Interim Report
on
Assessment of
Government of Newfoundland and Labrador
Intra-Provincial Non-Commercial Ferry Rates
and
Specific Relevancy/Impacts
for Bell Island Service
Prepared for
the Bell Island Ferry Users’ Committee
by
Extension Community Development Co-operative Society Ltd.
22 January 1999
The following is an abridged report. The two files below contain the full interim report including footnotes, tables and appendices. It is available in two formats: Wordperfect (.wpd) and Adobe Acrobat. (.PDF)
Forward
This assessment was prepared by Extension Community Development Co-operative for the Bell Island Ferry Users’ Committee. It is an interim report only on ferry rates and the final report will encompass a broader range of issues including ferry service levels.
The writers of the report were Patrick J. Hann, Project Manager and Dr. David Macdonald. We gratefully acknowledge the assistance given by Bernard Fitzpatrick of the Ferry Users’ Committee and Ed Kent, CA, Committee Advisor.
TABLE OF CONTENTS
BELL ISLAND AND THE FERRY
AN UNREALIZED ASSET
FERRIES IN OTHER EASTERN PROVINCES
PROVINCIAL POLICY ON ROAD AND FERRY CHARGES
EXPECTED SOCIAL AND ECONOMIC EFFECTS OF RATE INCREASES
CONCLUSIONS
RECOMMENDATIONS
APPENDICES
APPENDIX I
APPENDIX II
APPENDIX III
BELL ISLAND AND THE FERRY
Bell Island was once the third largest community in Newfoundland, a thriving mining centre from the 1890s to the 1960s; then the iron ore mines closed in 1966. At the height of their fortunes the mines employed 2,200 people and the island's population is said to have topped 12,000. When the mines closed families left en masse, many for Cambridge, Ontario and homes on the island became unsaleable. The population halved in the following decade, since when it has declined slowly but steadily to its present level of approximately 4,000.
The closing of the mines was a heavy blow to the island's economy and subsequent attempts to attract large industries failed, but yet the community survived. Since the mines closed, work has been scarce and unemployment remains high The income support case load for Bell Island in November, 1998 was 664 at a projected cost of $5.28 million for 1998-9 (interview with Terry Haire, Manager of Social Assistance, Department of Human Resources and Employment, Government of Newfoundland and Labrador, January, 1999). There are about 1,100 occupied houses on the island, so income support affects about 60 per cent of houses, though the caseload is falling., although Bell Island is still a viable community and one of the larger communities in the province. Approximately 50% of Bell Island workers work on the island and the infrastructure is better than would be predicted from the size of the population - 3 schools (with 750 students), a hospital, paved roads, water and sewer service, an arena and a fishplant. Nevertheless, Bell Island has become heavily reliant for employment and services on St. John's, whose proximity makes daily commuting, by road and ferry, possible. This makes Bell Island in effect a bedroom community in the St. John's district and the ferry is a busy one, carrying more than 400,000 passengers and 200,000 vehicles annually, which is approximately 60 per cent of the provincial total.
It is not too strong to say that, this being the case, the 5 kilometer, 20 minute ferry crossing is Bell Island's economic and social lifeline. For this reason ferry rates become a matter of importance and issues concerning the ferry unite and activate the residents. The first organized body, called the Commuters' Committee, was formed in the late 1960s, shortly after the mines closed and commuting began, to press for a ferry service that served the needs of commuters in cost and frequency. In 1984, at the recommendation of the Touche Ross report, the Commuters' Committee was replaced by the Ferry Users' Committee, with council representation, which represents interests in addition to those of commuters. The issue of the ferry service, in other words, has been a bone of contention for more than thirty years.
The present occasion is not the first time that ferry rates have caused controversy and a short account of the previous round of proposed increases in 1984 will lend perspective to the current dispute. From the 1950s until 1984 the ferry service was contracted to a private company; rates were established by the Public Utilities Board and stayed constant for more than 30 years. In 1984 the Ferries Act was repealed, rates were removed from the Public Utilities Board and a new schedule of rates was proposed, under which all provincial ferries were to rise to a uniform rate per kilometer by 1989. Bell Islanders objected to uniform treatment of ferries, as theirs was the only one recognized as a daily commuter service. A special commuters' rate, at one-third of the regular car-and driver or walk-on rate, was introduced for the Bell Island service.
In 1989 the Wells government was elected and, fulfilling an election promise, introduced a new principle for calculating rates on all ferries, according to the distance that each ferry travelled. The car-and-driver rate per kilometer was fixed at the equivalent cost of highway travel and other rates were derived from this, including the commuters' rates for Bell Island - which recognized the Bell Island ferry as a special case.
