BC Ferries Routes as a Component of Provincial Transportation Infrastructure: Including the Maintenance and Legislative Review of the Discovery Coast Ferry Route 40 (2014)
On November 22, 2013 the government of British Columbia announced the cancellation of direct ferry services between Port Hardy and Bella Coola, the "Discovery Coast" Route 40 service, citing low ridership, annual operating deficits, and forthcoming vessel replacement costs as the rationale for service discontinuation. Local, regional, and provincial representatives expressed concerns about the decision, indicating that Route 40 is a critical component in facilitating the dispersion of tourism from the Lower Mainland through the rural regions of Vancouver Island and the Cariboo-Chilcotin Coast. They claim that these 'downstream' benefits of the service establish a clear business case for continued marine passenger transportation service between Port Hardy and Bella Coola. International tour operators are now questioning British Columbia as a vacation destination for their clients because of the decision to close this specific route.
The Chamber recognises that government have a responsibility to manage spending. Indeed the Chamber has called on government to review the ferry system to find savings that will not have a negative economic impact. The decision on Route 40 clearly does not meet this criteria.
Government has cited the fact that the route is operating at only 30% capacity. This represents a financial loss of $4.243 million per year in terms of operating costs over fare revenue. Combined with the estimated cost to replace it in two years of approximately $100,000,000 government has deemed that it is in taxpayers’ interest to cancel the service.(1)
The Chamber does not believe this is an accurate assessment of the impact of this decision. While the Chamber recognises that travellers will still be able to travel along this route what has been proposed by the provincial government, in place of the direct service between Port Hardy and Bella Coola, is a much more laborious endeavour. Reducing the direct sailing service adds nearly 5 hours to an already 13 hour sailing, with a layover and passenger transfer at a place where no facilities exist, not even public washrooms. The Discovery Circle route is a strong tourism product used to attract international visitors. This reduced service is not encouraging travellers to use our ferry service, will have a negative impact on visitor numbers and, therefore, a profound negative impact on the region and the provincial economy.
As indicated in a Tourism Industry Association of BC Economic Impact Study, compiled in January 2014, tourism businesses will feel these service reductions deeply. For businesses in this region, it is estimated that an average of 35% of their visitation and revenues are derived directly from Route 40 passenger spending. The North Island region is the second most reliant on Route 40 for tourism business revenue, with an average of 31% of revenues attributed to Discovery Coast ferry passenger spending.(2)
As part of the Discovery Coast Tourism Economic Impact Analysis a survey was conducted with businesses in the impacted region. Half (50%) of the businesses in the survey region indicated that they already had reservations booked by visitors intending to travel the Coast Cariboo Connector Circle Route, with many indicating they are uncertain how to manage these bookings.(3) Several written responses and comments from stakeholders during interviews suggested that the late announcement of service cancellation may be a contravention of the Coastal Ferry Services Contract, which they claim requires twelve (12) months’ notice of any major schedule changes.
The report estimates that when the impact on visitor numbers is taken into account government actually stands to lose revenue. The report shows that with the loss of this route B.C. will see a loss of 15-30% of current Route 40 passengers on the Coast Cariboo Connector Circle Route who will choose a destination different from British Columbia if they are not able to travel this particular Circle Route.
This will result in a significant loss of revenue to operators and a loss of $783,441 in provincial tax revenue.(4)
Perhaps more disappointing is the lack of response by the provincial government to suggestions on measures to mitigate cost and grow revenue on the route. Tourism operators in the region have suggested that the route be limited to a direct Port Hardy – Bella Coola service. This would eliminate the need for a replacement vessel with cabins for a crew, which is one of the main concerns of BC Ferries in seeking a replacement, and it would also make the route more attractive to tourists. Mid-coast ferry service would continue to operate as it does during the bulk of the year.
By making drastic cuts to the Discovery Coast ferry service, as well as system-wide cutbacks, BC Ferries is not just jeopardizing the health of the tourism industry, but also deconstructing a vital component of our provincial highway infrastructure. Common knowledge indicates that this infrastructure change will isolate rural areas of Vancouver Island as well as Central/Interior B.C., thus impeding trade, transportation, and economic growth in the rural regions noted.
Our provincial government needs to acknowledge that BC Ferries, and their transportation & trade routes are an important and essential piece of transportation infrastructure to British Columbia. This reduction of service without adequate consultation will carry broad reaching economic impacts on all communities, coastal or not, that are part of any circle route in the province that relies on ferry transportation as part of that route. The cuts to the Discovery Coast ferry service involve the elimination of the key direct route between Bella Coola and Port Hardy, which economic studies show to be profitable to the province. It is also important for the government to understand that aside from the broad economic and infrastructure implications, elimination of this route will prevent existing international tour operators from acknowledging BC as a tourism friendly destination.
THE CHAMBER RECOMMENDS:
That the provincial government:
Reverse and defer any service reductions to any routes until adequate economic impact studies are completed;
BC Ferries be required to complete a formal and independent 3rd party conducted, economic impact study prior to the closing or severely reducing service of any routes that would impact other components of provincial transportation infrastructure (such as circle routs), as deemed satisfactory to the provincial legislature; and
BC Ministry of Transportation and Infrastructure issue a letter of intent to engage BC Ferries in review of existing cost structure & efficiency of all existing routes.
(1) Figures reported in http://www.coastmountainnews.com/news/233860771.html
(3) Ibid, pg. 3.
(4) TIABC, pg. 4.