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BC Libs Ignored Own Law on Ferry Price Hike: NDP
Fuel surcharge a 'backdoor' way to get prohibited fare bump, says MLA Coons.
Coons: Price rise 'a slap in face, not only to ferry users but to the minister.'
The British Columbia government passed a law in June that was to block an increase in ferry fares until Oct. 1, 2012, but is allowing a fuel surcharge to go ahead.
The government passed Bill 14 in June, making amendments to the Coastal Ferry Act to address public concerns about sharply increasing ferry fares. Among other things, the bill was to "prevent ferry operators from obtaining extraordinary price cap increases... until October 1, 2012," according to an explanatory note.
Extraordinary price cap increases, according to Section 42 of the act, are for things like "an extraordinary increase in the price of any non-controllable input such as fuel."
On Nov. 25, BC Ferry Services Inc. announced fares will rise by 2.5 per cent on Dec. 12 on major routes, thanks to a fuel surcharge. They will also introduce a 2.5 per cent fuel surcharge on the Horseshoe Bay-Langdale route.
The New Democratic Party's Gary Coons was quick to point out the increase breaks at least the spirit of the government's June law.
During debate of Bill 14, Transportation Minister Blair Lekstrom first said that it would prevent BC Ferries from requesting such an increase, but later said the intent was to make sure ferry users would know there would be no unexpected fare hikes.
In a key part of the debate, Coons asked Lekstrom what would happen in the period up to Oct. 1, 2012: "As far as no extraordinary price caps, under what circumstances would an extraordinary price cap increase be allowed?"
Lekstrom responded, "Under the bill that we're debating here before the House, under no circumstances could that take place -- any extraordinary price-cap increase."
Following ruling, says BC Ferries
"We're following the commissioner's ruling on the management of fuel deferral accounts, and that's not affected by Bill 14," said Deborah Marshall, a BC Ferry Services Inc. spokesperson.
Transportation Minister Lekstrom was unavailable for an interview with The Tyee, though he told CKNW radio he's concerned about the increase.
His ministry, however, appears to accept the increase is necessary and legal. "The fuel surcharge dates back to 2004, when the Ferry Commissioner created a fuel surcharge mechanism to address the effects of volatile fuel prices," a ministry spokesperson said in an emailed statement. "BC Ferries has rebated the fuel surcharge to passengers if and when the price of fuel drops."
Despite the arguments from BC Ferries and the government, fuel surcharges have been closely related to price caps since they were introduced.
At the end of the first performance term in 2008, the amount in the deferral account was rolled into price cap increases and passed on to passengers as higher fares.
And when The Tyee asked deputy ferry commissioner Sheldon Stoilen how price caps and fuel surcharges are linked, he said, "Yes, very definitely they are."
'It was our interpretation': Stoilen
The price of fuel is volatile and the commissioner has tried to give BC Ferries some flexibility to address the fluctuations, Stoilen said. The most recent order on fuel surcharges, dated Nov. 30, 2008, allows BC Ferries to raise or lower them within a certain range at its discretion, as long as it gives at least 15 days notice.
"All current orders of the commission are still to be applied," Stoilen said. "The administration under previous directives, orders, memoranda still apply as far as the commission is concerned."
Asked what part of the Coastal Ferry Act allows for deferral accounts, Stoilen said, "I guess I would say there's Section 42, which allows BC Ferries to apply for an increase in the price caps based on unforeseen increases in costs."
There is no other section of the act that allows for the establishment of deferral accounts or the commissioner to approve them, he acknowledged.
Rather than increase the cap, the surcharge was created, he said. "It was our interpretation of Section 42."
That is, as mentioned above, the section of the law that deals with extraordinary price cap increases, the same section Lekstrom suspended in June.
'Backdoor' Christmas fare hike: NDP's Coons
As a transportation ministry spokesperson put it, the commission had already approved the mechanism, "so this fuel surcharge announced today is not a new extraordinary price cap request under Section 42."
While the act failed to spell out the authority to establish such a mechanism, the spokesperson pointed out that it does not prohibit it either.
BC Ferries' Marshall, when asked if she could point out which section of the act allowed for the fuel deferral accounts, said, "Not specifically, but it gives (the) Commissioner wide latitude in setting price caps and this is per his orders and memoranda."
