Ferry Fact File. Gabriola Ferry Advisory Committee
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1 Ferry Fact File 2018 Gabriola Ferry Advisory Committee
2 Contents Page Governance & Regulation 3 Ferry Fares and the Price Capping Process 5 The Fuel Deferral Account 8 Government funding for ferry services 10 Delivering a reliable and efficient ferry service 12 Financial Information 14 Who pays for Gabriola s ferry service? 16 Route 19 : Operational Information 17 Route 19 : Passenger fares by tariff type 18 Route 19 : Vehicle fares by tariff type 19 Route 19 : Passenger Traffic Analysis 20 Route 19 : Vehicle Traffic Analysis 24 Route 19 : Overloaded sailings 29 Route 19 : On-time performance 30 Route 19 : Customer satisfaction reports 31 Where to find more information 33 Gabriola Ferry Advisory Committee 34
3 British Columbia Ferry Services Inc. (BC Ferries) is one of the largest ferry operators in the world, providing year-round vehicle and passenger service on 24 routes to 47 terminals, with a fleet of 35 vessels. In April 2003, the Coastal Ferry Act transformed BC Ferries from a Crown corporation into an independent, commercial organization under the Company Act, with the BC Government as the sole shareholder. The Company is governed by an independent Board of Directors appointed by the B.C. Ferry Authority. The BC Ferry Authority is a non-share capital corporation whose purpose is to hold, administer and sell a voting share in BC Ferries, elect directors to the board of BC Ferries and to approve compensation plans for the directors and executives of BC Ferries. The nine-member board of the BC Ferry Authority comprises four directors representing the coastal regional districts, one representing the BC Ferry and Marine Workers Union and four other suitably qualified candidates. BC Ferries Governance and Regulation Donald P Hayes Chair of the Board of Directors, BC Ferries BC Ferries is the operating subsidiary of the BC Ferry Authority. In addition to the creation of BC Ferries as a wholly-owned subsidiary of the Authority, the Province established the initial capital structure of BC Ferries though the issuance of preferred shares. The Province owns the terminal lands and leases them on a long-term exclusive basis to BC Ferries.
4 BC Ferries Governance and Regulation Gord Macatee BC Ferry Commissioner A 60-year Coastal Ferry Services Contract exists between the Province and BC Ferries. The contract specifies service levels and transportation fees (financial support) for 20 out of the 24 coastal ferry routes. The contract is framed around four-yearly performance terms and is subject to amendments for each new performance term coinciding with price cap reviews conducted by the BC Ferry Commissioner prior to the start of each performance term. Performance Term 4 (PT4) runs from April 1, 2016 to March 31, Within this framework, BC Ferries has direct access to capital markets and carries responsibility for raising the funds necessary to maintain and replace its assets; the company s borrowing is therefore not treated as a government debt. The BC Ferry Commission is a quasi-judicial regulatory agency operating under the Coastal Ferry Act. The commission regulates the ferry operator on its 24 saltwater routes. The Commission is independent of both the provincial government and of BC Ferries. The primary responsibility of the Ferry Commissioner is to regulate ferry fares. The commissioner sets a ceiling or price cap on the average level of fares which BC Ferries can charge. The goal in setting the price cap is to balance the interests of ferry users with the interests of taxpayers while protecting the financial sustainability of the ferry operator.
5 Ferry fares are regulated by the Ferry Commissioner, who is responsible for setting a Price Cap on the average fares paid by ferry users. The process is conducted along the following lines: BC Ferries presents to the Ferry Commission their forecast of expenses, traffic and revenue for the upcoming performance term, assuming the same service level; The Commission reviews the BC Ferries submission, trims it where deemed appropriate, and assuming existing service levels and government service fees, arrives at a preliminary price cap; Government reviews the preliminary price cap, existing service levels and existing contribution, and determines what (if any) adjustments to the service fee and service levels are necessary to arrive at a final price cap; The Commission factors in any adjustments to the service level and service fee, along with any recommended BC Ferries efficiencies, and calculates a final price cap. The Price Cap represents the maximum permitted increase on the average fare paid across the whole ferry system. The average is calculated from a basket of vehicle and passenger fares, so fares on individual routes may, at times, increase above or below the level of the price cap. Ferry Fares and the Price Capping process
6 The BC Ferry Commission oversees two Regulatory Accounts held by BC Ferries. The purpose of these Accounts is to regulate how BC Ferries responds to external factors that may not have been foreseen at the start of a four-year Performance Term. Regulatory Accounts Compliance with the Price Cap The Commission directs BC Ferries on the raw data, formulas and assumptions that it must use and computes a maximum permitted level of average ferry fares for each year. This is called the price cap and is determined at the start of each Performance term. The first Regulatory Account measures the fares income received by BC Ferries (expressed as a weighted average fare) against the Price Cap. Every three months BC Ferries must report to the Commission the actual average level of fares paid by its customers. Should BC Ferries average fare exceed the level permitted under the price capping process for 3 consecutive quarters, the company is required to adjust the level of fares charged to bring the average back to the level determined by the price cap. In December 2013, the BC Ferries proposed that a regulatory policy be established that would enable it to transfer price cap regulatory account balances to or from the Fuel Deferral Account to balance a surplus in one account with a deficit in the other. The Commission rejected the proposal but granted BC Ferries the authority to transfer revenue earned in excess of the price cap to offset future deficits in the fuel deferral account, with the wider aim of stabilising fare levels.