The next round of proposed increases came in 1995. The official rationale for the new schedule of rates, as stated at the time, was that the province had taken responsibility from Marine Atlantic for the coastal boat services on the south coast. In 1995 the provincial government as part of a major effort to address a budget deficit announced a new set of rates for provincial ferries. Minister Efford, in a press release noted "the constantly increasing operating deficit for the intra-provincial ferry services which is presently subsidized approximately 90 per cent", was also a contributor to this decision. The new schedule of rates introduced a minimum tariff for the first five kilometers of travel with extra charges for further distances. This rate schedule came into effect on December 1st, 1995 and it provided for periodic increases to September, 1999.
The minimum tariff component of ferry rates is intended to recover some of the capital cost of the ferry service. A senior government official explained this as follows:
"The existing rate structure includes two fundamental principles associated with the provision of a transportation service, fixed and variable costs. The first being that fixed costs have been incurred before the vessel leaves the dock and the second being the variable cost associated with the vessel while in transit. These fixed and variable costs vary by service as the capital and operating costs depend on a wide variety of aspects including the size of vessel, the number of vessels, the type of vessel, the level of the service required and the operating conditions."
The explanation continued:
"Government’s rate policy established minimum standards for rates. The rate for fixed costs included up to 5 km in distance for the service. This distance was established as a number of services are at or around 5 km in length. Each service in excess of 5 km is charged a rate of $0.25 for each additional 5 km of distance or portion thereof."
Clearly, Government’s ferry rate policy contains a major component for the recovery of fixed capital transportation costs through the 5 km minimum tariff. Consequently, ferry services are the only area where Government attempts to recover capital infrastructure transportation costs of Government in a fare structure or through tolls and in fact Government has been recently highly critical of the Governments of New Brunswick and Nova Scotia for attempting to charge tolls on the new sections of the Trans Canada Highway in these provinces.
Ironically, Government does not charge for fixed transportation capital cost, nor does it support others for adopting it, yet it is the single most vital component of the rates on the Bell Island service as Bell Island’s ferry route is below 5 km. Under the 1995 proposed fare structure, the Bell Island per kilometer rate was targeted to be substantially more than most other services, and co-incidentally, approximately 60% of all Newfoundland intra-provincial ferry traffic is carried on the Bell Island service. The minimum tariff capital transportation fixed cost recovery is both arbitrarily set, inequitable, and in conflict with other Government policies.
As far as the Bell Island ferry is concerned, these further increases have so far not taken place. The first (December 1st, 1995) increase went into effect as planned and these are still the rates in January, 1999. Through consultations with the Bell Island Ferry Users' Committee, savings through schedule changes and reduced operations were made and, because of these savings, further rate increases were avoided. Rate increases scheduled for September and December 1st, 1998 were deferred until April 1st, 1999.
The present and proposed future rates, for cars and adult foot passengers, are shown below:
Bell Island ferry rates, return trip
present
proposed proposed
proposed
original
(since 12/95) 4/99
9/99
12/99
target
Car & driver
- regular $5.00
7.00 8.50
9.00 15.00
- commuter $2.00
3.00 3.50
4.50 7.50
Walk-on passenger
- regular 3.00
3.50 4.00
4.00 5.00
- commuter 2.00
2.00 2.00
2.00 2.50
N.B: The proposed 9/99 and 12/99 rates are those originally scheduled for 9/97 and 12/97. Rates after 12/99 would have to be addressed by Cabinet and the department has no mandate at present to implement them.
This table does not take into account the negotiated savings in the Bell Island ferry service, which in effect makes the rates even higher for an equivalent service.
The three proposed increases shown in the table above represent an 80 per cent rise in the regular car rate, which is a hefty increase. Residents have expressed their fears that such increases will add to the cost of living, encourage out-migration, reduce their access to services in St. John's and create a disincentive to employment. Of particular concern are the many low-paid commuters. Ferry users and community leaders have expressed fears that rate increases will make commuting to work uneconomical for them.
AN UNREALIZED ASSET
Bell Island has persevered, if not prospered, since the closing of the mines. In many eyes the community is a leftover of the mining industry, its residents left stranded on an inconvenient island. We take an opposite view of both the development potential of the community and its location. The island location is, if properly promoted, the community's greatest developmental asset and ferry policy plays a crucial role in the development of the community and the realization of its assets. What is needed to make this happen is a development-oriented ferry policy.
