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Size of BC Ferries subsidy of interest to former drop trailer competitor

A senior executive with a company that used to compete with BC Ferries to ship drop trailers said he was surprised to see how large a government subsidy the publicly owned company has on the Duke Point-Tsawassen route.

There had always been suspicion BC Ferries was using government money to compete with private companies, but "Not like was announced yesterday," said Joel Loreth, a vice president of 3PLogix Group of Companies, which owns Van Isle Barge Services Ltd..

In 2010, while the BC Ferry Commissioner considered a complaint from VIBS and Seaspan Ferries Corporation, Loreth told The Tyee his company didn't think BC Ferries was charging enough for drop trailer service to cover long-term costs to replace things like terminals, ramps and its head office.

"We asked to see the numbers and we were turned down," he said at the time. "We don't think they're even close."

Now documents released by the British Columbia government as part of a consultation process on cutting service levels show the Duke Point-Tsawassen route, which carries 42 percent of the commercial traffic between Vancouver Island and the mainland, requires a $29.86 million annual subsidy to break even.

The other major routes between Vancouver Island and the mainland are the only two in the BC Ferries system that bring in more money than they cost to run.

Loreth this week said his company sold its barging business to Seaspan in December, 2011, partly because of what they saw as unfair competition from BC Ferries. "It wasn't something we had bargained for," he said. "We were more than happy to sell it because we thought it was a tough market to continue."

Representatives of Seaspan did not return calls by publication time.

In February, 2011, Sespan welcomed the commissioner's ruling that BC Ferries was subsidizing the drop trailer business, but criticized the review process for not being open and transparent enough, as well as the ongoing secrecy around BC Ferries' financial information.

The most recent related notice on the commissioner's website, dated Oct. 31, 2011, said Seaspan was appealing the order on various grounds.

Throughout the dispute, BC Ferries argued that the pricing of its drop trailer service was fair.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Find him on Twitter or reach him here.

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