It's bizarre the government would allow a three-year-old memorandum to override its legislation from June, said the NDP's Coons. "They're ignoring the spirit of the legislation Lekstrom brought in," he said. "It's a slap in the face, not only to ferry users but to the minister himself."
It's "unbelievable" Lekstrom would allow the fare hike to be made, said Coons.
"I think this is a real slimy way to try to sneak in a fare hike ,and it's being sanctioned and approved by Lekstrom and the government," he said. "Here they are with this backdoor way of bringing in a Christmas fare hike."
[Tags: Politics.] ![]()




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Ruben
25 weeks ago
Why only major routes?
I have no problem with a fuel surcharge. No business should have to operate without the ability to charge its costs to the customer. Taxis, trucking, ferries--these all burn fossil fuels on our behalf, and all should be able to incorporate volatility into pricing.
How about a surcharge linke to the price of crude? Nice and transparent, changes at 6:00 every day, easy to see on the website....no problem.
But if it is a fuel surcharge, then it couldn't just be on major routes. Anywhere fuel is burnt, there is a fuel surcharge, minor routes included. So obviously, this is not a fuel surcharge.
Bucketbrigade
25 weeks ago
A Christmas present
David Hahn is leaving BC Ferries by year end, this has Hahn`s fingerprints all over it..
A farewell gift from hahn to BCers..
In other words David Hahn is saying to you..
Fuck off you bunch of suckers, I have $2000 a day pension for life, and you have been had people..
Thank you Gordon Campbell and all BC Liberals, see ya in Maui Gordo.
Van Isle
25 weeks ago
How come people "just don't
How come people "just don't get it"? BC Ferries is broke. They are only paying the interest (@10%)on the $1.6 billion that they owe to the German banks. David Hahn did what he was hired on to do; to run BC Ferries into the ground (pun intended). What pisses me off is the mass-media isn't reporting this. David Hahn would go on Bill Good's program and to both of them, everything is wonderful.
Bobb999
25 weeks ago
"Free" BC Ferries!
BC Ferries that run in coastal areas should be viewed as part of the highway system & be as free of tolls & fees as almost all BC highways are, & as free as are interior Ferries across the Fraser River, etc. Why should BC mainland & other non-Vancouver Island residents be forced to pay huge ferry fees in order to visit their province's capital, for instance? If almost all BC highways are without tolls or fees, so should all BC ferries.
alive
25 weeks ago
Very simple
Gaglardi set the example by upgrading highways where people voted Socred.
So, here we have Vancouver Island where people tend to vote NDP, and hence do not merit any favours.
In spite of all the jokes, I believe that anyone who can run a limonade stand could have done a better job than that Hahn character did.
Bucketbrigade
25 weeks ago
Here is another puzzler
BC Ferries promised Seaspan $20 million dolllars, this was part of Seaspan#s bid...The question is..
Why is BC Ferries borrowing money, adding $20 million to their debt when like Van Isle says, they are only paying interest on a massive debt.
BC Christy party takes credit? for BC Ferries giving away $20 million borrowed dollars when their broke?
Where was the media on that one?
http://powellriverpersuader.blogspot.com/2010/12/christy-clark-spins-and-lies-on-her.html
gsarahs
25 weeks ago
WAC's vision has been lost!
Too bad that the BC Liberals and Hahn haven't got a clue about WAC Bennett's vision about BC Ferries as being part of the highway system. All of the money spent on the German ferries - lost to the province; high volume of passengers - lost due to high ferry fares. When you make the cost of riding ferries too high as has happened, the people just won't ride them. This equals lower volume, and less money for BC Ferries and the businesses who would benefit from more people using the ferries. No vision, just greed on Hahn's part.
somethingelse
25 weeks ago
more than vision lost...
I think they have also lost their minds over there at bc ferries.
Any sane person can see that the reason they're losing money is that they're pricing themselves out of the market... Any sane business person would backtrack and start repairing the damage by lowering prices to encourage sales - instead of raising them to make up the losses...
It's beyond comprehension that they don't GET that. Do they honestly think we'll all just stand by and take it? Have they not put the pieces together to notice we take the ferry LESS every time they do this??
http://www.petitiononlinecanada.com/petition/return-bc-ferries-to-public-control/55
Bocephus
25 weeks ago
Ferry rates
This government has slapped us in the face for years, but democracy being what it is, they got re-elected. I can only hope that the NDP can get their poop together and run em out of town next time around or maybe conservative... [UNSUPPORTED ALLEGATION REMOVED. -MODERATOR.]
igbymac
25 weeks ago
There isn't oging to be any change
...until we overthrow the government through a national stampede, overwhelming all legislatures, police stations and military bases.