In many places, where there is an island near a city, it becomes the city's playground. We think, for instance, of the Gulf Islands near Vancouver and their use for boating, holiday cottages, hiking, birdwatching, artists' colonies, retirement, recreation and amusement. Their location is their lifeblood and the same can be true of Bell Island. Seen this way, what's thought to be its biggest drawback is in fact its biggest asset - its location, on an island, near a city. For this reason we call Bell Island St. John's unrealized asset and draw attention to what's needed to realize that asset - in particular to the role of a convenient, frequent and inexpensive ferry service in realizing this potential.
The official policy regarding ferry rates, as noted above, is to increase the ferry's revenues by charging more for passage. We'd like to point out that it's far from certain that this policy will succeed. If the increased charges decrease the traffic, or increase dependence upon welfare, then higher rates will not necessarily lead to higher revenues. We want to propose an alternative approach, one that we think will be more effective - that of using ferry rates to develop the economy of the island. Ferry rates themselves will play a crucial role in the development of the Bell Island economy. Compare Portugal Cove-St. Phillips and Bell Island in developmental terms - much house-building in the former, only a little in the latter; an unemployment rate of 13 per cent in the former and 33 per cent in the latter at the 1996 census. Yet the mainland has no obvious advantage over the island except one - that you don't have to take a ferry to get there from St. John's. This comparison illustrates what we say about a convenient, frequent and inexpensive ferry service being essential to the development of the island economy: what happened on the mainland can happen there too, if the necessary conditions are put in place.
Bell Island was much more populous in the days of the iron ore mines. Today unemployment is high, but even so its economy, although devastated, is far from moribund. Its location, as we've stressed, can be viewed as an asset rather than a liability. As a legacy of mining days, there is far more infrastructure than is usual in a community of this size. Houses and building lots are abundant and cost far less than across the tickle in Portugal Cove - $2,500 as opposed to $25,000. There have been some new houses built in recent years and retirees are returning to the island, buying existing houses and renovating them. Some small industries have started on the island in recent years, most notably a fishplant, a commercial driving school and a craft manufacturing operation, though there is much room for expansion in this field. Tourism has been stimulated by offering tours of and theatre in the iron ore mines. These activities drew more than 4,000 visitors last year despite a late start to the season, and 10,000 visitors are projected for 1999. There are plans for expansion in the next few years but there are also worries about how the ferry system will cope with more visitors. These are small beginnings, but they illustrate how dependent development on the island is upon a ferry service that can accommodate it.
FERRIES IN OTHER EASTERN PROVINCES
We are calling for a development-oriented policy on ferry rates. In this context it is instructive to look at the ferry-rate policies of other provinces in Eastern Canada, which are quite different from the policy of the Government of Newfoundland and Labrador. Most are either free or subject to a nominal charge, there is no attempt at capital-cost recovery and no minimum tariff.
Nova Scotia has 7 ferry crossings. Four of these are cable ferries for which there is a nominal charge ($1.75 per vehicle), reduced for frequent users. There are 3 self-propelled ferries, two of them short crossings (1/4 and 3/4 mile) of Digby Neck in the Bay of Fundy at a return charge of $2 per passenger vehicle, reduced for frequent users. The third and longest self-propelled crossing is a passenger ferry to Tancook Island on the Southern Shore, a distance of about 5 miles. The return charge for this journey is $5, reduced to $2 for frequent users; an annual pass is also available for $250, which works out to $1 per crossing for daily commuters. Family passes are also available. In Nova Scotia there is no element of capital-cost recovery and the revenues cover less than 10 per cent of the operating costs.
New Brunswick makes no charge for virtually all its 15 ferries, of which 12 are cable ferries. There are 3 self-propelled ferries, 1 from Kingston to St. John and 2 to Deer Island off the coast of Maine, for which there is no charge. The only ferry for which there is a charge is the 18-mile crossing to Grand Manaan Island, now in the hands of a private operator. The rates for this service were established some years ago and rise on the first of each year by the increase of the consumer price index. The current rate for a car and driver is $34.95 return for a 60km journey, or 58 cents per km. This is comparable to the present Bell Island ferry rate, even though the New Brunswick ferry has been privatized. The same private operator has a second crossing, from Grand Manaan to White Head Island (about 25 minutes), for which no charge is made.
Quebec operates eight ferry services, not including three that are privately operated but subsidized by the provincial government. Most of the public ferries are runs of about 1km; most of these are free. Two other short crossings near Sorel and Quebec City carry commuter traffic; the one-way fare for each is $4.50 for car and driver, but a frequent user may buy a monthly pass for $15. There is one long crossing, 55 km from Matane to Baie-Comeau, which costs $37.40 one way for a car and driver, or 68 cents per km.