7 Source : BC Ferry Commission Quarterly Reports for Period Ended June 30, 2017
8 Regulatory Accounts The Fuel Deferral account A second key element in the process of determining the Price Cap is a mechanism designed to deal with fluctuations in fuel prices over the performance term. At the start of 4-year term, a set price for marine diesel (and LNG) is built into the formula by which the price cap is determined. Provision is made for standard annual inflation in the set price but with the volatility of the fuel market, the actual price paid by BC Ferries can vary significantly from the set price. Such fluctuations can have unexpected impacts on the viability of BC Ferries, so the Commission requires that the actual cost of fuel purchased in each quarter is offset against the set price and any surplus or deficit is transferred to a regulatory account known as the Fuel Deferral Account which is zeroed at the start of a PT and must return to zero at least once during the PT. Fuel Rebates or Fuel Surcharges are applied to fares as a means of ensuring that ferry users contribute to balancing the account. However, since 2016, fuel rebates have been used not only to balance the fuel deferral account, but as a means of avoiding the perceived impact of fare increases. In April 2016, the fuel rebate was increased from 1% to 2.9%, entirely offsetting the 1.9% increase in fares in the year leading up to the provincial elections. The April 2017 increase (also 1.9%) was cancelled altogether and the 2.9% rebate has continued, resulting in a revenue gap that is widening each quarter and is now close to $12 million. In previous years, this gap would have been addressed by ending the rebate and substituting a fuel surcharge, but it appears the new government is prepared to accept a widening revenue gap as an alternative to increasing the prices paid by ferry users, given their manifesto commitments on fares.
9 Fuel Deferral Account balances Source : BC Ferries / FAC Chairs Group
10 BC Ferries Government funding for ferry services Hon. Claire Trevena Minister of Transportation and Infrastructure Financial support for BC s coastal ferry services comprises two distinct elements: A Federal/Provincial Subsidy Agreement, currently $29.2 million per annum Ferry Transportation Fees payable by the Province of British Columbia ($155.4 million in 2016/17), of which $96.2 million underwrites the operation of the 18 minor routes, with the remainder allocated to maintaining the northern ferry routes. No support is payable for the four major routes serving the lower mainland (routes 1, 2, 3 and 30) In 2016/17, Route 19 (Gabriola Nanaimo) received $3 million in transportation fees from the Province and $0.7 million through the Federal/Provincial Subsidy Agreement. Although the Federal/Provincial subsidy increases annually with inflation, payments from the Province were set in 2003 with no automatic indexation. The expectation at the time was that ferry fares would rise to meet any increases in operating cost incurred by BC Ferries. By 2012 though, the gap between Provincial support and operating costs was becoming unsustainable, and in 2012 the Province was forced to inject an additional $79.5 million funding for the remainder of PT3 and to initiate service reductions (effective April 2014) on the northern and minor routes to close the funding gap. Payments into PT4 have fluctuated to reflect the progressive transfer of funding for concessionary travel by Seniors from the Social Program into general Transportation Fees. The Province maintains its Social Program to provide free travel for Students, Disabled people and their escorts, and for travel for approved medical appointments. In 2016/17, Social Program Fees amounted to $16.9 million, of which Route 19 received $0.6 million. Social Program Fees are directly linked to the number of journeys undertaken by qualifying passengers.
