip-off/ 17.50$ for a reservation for a empty ferry(LOL),that game is over.....
What next,charging to take a number 1 or 2.......I`ll hang my butt over the railing first.
This just can't be true.
This just can't be true. Every time I hear David Hahn on the Bill Good program all those call-ins just singing praises on how wonderful the services are since the privatization/transformation in the spring of '03. Oh, I get it now, (silly me)those call-ins must be from the BC Ferries Public Relations Department who flood the CKNW phone lines when Mr. Hahn is on. Of course the PR people know that Bill won't ask any hard questions either.
hang on guys
happy will be right over to defend the tubs and their commodore - be patient!
Interesting Take...
At least BC Ferry Services has had a positive cash-flow compared to the old crown corp. model:
From BC Stats, May 2004:
Much of the fleet was already nearing the end of its useful life. BC Ferries own infrastructure deficit.
http://www.bcstats.gov.bc.ca/releases/info2004/in0418.pdf
And that last observation is testamount that BC Ferries remains out of meddling political hands.
Debt
Once again notice is served that BC ferries is not serving the Island but its political Masters. At this rate BC ferries will be ripe to be sold off in 3 years. We won't be able to afford it as the BC ferries will be bankrupt.
I guess so, Luke...
If you think that 87 cents on every dollar paying just interest is a good thing. Imagine if your credit cards were in that kind of shape. And heaven help them when interest rates go up.
I thought Mr. Hahn was being paid all those big bucks to turn the Corp. into a money-making business? I didn't know his job was to build a bunch of new ferries (out of country), turn a freakin' ferry ride into an "experience" and saddle us with the debt forever and ever. I also didn't realize that his job was to price his product right out of the market.
Amazing, isn't it? BC Ferries survives 50 years through countless governments and the Campbell Liberals kill the whole thing in just 8 years.
Guess we'll be going back to the old Blackballs soon.
What's that old gambling con game,
where they hide one pea under one of three walnut half-shells, and then move the shells around really fast and ask you to bet where the pea is? I was just wondering if this was not the inspiration for bc "liberal" "modern" accounting practises, you just keep moving debt from one walnut shell crown corporation (they're all hollowed out now) to the other to hide the massive growing debt you've saddled generations of british columbians with. I believe walnut shell montee is a popular game at fraser institute coffeee breaks -could this be the explanation as to why the bc liberals are such dismal economic managers??
The local rag today tells us
The local rag today tells us that customer satisfaction at BC Ferries is absolutly great as those happy folks shell out large amounts to get to the other part of Beutiful BC, best place on Earth. Somebody is twisting the truth and the BC media lady might be the culprit. I see as well, that BC Ferries was ordered to rehire the Captain fired when he raised safety issues. Good old BC Ferries is appealing the worksafe decision. Anyone seen the Sonia lately?
Tough Business
BC Ferries is in a tough business. Some of you might remember that the NDP bailed it out to the tune of $1 billion before the Liberals took over.
When times are good, the price of fuel goes through the roof. When times are bad, nobody has a lot of money to travel. Fares are regulated by the commissioner, although that's a bit of a shell game. At any rate, it's tough to carve a business model out of the reality they face.
They're between a rock and a hard place now. It looks like it was a bad move to buy all those new ferries but not many people predicted the downturn. If interest rates spike, it's going to be rough. The province is going to be hard pressed to bail them out again.
I know some of you have political axes to grind but my heart goes out to the people who work there - management and union alike. They have a tough road ahead.
You don`t know what your talking about Reefer.
It is called charging fees to the point of diminshing returns!
Campbell claims the 500 million$ over budget convention center creates economic activity even if it loses money,well........
How nuch economic activity does Vancouver island create? 100 billion per year,at least....
Who wants to pay 600.00$ for a round trip in a RV towing a boat,the people are going elsewhere,thats what makes Vegas and McDonalds money..........
The sea to sky highway upgrade is a 3.6 billion dollar deal,900 million for construction and 100 million dollars per year,every year for 25 years for maintenance.......
Any tolls? NO......Whistler can`t compare to the economic activity of Vancouver island,how about commuters and skiers pay that 3.6 billion dollar bill?.....
Who is going to pay 100.00$ eachway to go there?
So don`t even talk about a rock and a hard place,tolls for south of fraser,sick ferry fares for islanders and tourists but.....
A free road for Whistlerites,free new floating bridge for Kelownaites......
Get a life Reefer
you don't say
public assets------->
bankrupt Right------>
discombobulated Left----->
neo-lib gov't---->
neo-lib management--->
massive public debt-->
massive public hand wringing->
privatization.
Anyone ever wonder why the
Anyone ever wonder why the Interior ferries don't sell tickets so folks get to ride for free? The folks on vancouver island pay big bucks or stay home. Their supplies come mostly from the mainland so the costs keep going higher. People bitch when the letter and parcel mail rates go up. Ever wonder how the stuff gets to the island? Ever wonder why the St.Gordo Liberals don't do well in Island elections?