Take that however you like.
ReeferMadness
25 weeks ago
Perspective
After reading through the comments, I'd say a little perspective is in order...
First off, I don't think that CEO of BC Ferries is worth a million bucks a year. And I think David Hahn is what he seems to be - an American free-enterpriser who has little respect for the workers.
However, I'd also say that I wouldn't want to be the CEO of BC Ferries, even for a million bucks a year. Running a ferry operation is a tough business. It's capital intensive and most of your costs are beyond your control (price of fuel, cost of borrowing, collective agreement). Margins are razor thin. Worst of all, of the hundreds of thousands of customers and 4.5 million shareholders, it's hard to find 2 who have the same vision of what your company should be. No matter what you do, there will be plenty of people in the peanut gallery to toss cheap shots.
When economic times are tough, fare income is down. When economic times are good, income is up but the cost of fuel goes through the roof.
So, Alive, if you think it's easy, I'd say come back and talk to us after you've tried it.
Those of you who think that ferries should be free like highways should know that all routes except the main routes are subsidized, many of them heavily so.
Van Isle, please read the annual report before you spout nonsense like BC Ferries is paying 10% interest. They are paying about 6% interest on long term bonds. And they aren't paying it to German banks, unless the German banks bought their bonds. Of course, if the Liberals had left it as a crown corporation, it would have qualified for the same interest rates as the province.
somethingelse, if you think they should just lower fares, go check out the margins and figure out how much they can lower fares before going into the red. In the summer particularly, sailings are often sold out. If you lower fares, you won't be able to haul more people so the corp will just lose money.
Sorry, people, you won't get something for nothing. If you want cheaper ferry fares, you have to convince the rest of the tax payers that they should pay for you
ReeferMadness
25 weeks ago
one more thing
If you think that ferry fares are too high, you should do some comparison shopping with other parts of the world. I believe that BC Ferries compares quite favorably.
Bucketbrigade
25 weeks ago
Have another reeefer
No competition...So hard to run a ferry?????
Free ferries in the interior that run 24/7...
What a pathetic load of tripe.
Boat leave dock...boat go to other side, boat docks, cars and people get off, turn around and repeat.
Where is the brain surgery?????
finding money...10% interest going to German banks???
Man are some people thick!
Bucketbrigade
25 weeks ago
Hydro bills and etc etc
Only WEAKL people with no argument say...
If you think hydro rates are high check out this country...if you think gas is high check out that country.
sheesh...
Henry Dorsett Case
25 weeks ago
Van Isle
- How come people "just don't get it"?
I think you have it all there in your post. Our msm is bought and paid for. Canadians are intelligent people - but when intelligent people are lied to they draw the wrong conclusions. Standards in reporting is where the fight needs to begin - and it is a huge one.
Henry Dorsett Case
25 weeks ago
Van Isle
- How come people "just don't get it"?
I think you have it all there in your post. Our msm is bought and paid for. Canadians are intelligent people - but when intelligent people are lied to they draw the wrong conclusions. Standards in reporting is where the fight needs to begin - and it is a huge one.
freewilly
25 weeks ago
By and large
"I believe that BC Ferries compares quite favorably."
By and large I beleive BC Ferries is reasonable. Our American friends say our service beats washington's ferry service hands down, and I beleive them.
I still beleive the BCF should have remained a crown corporation. BC Ferries will never be profitable. Pretending its a business is silly.
Past efforts offering private passenger ferries to the islands have never worked, never will. I remember a small company offering flights on a twin beaver to the island, operated for about a year, great service,good rates, that died.
We live on the island and the trip to the lowermainland just keeps going up. Not just the ferries, but the gas in our own car.
BC ferries most unprofitable season is in the fall and winter.
If they could figure out a way to increase usage during the off seasons..., hey maybe really reduce off season rates!
The other issue is marketing. BC Ferries isnt very creative and could use some business logic. Staple a coupon for a free bowl of whitespot clam chowder, a gas coupon or maybe a lottery ticket to each ferry ticket sold.