Lastly, we should consider the fares charged by Marine Atlantic on the two runs to North Sydney from Port aux Basques and Argentia. The comparison is instructive because these fares are calculated on a different basis from the Bell Island ferry, but produce similar rates per kilometer. In theory these fares are meant to recover all costs, but in practice they must be approved by Transport Canada and requested increases are not always granted. The 1999 tariff for a car and driver works out to 50 cents per kilometer on the Port aux Basques run and 46 cents per kilometer on the Argentia run. These are comparable to the present rate (50 cents per kilometer) on the Bell Island ferry.
PROVINCIAL POLICY ON ROAD AND FERRY CHARGES
We should consider how the province views charges for travel by ferries (other than its own) in comparison to charges for travel by road. Regarding the Gulf ferries, it has been the province's policy that the Federal Government should treat them as extensions of the Trans-Canada Highway. This approach views roads and ferries equally as parts of the national highway system - and by extension of the provincial highway system, with which we concur. Premier Tobin has, in fact, recently opposed the introduction of toll roads in Nova Scotia and New Brunswick as they would raise the cost of goods and punish an already poor province.
It seems, however, that provincial roads and ferries are not treated equally as parts of the highway system. There is no charge for the construction costs of a road but there is for a ferry. There is a charge for travelling on a ferry that there is not for travelling on a road - road travel is considered a private cost to be borne by the traveller, be it a million dollars or none at all. Similarly, though there is no charge for the running costs (upkeep, etc.) of a road, the charge for a ferry is meant to contribute to these expenses. Roads are treated as general benefits to be paid from general revenue, but ferries are seemingly considered to benefit only those who travel on them and ferry users are expected to contribute to the ferries' expenses. Yet many communities formerly linked by ferry are now linked by roads or causeways without being charged for their road links and certainly with no capital-cost recovery. It is ironical that if a causeway were to be built to Bell Island, at enormous cost, the residents would not be required to pay one penny towards it.
EXPECTED SOCIAL AND ECONOMIC EFFECTS OF RATE INCREASES
The consultants held a hearing on this subject at Wabana on January 13th, 1999 at which written and oral briefs were presented setting out the anticipated social and economic effects of ferry-rate increases on Bell Island. Many presenters observed that the effects of these increases will run counter to the benefits of many other government policies in education, health, social welfare, tourism and rural self-sufficiency. We single out the perspective of one presenter in particular. He referred to the provincial government's Strategic Social Plan, which talks of strengthening communities and regions to become more self-sustaining, and observed that the case of Bell Island gives a chance to put these aims into practice.
Many presenters set out the general social and economic effects that they expected higher ferry rates to have on Bell Island and Mayor Gosine observed that these concerns have been expressed for more than twenty years without ever being laid to rest. Fears were expressed that higher ferry rates would have the following consequences for Bell Island:
* Raise travelling costs, already $85 per week for some commuters
* Increase the cost of living
* Draw disposable income from the local economy
* Create a disincentive to gainful employment
* Discourage and make more costly the pursuit of higher education
* Lead marginal-income workers to seek income support
* Discourage retirees from returning to the island
* Encourage out-migration
* Lower the quality of schooling
* Lower the standard of health care
* Reduce access to services on the mainland
* Significantly reduce recreational services, especially at the arena and other sporting venues, which are large contributors to the local economy
* Threaten the future of the arena and the activities that it supports
* Weaken local business, depress retail sales and threaten the profitability of the driving school and the fishplant
* Thwart efforts to strengthen tourism
In a written brief one presenter summarized the effects of higher ferry rates as follows:
"A combination of a sustainable tourism industry with the Wabana Complex and the many potential economic development opportunities will bolster the Bell Island economy thus creating much needed employment opportunities and restoring a sense of pride and dignity for the residents of the island. This will only occur if the ferry rates are kept at a level, which entice both businesses and tourists to come to Bell Island. The IAS Committee feels that the provincial government should delay the implementation of any ferry rate increases until an assessment of the impact of these increases is undertaken. The proposed increases will have a devastating impact on social and economic development and should therefore be studied in greater detail".
Presenters observed that these consequences of ferry-rate policy run counter to other government policies regarding the promotion of rural self-sufficiency, higher education and tourism and the intended gains from reforms of the educational and health systems.
