Policy Paper on Socioeconomic Impacts of Ferry Fare Increases

A series of ferry fare increases has resulted in a $2.3 billion reduction in British Columbia’s GDP over a ten year period.  This finding is just one of many in a policy paper that examines the socioeconomic impact of BC Ferries’ fare increases from 2003 to 2013.  The analysis included in the policy was commissioned by the Union of BC Municipalities (UBCM) and the Association of Vancouver Island and Coastal Communities (AVICC). 

To the knowledge of both organizations, this is the first analysis of the socioeconomic impact of BC Ferries that has been made available to the public. 

The report analyzes the impact of fare increases on ridership levels and the overall impact of BC Ferries on the provincial economy. The report found that BC Ferries stimulates a total of $1.8 billion in expenditures each year, which in turn produces $1.5 billion in total value-added GDP for BC. 

The report estimates that if fare increases from 2003-2013 had been limited to the rate of inflation, passenger volumes would have grown by 19%, adding $2.3 billion to provincial GDP over that ten-year period.  Instead, overall ridership over the same period declined by 11%. This foregone economic activity resulted in an estimated total loss of $609 million in tax revenues from 2003-2013 at the federal, provincial and local levels of government.  

“The release of this report provides an opportunity to re-think the policies that direct the funding of BC Ferries,” said UBCM President Rhona Martin. “This study demonstrates a clear link between fare increases and declining ridership, and the cost of those fare increases to the provincial economy.  As a first step towards reversing the trend in ridership, we are asking the province to restore fares and service to 2013 levels.”

The report also highlights BC Ferries’ high farebox recovery rate (92%) in comparison with other publicly supported transit systems. Despite frequent criticism, BC Ferries compares favourably with its competitors in nearly all categories of operational performance.

“The findings of the study show that we already have an efficient system in terms of cost recovery,” said Sidney Mayor and AVICC President Larry Cross.  “What is missing is recognition by the province that ferry service is an extension of the highway system and needs to be funded accordingly.  Our hope is that we can use this study to work with the province to develop a long-term strategy that will ensure the sustainability of the ferry system and coastal communities.”

The report will be considered by the membership at UBCM’s annual Convention in Whistler September 22-26, 2014.  UBCM thanks the Special Committee that worked with the consultant Peter Larose of Larose Research and Strategy to produce the report.

Local governments that have questions about the report may contact Marie Crawford, UBCM’s Associate Executive Director. Media inquiries may be directed to Paul Taylor, Director of Communications for UBCM.

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