Its really not a business but an integral part of the highway system. In hindsight a bridge network to the island would may have saved british columbians a whole whack of money.
ReeferMadness
25 weeks ago
freewilly, I agree with you.....
up to the point where you talk about marketing. You said yourself pretending it's a business is silly. If it's not a business, I guess it must be a public service. And public services shouldn't be wasting money on marketing.
As I pointed out earlier, prime time sailings are already packed. You're not going to convince someone to travel in the middle of winter or on a 9:00 sailing by offering them a bowl of clam chowder.
And the bridge? That's a pipe dream.
igbymac
25 weeks ago
ReeferMadness, I agree with you ...
up to the point where you talk about marketing. You said 'if it's not a business, I guess it must be a public service.And public services should be wasting money on advertising".
But I ask, is all advertising a waste of money? And can a public service, which natural entails a "scenic byway", not still be operated as a public service yet marketed to the tourist sector of users at the same time, provided the expense in marketing is profitable?
I think some of the ferry routes serve dual purposes, fundamentally as a transportation route but collaterally as a tourist attraction.
Granville
25 weeks ago
A penny per person per trip...
A penny per person per trip...There is an old story about a passenger asking the ferryboat captain how much it cost to cross the river. His answer was priceless:
A penny per person per trip.
A penny per person per part of per trip.
A penny per part of per person per part of per trip.
That is an old joke but my point is that no one has ever felt that ferry prices were fair anywhere, ever. They "ought to be free" they say in BC. Well yes they should. And so should food, gas and lodging. We ought to be able to trade with leaves, fallen fresh from the tree and there should be fairies at the bottom of every garden too. Not.
BC Ferries are top notch, World Class and there are none better anywhere on the planet. They are expensive, but passengers could always try rowing across the Strait of Georgia if the want to save money. There are always options, folks.
BC Ferries have made at least two bad business investments in the last 15 years. The FastCats were a disaster, and every high school student could have told the ferry corp to forget it.
The Flensburg Follies were equally disastrous because they are not economical to operate, they make too much racket and they churn up the bottom.
What BC Ferries needed 15 year ago was ten Queen-class boats to fit seamlessly into the existing fleet so the older boats could be sold off as they were retired. That was too easy for the Glen Clark guvmint so they screwed up by being too clever by half.
The Spirit-Class boats are WAY TOO BIG. there is only enough traffic to fill them in summer, ad that lasts for four months.
[ALLEGATIONS REMOVED. -MODERATOR.]. Why would a New York business executive care about operating a ferry service in British Columbia? He has, and never did have, anything but a monetary interest in his job. Sometimes it takes a little bit more that just a love of money to operate a public service, and based on the evidence, David Hahn doesn't have it.
As a matter of fact, David Hahn screwed the BC shipbuilding industry, presumably to prove a point for Gordon Campbell.
Driftwood
25 weeks ago
Prices aren't that bad
I phoned BC Ferries and told them I wanted to go from Horseshoe Bay to Nanaimo and asked about the cost. (their net site is a mess and you won't find this info there without a lot of work) They said 63 bucks and change for a regular vehicle with one passenger one way. That's not bad.
But if you want to go the Charlottes it's 155 each way from Rupert. That's expensive. 310 bucks just for the ferry when you could fly to Skidegate airport (almost the same place) from Vancouver for 500 plus tax - say 560 round trip. In which case, air travel is much cheaper to the Charlottes, but you will have to pay about 100 a day to rent a vehicle (from personal experience, and not driving a lot of miles)
Once you get there, if you are not fussy, there is reasonable accommodation to be had in Queen Charlotte City - it's not a hotel, but there are showers and accommodation which you could probably get for about 40 bucks a night. So that's 140 a day plus meals and incidentals (like the taxi and the ferry fare to the village from the airport) You're looking at roughly 200 bucks a day(plus airfare) for the 'budget' vacation. I was there three times because I like it, but damn, the expenses sure add up. Food, whether you buy it in a grocery store or eat in restaurants, is right off the map. So take at least some fruits and energy foods with you on the plane.
There is nothing exciting to do there anyway. But if you like hiking in untrammeled forests which have been there since before the white man came, there are still plenty of places which are well worth the visit. Fortunately, some people on the Charlottes have carved walking paths into age old forests which would otherwise be completely unaccessible. It's an experience.