BC Ferries operating like a business?

In an ironic twist worthy of a Shakespearean play, NDP leader Carole James criticized BC Ferries this week for basing its bidding decisions on value for money rather then playing politics. Lest we forget the Fast Ferries fiasco, which cost taxpayers a half a billion dollars, the decision by BC Ferries to go with the lowest bidders for its new vessels is a good sign the fledgling company is free from government meddling.

James also criticized the Liberal government for getting out of the ferry business and argued that ?BC Ferries spends taxpayer dollars and therefore should be subject to public oversight.? But the NDP Leader has it wrong. BC Ferries is not a taxpayer supported Crown Corporation; it is not even a self-supported Crown Corporation. In fact, in April 2003, BC Ferries became an independent regulated company and now operates as a private business, albeit one with a sizable contract with the provincial government.

Nonetheless, even as an independent company BC Ferries is subject to substantial regulation, provincial oversight and its fares, routes and services levels are set out in legislation and under the scrutiny of the BC Ferry Commission. New capital investments must also be approved by the BC Ferry Commissioner, including the controversial bid to acquire two Super ?C? class vessels with an optional third.

The bid for the new vessels went out internationally and contrary to the assertion made by James, domestic shipbuilders were invited to compete as well. The local company, Washington Marine Group, made it to the second phase of the bidding process but was not invited to the third because of cost and capacity estimates. Translation: their bid was not competitive. As an independent business should, BC Ferries made its decision according to its bottom line and not from political pressuring.

Provincial governments have a long history of micromanaging in big transportation and infrastructure projects, especially in BC, and it?s always the taxpayer that ends up paying through the nose. This time the NDP would have all ferry passengers pay extra to satisfy the pressure to build at home. If BC Ferries were to take the advice of Carol James and George MacPherson, President of the Shipyard General Workers? Federation, ferry users would be paying a lot more and getting less, why?

BC Ferries has roughly $2 billion in new capital investments, a.k.a. new ferry purchases, planned over the next 15 years. If they started giving preferential treatment to local industry, despite project costs, then the cost per ferry would be a great deal higher and as a consequence fewer resources would be available for new ferries. BC Ferries would then try to the recover costs of awarding uncompetitive contracts by increasing fares to the maximum allowable under legislation, parking rates and on-board retail prices would likely skyrocket. Why should passengers be forced to subsidize an industry that cannot compete internationally? Why should an independent company be forced to pay more because of industry and union lobbying?

Never mind the ridiculous notion that business and governments should only buy from local industry is contrary to the driving force behind our province?s economy: trade, both inter-provincial and international. And, if our ships are only to be built in BC, than why not our cars, our computers, our MRIs? Because the cost to taxpayers and consumers would be enormous and our province would experience a mass exodus.

BC Ferries is on the right track, its making decisions based on what makes business sense, not what is politically expedient. The last thing BC needs is more governmental meddling in transportation projects.

Sara MacIntyre

British Columbia Director

Canadian Taxpayers Federation

website: www.taxpayer.com