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.