11 Provincial support for minor ferry routes Source : BC Ferries Annual Reports to The BC Ferries Commission
12 BC Ferries Delivering a safe, reliable and efficient ferry service Mark Collins President & Chief Executive Officer, BC Ferries BC Ferries is responsible for delivering a safe, reliable and efficient service within the parameters of the Coastal Ferry Services Act. BC Ferries owns and operates a fleet of 35 vessels, ranging from the smallest (MV Nimpkish) with a capacity of 12 vehicles and 95 passengers and crew, up to the largest (MV Spirit of Vancouver Island) which carries 358 vehicles and 2,100 passengers and crew. The one passenger-only ferry in the system is operated by Kona Winds Charters on behalf of BC Ferries between Langdale, Keats and Gambier Islands. BC Ferries leases its terminals from the Province of British Columbia and takes responsibility for their day-to-day operation as well as any maintenance, terminal upgrades or improvements that are required. However, in locations (such as Gabriola) where ferry traffic lines up on the highway, the Ministry of Transportation is responsible for traffic management. BC Ferries operates and maintains its fleet in accordance with the requirements of Transport Canada who set safety standards for all marine operations. Each vessel in the BC Ferries fleet is regularly inspected to ensure compliance with Transport Canada regulations and Transport Canada determines the number of crew members required to safely operate each vessel, according to the number of passengers on board. MV Quinsam is licensed to carry up to 392 passengers with 8 crew, though she normally operates with 7 crew and a maximum of 293 passengers.
13 The table below compares the financial performance of Route 19 with other BC Ferries routes, highlighting what proportion of the total operating costs for each route is covered by fares income (including fares paid by government through social program reimbursements). Source : BC Ferries Annual Reports tothe BC Ferries Commission Financial Performance across the network
14 Route 19 Financial information Headline financial information is published for each route in BC Ferries Annual Report to the Ferries Commissioner. Detailed analysis of expenditure items is not published, owing to commercial sensitivity. Note that the $400k service reduction in 2014 reduced the operating deficit by almost $1million, well in excess of the $400k savings target. Source : BC Ferries Annual Reports to the BC Ferries Commission fiscal year 2012/13 fiscal year 2013/14 fiscal year 2014/15 fiscal year 2015/16 per round per round per round per round Financial Performance route 19 route 19 route 19 route 19 trip trip trip trip fiscal year 2016/17 per round route 19 trip Round trips operated 5,728 5,730 4,963 4,915 4,922 Tariff revenue from vehicle fares ($) 2,874, ,895, ,886, ,133, ,249, Tariff Revenue from passenger fares ($) 1,995, ,012, ,263, ,381, ,479, Total tariff revenue ($) 4,869, ,908, ,150, ,515, ,729,251 1,000 Ancillary revenue ($) 63, , , , , Social Program Fees ($) 916, , , , , Total operating revenue ($) 5,848,373 1,021 5,942,505 1,037 6,075,285 1,061 6,477,098 1,131 6,400,251 1,117 Total operating Expenses ($) 6,992,000 1,221 7,399,000 1,292 6,607,000 1,153 6,856,000 1,197 7,144,000 1,247 Operating Deficit ($) -1,143, ,456, , , , Amortization ($) -2,565, ,437, ,204, ,157, ,143, Financing expense ($) -656, ,071, , , , Total Capital cost ($) -3,221, ,508, ,141, ,966, ,855, Gain (loss) on disposal of capital assets ($) 0-3,000-89, Route deficit before service fees ($) -4,364, ,967, ,761, ,344, ,598, Ferry Transportation Fees ($) 2,775, ,740, ,852, ,778, ,003, Federal-Provincial subsidy agreement ($) 662, , , , , Net route surplus / deficit ($) -927, ,559, , , ,251 16
15 BC Ferries What is included in operating costs? Source : BC Ferries Annual Report 2017
16 BC Ferries Route 19 : Revenue sources 2016/17 7% Who pays 24% for Gabriola s 30% ferry service? 1% 6% 32% Source : BC Ferries Annual Report to The BC Ferries Commission 2017 Passenger fares Social Program Fees Provincial Transportation Support Vehicle fares Ancillary Revenue Federal/Provincial Subsidy
17 Each year, BC Ferries presents its annual operating statistics as part of its Annual Report to the BC Ferries Commission. Key performance indicators include the numbers of vehicles and passengers carried, the % of vehicle deck space utilised, the number of overloads reported and the % of sailings that operated on time. Route 19 Operational Information Source : BC Ferries Annual Reports to the BC Ferries Commission fiscal year 2012/13 fiscal year 2013/14 fiscal year 2014/15 fiscal year 2015/16 fiscal year 2016/17 Operational Performance 6.1m AEQ 5.34m AEQ 6.1m AEQ 5.34m AEQ 6.1m AEQ 5.34m AEQ 6.1m AEQ 5.34m AEQ 6.1m AEQ 5.34m AEQ Round trips operated 5,728 5,730 4,963 4,915 4,922 Round trips required by contract 5,731 5,732 4,961 4,913 4,902 Round trips cancelled Extra round trips operated MV Quinsam Vehicle Capacity (see note 1) Vehicle capacity provided (see Note 1) 721, , , , , , , , , ,080 Vehicles carried (AEQs) 364, , , , , , , , , ,563 Vehicle capacity utilisation (see Note 1) 50.5% 45.5% 49.4% 44.4% 55.1% 49.6% 57.4% 51.7% 58.8% 52.9% Average # of vehicles per sailing % of sailings overloaded 5.2% 5.1% 7.8% 5.6% 6.7% Passengers carried 771, , , , ,452 Average # of passengers per sailing % of sailings departing on time 96.1% 95.8% 90.1% 96.4% 95.2% (within 10 minutes of schedule) Note 1 BC Ferries' Automobile Equivalent (AEQ) standard measurement has been changed from 5.34 metres to 6.1 metres. Capacity Provided and Capacity Utilization are shown using both the new measure (in BLACK) and the previous measure (in RED) which was used as the standard until 2016.
