Provincial Transportation Minister Blair Lekstrom has quietly rejected BC Ferries' proposal to cut up to 400 round-trip sailings from its schedule to cope with growing losses, Business in Vancouver has learned.
Ferries spokeswoman Deborah Marshall confirmed the province rejected the proposal late last month, but didn't provide details as to why it was rejected.
"They are awaiting the commissioner's review," said Marshall, referring to the BC Ferry Commission's yet-to-be-seen review of the organization. "But [it's] probably best if you wanted to talk to them about their decision."
Despite BC Ferries' confirmation that its proposal to cut sailings had been turned down, a Ministry of Transportation spokesperson maintained that no decision had been made and that the minister was waiting for the commissioner's review, due later this month, before it made any decisions about service cuts.
"No decision will be made on service reductions until the province has had a chance to review these recommendations," the spokesperson said.
But, through a freedom of information request, BIV has obtained a copy of former BC Ferries president and CEO David Hahn's confidential proposal to the minister outlining what sailings were to be cut, when and how much the corporation expected to save.
According to a plan dated September 22, 2011, the corporation proposed "immediately" cutting 94 round trips over the next nine months on major routes between Vancouver and Victoria, and Nanaimo and Vancouver.
BC Ferries hoped the initial cuts, to begin October 1, 2011, would save the organization $717,000.
"If ridership worsens, we would then pursue further reductions," Hahn wrote to Lekstrom.
In a second proposal, BC Ferries tabled a plan to cut 387 round trips for a total savings of $2.7 million.
The sailing reductions were part of a strategy to help the company stem its losses amid multi-decade low passenger and vehicle counts, but business owners complained that the cuts would erode their ability to ship goods between the mainland and Vancouver Island. (See "New wave of cost-cutting measures aims to bail out embattled BC Ferries" – issue 1154; December 6-12, 2011.)
Hahn announced the proposal last August and at the time was reported to have said the cuts would affect only Friday and Sunday extra sailings during the off-season.
However, the application revealed the cuts would extend to August 31, 2012, well into the busy summer season.
The plan also proposed fewer sailings on Thursdays and Saturdays and a reduction in the number of extra round trips planned for Thanksgiving, Christmas holidays and spring break.
Hahn's plan would have also seen "summer season reductions during weekdays" on the Victoria-to-Vancouver route that would result in "minor overloads" on morning runs, as well as "reductions to Monday to Friday service by removing two round trips daily" on the Nanaimo-to-Vancouver route.
Marshall said Hahn had only "indicated" that, in large measure, the reductions wouldn't affect the summer schedule.
"He had also indicated that if BC Ferries did reduce its service and the traffic volumes picked up, that those sailing reductions would be put back into the schedule if traffic warranted," said Marshall.
NDP transportation critic Gary Coons said the document reveals the "real story" behind BC Ferries' proposal.
"There has always been a real disconnect with what BC Ferries has said then done over the last six to seven years," Coons wrote in an email. "The whole ferry system, since the BC Liberals initiated their failed privatization model, has been in disarray. We need leadership and decisive action from this government to try to save what we have left of a marine highway." •
Ferry shipping costs eroding business profits
In December, Business in Vancouver reported that the proposed reduction on major ferry routes could have a significant impact on businesses that rely on regular sailings to and from Vancouver Island.
"I'm extremely concerned … as soon as I heard about that I was not happy," said Al Hasham, president and CEO of Maximum Express Courier and Freight. "As a business person … it will just hurt the economy."
Hasham's Victoria-based business, which employs 32 people, uses BC Ferries every day to transport goods between the Island and the mainland.
In recent years, however, rising fare costs have begun to erode his bottom line. Fares for a passenger vehicle and one occupant have climbed 37% in the last decade.
"We have to keep raising our prices, and the consumer at the end keeps on absorbing it … but what are we supposed to do? We can't avoid sending a truck over, hence we have to keep paying that." •
