At a gathering of hundreds of delegates representing ferry systems from all over the world, BC Ferries CEO Mike Corrigan stated that the event offered an opportunity to promote the industry and enhance safety, and also boasted the offering of more than 130 vacation packages by his company. The third session of the conference featured BC Ferries Commissioner Gord Macatee alongside representatives from ferries organizations in Croatia, Denmark, Norway and Washington State, discussing the tricky business of governing and subsidizing ferries systems.
One point the panelists seemed to agree on is that the businesses of politics and operating ferries need to be kept at a healthy distance from one another.
“Islanders tend to have very strong opinions of what they need,” said Alan Klanak, CEO of Croatia’s ferry operator, Jadrolinija. “Politicians should stick to politics and stay out of operations.”
John Steen-Mikkelsen, the CEO of the Danish ferry operator Danske Færger, explained that for the eight ferry routes his organization operates (two of which are international, travelling to Sweden and Germany), some of the companies that run the route are private and others are partially state-owned.
“Having come from a system where the government is a full owner of the company running the ferry, I feel better in a position where it is not,” he said. “In previous times, we spent too much time answering to too many different people.”
Gord Macatee added that part of the reason the Ferries Act was restructured, in 2003, to create an independent commercial company, was to create a greater separation between politics and the operation of ferries. The other reason was to create the possibility for more long-term decision-making in the running of the ferry system.
“It is the job of the Ferry Commission to balance what the company needs in order to run a good business, with the needs of the customers, and the needs of the taxpayers,” said Macatee. “But the ferry commission is actually just two people, so the amount of regulating we can do is quite limited.”
On the matter of subsidies, Macatee said he did not much like the word, and prefers the term “service fees.” He added that government subsidies currently support capital costs for BC Ferries, but covering 100 percent of BC Ferries operating costs through the fare boxes would be a “good goal” to have.
Conversely, David Moseley, the former Director of Washington State Ferries said that the ferries have received $1.3 billion in state subsidies over the past 14 years because they are considered to be a part of the state’s transportation infrastructure, and a part of the highways system. If the free market were left to its devices and there were no subsidies, Mosely said, only three out of the ten existing ferry routes would be able to cover their operating costs.
The representative from Norway added that there, ferries are considered to be a part of the country’s infrastructure, with this in mind, keeping the system running requires it to be accesible so that people continue to use it.
Macatee said that while fares on BC Ferries have risen significantly since 2003, based on research he conducted in 2012, the user-costs associated with BC Ferries were not on the extremely high end of the spectrum – or on the extremely low end.
Members of the audience raised a number of questions directed at Macatee which the moderator called inappropriate and political.
Macatee responded to these questions generally by stating the successes of BC Ferries in recent years which include a great safety record, increased revenues from restaurant and retail sales, stable labour relations, the implementation of ferry technology such as the cable ferry and the development of LNG ferries, and improved bond ratings for the company.