18 BC Ferries Route 19 passenger fares by tariff type Source : BC Ferries data supplied to FAC
19 BC Ferries Route 19 Vehicle fares by tariff type Source : BC Ferries data supplied to FAC
20 Route 19 Passengers per day quarterly averages Passenger numbers are reported quarterly to the Ferries Commissioner though each quarter has a different number of operating days, so in order to monitor trends more accurately, the FAC publishes data based on the average number of passengers carried each operational day. The reduction in passenger traffic on Route 19 in 2014 followed the service cuts and the introduction of a 50% charge for Seniors. By Summer 2017, passenger traffic had recovered to levels last seen in 2011, despite the loss of two round-trip sailings. Source : BC Ferries Quarterly Operations Reports to the BC Ferries Commission
21 BC Ferries traffic statistics are expressed in terms of passengers per calendar month, making month-by-month comparisons difficult because of the varying number of days in each month. To address this, the FAC publishes average daily passenger data each month. Source : BC Ferries Monthly Traffic Statistics Route 19 Passenger traffic by month since 2013
22 Route 19 Passenger traffic on sailings from Gabriola Island Note : The 1350 departure from Gabriola on Saturdays and Sundays operated only during July and August Source : BC Ferries data supplied to the FAC
23 Passenger traffic on sailings from Nanaimo Harbour Route 19 Note : The 1425 departure from Nanaimo on Saturdays and Sundays operated only during July and August Source : BC Ferries data supplied to the FAC
24 Route 19 Quarterly vehicle capacity utilisation The MV Quinsam can typically accommodate up to 70 Automobile Equivalents (AEQs) though at the end of 2016, BC Ferries recalculated the capacity of all its vessels adopting a longer measure of 6.1 metres per AEQ instead of the previous measure of 5.3m. Quinsam s published capacity is now stated as 63, though this chart tracks changes against the previous capacity of 70. Spring 2017 saw the Vehicle Capacity Utilisation (the percentage of deck space occupied) increase to 58.3% up by 4% compared to the same quarter last year. Summer 2017 utilisation is likely to be close to 70%. Source : BC Ferries Quarterly Operations Reports to the BC Ferries Commission
25 Vehicle numbers are reported quarterly to the Ferries Commissioner though each quarter has a different number of operating days, so in order to monitor trends more accurately, the FAC publishes data based on the average number of vehicles carried each operational day. Note the reduction in vehicle traffic on Route 19 in 2014 followed the service cuts, and the progressive recovery each subsequent quarter. By Summer 2017, vehicle traffic had recovered to pre-2011 levels, despite the loss of two round-trip sailings leading inevitably to more overloads. Source : BC Ferries Quarterly Operations Reports to the BC Ferries Commission Route 19 Vehicles per day quarterly averages Source : BC Ferries Quarterly Operations Reports to the BC Ferries Commission
26 Route 19 Vehicle traffic by month since 2013 BC Ferries traffic statistics are expressed in terms of vehicles carried per calendar month, making month-by-month comparisons difficult because of the varying number of days in each month. To address this, the FAC publishes average daily vehicle traffic data each month. Source : BC Ferries Monthly Traffic Statistics
27 January - February March - April May - June From Gabriola From Gabriola From Gabriola Sun Mon-Fri Sat Sun Mon-Fri Sat Sun Mon-Fri Sat # # # ** ** ** 2230 July - August September - October November - December From Gabriola From Gabriola From Gabriola Sun Mon-Fri Sat Sun Mon-Fri Sat Sun Mon-Fri Sat # # # ** ** ** 2230 Route 19 Vehicle capacity utilisation (2016/17) Source : BC Ferries data supplied to the FAC Typically less than half full Typically 50% to 75% full Typically almost full (over 75%) Typically full with overloads
