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Province bails out B.C. Ferries to stave off coastal ferry cuts

VICTORIA — B.C.’s transportation minister abruptly reversed course Thursday and found the necessary funding to prevent cuts to ferry sailings on the coast.

Claire Trevena said Thursday that government will pay for sailings that were slated to be eliminated on 11 minor routes, after a standoff in recent weeks between the province and B.C. Ferries over funding.

“At the moment it’s making sure B.C. Ferries is not making any cuts,” Trevena said. “At a time we’re starting to recover the economy, it’s not a smart time to make cuts.”

The province currently provides B.C. Ferries almost $200 million annually to help run the coastal ferry system, with ticket fares, retail sales and a small subsidy from Ottawa making up the rest of the corporation’s revenue.

The new funding, around $180,000, will temporarily stave off the cuts to 11 coastal routes until September. After that, Trevena said the hope is B.C. Ferries’ finances will have stabilized and it can resume operations without the extra money.

The money doesn’t help B.C. Ferries cover its larger financial losses accumulated during the COVID-19 pandemic, which amount to several million dollars and worsen daily. Those continue to be a point of negotiation between the government and the quasi-private ferry corporation, which operates as a private financial entity but only has one shareholder, the province.

“I’m very pleased there are going to be no reductions of services as we move into restart and people in coastal communities are going to be able to continue relying on the ferry service they need as they and their communities and businesses start to try and climb out of the problems COVID has been leaving for everyone,” said Trevena.

B.C. Ferries had said the cuts were necessary because the COVID-19 pandemic has reduced ridership by as much as 80 per cent and caused the ferry corp. to lose almost $1 million per day.

Eliminating some routes, along with other internal cost-cutting measures, was part of a plan to stem losses within the corporation until ridership recovered.

The targeted sailings were on routes to Salt Spring, Powell River, Texada, Gabriola, Denman, Hornby, Quadra Island, Cortes, Saltery Bay and Haida Gwaii.

The government and B.C. Ferries had been engaged on protracted talks over funding since the ferry corporation served 90-day notice in March that it intended to eliminate the sailings to save money. The notice expired Tuesday without a government commitment, and so B.C. Ferries began cutting some routes.

Trevena responded earlier this week by calling the cuts “premature” while negotiations were continuing. Half of the ferry advisory committee for Denman and Hornby islands resigned in protest over the cuts.

“We’ve paid $180,000 but we are still at the table because we’ve got to make sure we have a robust system for people,” said Trevena.

The timing of the bailout comes just before a planned launch next week by the B.C. government to open up domestic and interprovincial tourism. The government will be encouraging British Columbians to travel the province in a bid to spur economy activity during the summer. The province would have faced the prospect of encouraging more travel, at a time B.C. Ferries was reducing key travel routes to tourism-dependent communities.

The bailout also came one day after Premier John Horgan faced questions about why his NDP government would allow the same sailings to be cut that his party once decried as vital for coastal communities when they were eliminated by the previous Liberal government in 2014.

“We do take this very seriously,” Horgan said Wednesday. “In all honesty, as an islander, I understand intimately the challenges in coastal communities. We were right in 2014, and we’re right today. We’re working collaboratively with B.C. Ferries to find a way forward.”

Horgan had been trying to convince the federal government to provide operating funding to B.C. Ferries as part of its COVID-19 economic recovery programs. But he admitted it was unlikely to happen.

“I have to confess, there hasn’t been a particularly sympathetic ear because B.C. is the only province that has a significant ferry complement,” he said.

The sailings that were due to be cut were some of the ones the previous Liberal government eliminated in 2014, when it removed eight per cent of total coastal sailings on minor routes out of the contract between B.C. Ferries and the government. At the time, it cited declining ridership and financial pressures within the corp.

The cuts were unpopular in coastal communities and deemed “absolutely outrageous” by Trevena, then-Opposition NDP transportation critic. She likened it to government closing highways.

“This is the destruction of our coastal communities and the destruction of our coastal economy,” she said at the time. Stories emerged of coastal island residents missing medical appointments and students unable to attend extracurricular activities due to key sailings eliminated at the beginning and end of the day.

B.C. Ferries restored some of the sailings in 2018 when its finances recovered.

“The sailings that were the biggest priority, B.C. Ferries added back,” said Kim Barton-Bridges, chairwoman of the Northern Sunshine Coast Ferry Advisory Committee. “They were the highest priority at the time.”

But there was a catch nobody noticed at the time, said Barton-Bridges. The government didn’t add those sailings back into the contract that governs base service levels. That meant they were considered “discretionary” extras above the minimum service levels, she said.

Later in 2018, Trevena also restored additional sailings to coastal communities that had been cut in 2014 but weren’t deemed as high-priority. This time, though, the province did amend the contract to include those sailings into base service levels.

As a result, two years later, the only sailings B.C. Ferries could eliminate to save money without government permission during the pandemic were the high-priority “discretionary” ones that it had voluntarily restored in 2018 but were not included in the contract.

Source: Vancouver Sun

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