Ferry subsidies don’t always hold a lot of water

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A line item in Budget 2014 allocates $58 million over two years to support ferry services on East Coast

By Doug Firby (Commentary)

Northumberland Ferries Ltd.

This is a tale of two coasts. On the East, an economically depressed region that continues to use federal dollars to subsidize a ferry service deemed to be essential. On the West, a province whose economy is quite healthy by comparison is ending the subsidies of its “essential” ferry service and shifting to a user-pay model.

On the East Coast, the line item had barely a mention under “infrastructure” in the federal Conservative budget released Tuesday. It reported that $58 million will be allocated over two years to support the operation of ferry services in Digby, N.S.-Saint John, New Brunswick, Wood Islands-Caribou, N.S., and Iles de la Madeleine, Quebec-Souris, Prince Edward Island.

On the West Coast, a chorus of protest is growing as business and local politicians detail the impact of the increasing ferry costs is having on their services and communities.

The difference is stark and begs the question. If it’s sauce for the goose . . .

The British Columbia government has launched a campaign to get its elaborate and expensive ferry system costs under control. The multi-year strategy which lasts until 2016 involves phasing out subsidies and cutting back services in underused areas. West Coast residents, who have become accustomed to affordable commuting, hate the change.

The Victoria Times Colonist examined the impact, and cited the results of several studies:

Nearly half of the businesses in the Coast-Chilcotin region surveyed by the Tourism Industry Association of B.C. say they expect to shut down as a direct result of changes in the ferry service;

The community of Port Hardy estimates a loss of 80 per cent of business dependent on ferry traffic;

House values on the Gulf Islands — the collection of remote getaways situated between the City of Vancouver and Vancouver Island — have crashed, with an estimated $1.6-billion loss in assessed property value since ferry rates started to go up in 2006. Housing starts in ferry dependent communities have dropped by 40 per cent in the past five years, according to a study by the Institute of Chartered Accountants.

While Vancouver’s tourism sector is growing, the islands’ tourism is withering. A 2012 exit survey of tourists leaving Vancouver Island found most of the people said they would not return citing the high cost of the ferry trip.

The extent of ferry usage in Canada may surprise landlocked Canadians, like us prairie-dwellers (although there are a few ferries scattered across the Prairie provinces). The Canadian Ferry Operators Association reports in a 2013 study that there are 284 ferries across the country, and they transport 40.7 million passengers and 1.8 million vehicles a year. Of the total, 41 ferries operate on the Atlantic side of the country, and 62 operate off the coast of B.C.

The report concludes, “Results of this survey have demonstrated that ferry operators continue to make deep contributions in driving Canada’s economy, building Canadian communities and meeting the transportation needs of Canadians every day.”

We live in an age when, thankfully, governments think twice about wasteful spending. If public money goes into subsidizing a ferry service, then it is right and reasonable to ask whether each one of those routes is in fact necessary and whether it is being operated in the most efficient manner.

The turmoil in B.C. is about those issues — someone has finally asked whether all of those ferry routes have to be underwritten by taxpayers across the province and the country. If some services must be subsidized, then let’s not assume they all do.

On the East Coast, there are important observations to be made. As much as ferries are the lifeblood of certain communities, residents must also be aware that there are limits to the provinces’ and country’s capacity to keep the ferries running. Once a service is deemed essential, costs begin to incrementally creep up. It can’t continue forever. And when governments feel pressure to cut budgets, they start asking hard questions about just how essential those services are.

If East Coasters can stay focused on the must-haves of transportation and avoid the temptation to take ferry services for granted, then they might one day avoid the trauma and turmoil that is hitting the laid-back residents at the far end of the country.

Doug Firby is Editor-in-Chief and National Affairs columnist for Troy Media. www.troymedia.com

Organizations: Tourism Industry Association of B.C., Institute of Chartered Accountants, Canadian Ferry Operators Association

Geographic location: East Coast, Vancouver Island, West Coast Digby New Brunswick Iles de la Madeleine British Columbia Canada Chilcotin Port Hardy Gulf Islands Troy

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