28 Route 19 Vehicle capacity utilisation (2016/17) Source : BC Ferries data supplied to the FAC Typically less than half full Typically 50% to 75% full Typically almost full (over 75%) Typically full with overloads January - February March - April May - June From Nanaimo From Nanaimo From Nanaimo Sun Mon-Fri Sat Sun Mon-Fri Sat Sun Mon-Fri Sat # # # ** ** ** July - August September - October November - December From Nanaimo From Nanaimo From Nanaimo Sun Mon-Fri Sat Sun Mon-Fri Sat Sun Mon-Fri Sat # # # ** ** **
29 BC Ferries reports quarterly on the percentage of sailings with vehicle overloads. Note the significant increase in overloads after the service cuts in April 2014 and the improvement achieved in 2015 following the recasting of the ferry schedule. However, as vehicle traffic has increased, the number of overloads on Route 19 is increasing once more and in Spring 2017 hit peak summer levels (approaching 10%) for the first time. Overloads typically occur on successive sailings during the morning from Gabriola and from mid-afternoon onwards leaving Nanaimo. Source : BC Ferries Quarterly Operations Reports to the BC Ferries Commission Route 19 Quarterly vehicle overloads report Source : BC Ferries Quarterly Operations Reports to the BC Ferries Commission
30 Route 19 Quarterly on-time performance As the volume of vehicle traffic increases on a route, it becomes more difficult to maintain on-time performance and as this chart shows, the percentage of on-time departures in the Spring 2017 quarter plummeted to just 86.1% compared to the past two years, when more than 97% of departures departed on time (A ferry departing within 10 minutes of its scheduled time is considered to be on time ) On-time performance at this low level more typically occurs only in peak summer and the most recent quarter would suggest that Route 19 has reached a critical volume that is now affecting its on-time performance. Source : BC Ferries Quarterly Operations Reports to the BC Ferries Commission
31 Customer satisfaction with the service provided to Gabriola Route Survey 2014 Survey 2015 Survey Customer Satisfaction route 19 minor route minor route route 19 average average route 19 minor route average 2016 Survey minor route route 19 average Satisfaction with service provided Earliest ferry early enough Latest ferry late enough Ferry sailing frequent enough Ability to get onto desired ferry Ability to connect with other sailings Ferry departing on time Safety of ferry operations Safety of loading/unloading Value for money of fares Key to colour codes Satisfaction on Route 19 is below the average for minor routes Satisfaction on Route 19 is the same (+/- 0.1) as the average for minor routes Satisfaction on Route 19 is above the average for minor routes Source : BC Ferries Commission Annual Customer Satisfaction Surveys conducted by the Mustel Group
32 Route 19 Customer satisfaction with the ferry journey 2013 Survey 2014 Survey 2015 Survey 2016 Survey minor route minor route minor route minor route Customer Satisfaction route 19 route 19 route 19 route 19 average average average average Overall trip experience Terminal experience overall Efficiency of ticket purchase Staff courtesy Clarity of staff directions Clarity of public announcements Availability of washrooms Cleanliness of washrooms Procedures for loading Professionalism of terminal staff Availability of parking spaces Parking value for money Ease of using drop off/pick up area Availability of seating in terminal Comfort of seating in terminal Onboard experience overall Cleanliness of washrooms Comfort of lounge seating Cleanliness of lounge area Ease of access for disabled people Clarity of public address system Procedures for unloading Professionalism of onboard staff
33 Government of BC Coastal Ferry Act Coastal Ferry Services Contract (consolidated version) _Unofficial_Consolidation_Contract.pdf BC Ferries Corporate information Where to find more information BC Ferries Monthly Traffic Statistics BC Ferries Commission Annual Reports from BC Ferries BC Ferries Commission Quarterly Reports from BC Ferries Gabriola Ferry Advisory Committee
34 Gabriola Ferry Advisory Committee Steven Earle (Chair) Heather O Sullivan (Islands Trust) Jane McCall Woods Peggy Richardson Howard Houle (RDN) Jim Ramsay Paul O Sullivan David Prevost (SD68) John Hodgkins December 2017
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