We will single out three briefs for particular attention, not because their content was more important than that of the others but because they illustrate the interconnection of government policies to which many of the presenters referred:
Mr. William Clarke (principal, St. Augustine's School) pointed out that the school system is already suffering from declining enrollments and high levels of poverty. Higher ferry rates will only make these worse, make schooling more difficult and lead to the creation of a second-class educational system; this works against the intended effects of school reform.
Mr. Clarke further observed that Bell Island is closely associated with St. John's. The school system is part of the St. John's East School Board, Bell Island sports teams compete in the St. John's leagues, many teachers commute to Bell Island from St. John's and the local school system relies upon St. John's for many educational activities and programmes. It is already difficult to recruit and retain specialist teachers, most of whom are drawn from St. John's, and higher fares will only make this more difficult. Lastly, he observed that Bell Island's is unique among ferries in that it is part of the greater St. John's district and therefore calls for a unique fare structure.
Mr. Gordon Skanes (chairman, Bell Island Heritage Society) outlined the success of the society's tours of the abandoned no.2 iron ore mine and spoke of the role of the ferry in advancing or obstructing successful expansion of tourism. Despite a late start to the season the mine tours attracted more than 3,000 visitors, mostly from Canada but some from other countries. A theatrical group, First Light Productions, performed in mine-related productions on summer weekends, drawing a further 700 visitors. Outside the tourist season group tours were provided, drawing 700 more visitors. In all, in a short season and without advertising, the mine tours drew more than 4,000 visitors in 1998. With advertising, the society hopes for 10,000 visitors in 1999 and for further growth for the next 5 or 10 years.
Mr. Skanes observed that the success of the mine tours rested largely upon the extent to which - and the price at which - the ferry service could accommodate the tourist traffic. A two-ferry service in summer, 1998 could have doubled the number of visitors; reasonable ferry rates are also essential. Any other policy cancels out the benefits of the large sums that government departments are investing in the enhancement of the local tourist industry. Group tours are not offered in summer - and they have avoided tapping the convention market - because a single ferry cannot accommodate large parties of visitors in the busy season.
Mr. Edward Kent (advisor, Ferry Users' Committee) presented a written submission on the effects of higher ferry rates upon income support costs and caseloads. He represented that rates will increase the Government’s income support budgets.
Existing recipients: there are some 550 able-bodied recipients on Bell Island and higher transport costs make it uneconomical for them to accept work that requires travel, although Human Resources and Employment offers some assistance for the ferry rate component of a travel cost which is upwards of $85 per week.
Commuting workers: the Users’ Committee estimates that over 400 commuter passes were issued in 1998. Many commuters earn low wages and already pay $50 to $100 weekly in travelling costs. Higher ferry rates will add to this and cause some to abandon work for reliance on income support.
Local workers: over 450 people work on Bell Island. Higher ferry rates will take money out of the local economy, causing employers to lay off staff and creating a disincentive to businesses to maintain local employment - even to remain in business themselves. All of this will lead to higher local unemployment, leading to higher income support costs.
Mr. Kent further observed that only a small increase in the income support caseload would be enough to cancel out the expected increase in ferry revenues from the rate increase. He summarized his observations through the following table:
Workforce
Gov’t cost
Workforce group
numbers
to support
Employed on Bell Island 450 n/a
Employed St. John's region,
daily & weekly commuters 300
n/a
Employed in 1998 part time,
now on EI
390 1140
$2,200,000
Under 25 - youth unemployed 150 n/a
Able-bodied on income support 550 5,200,000
In training programs
200
2040
$7,400,000
Mr. Kent concluded that an affordable ferry service and accessible, good-quality ferry services contribute to sustaining over 1,100 people in jobs, who would otherwise seek income support. Further, $7.4 million is being spent to maintain others who are not working; the cost for each on income support would be $12,000. Consequently, the $600,000 in ferry revenues is less than 10 per cent of income support funding and initiatives to double or triple the ferry rates would be penny wise and pound foolish. If proposed rate increases were to be implemented it would come at the cost of jeopardizing an existing 1,140 jobs, drive up income support spending, discourage the unemployed from seeking work and will likely lead to further depopulation of Bell Island. The consultants fully concur with these arguments.
CONCLUSIONS
We have proceeded from the following grounds:
(1) That ferries and roads are equally parts of the provincial highway system, one no more and no less than the other;
That the Bell Island ferry is a unique case because it is the only commuter ferry and therefore requires special treatment;
That what is needed for Bell Island is a development-oriented policy on ferry rates, one that would seek to revitalize rural communities, increase employment, stimulate business and promote tourism. Critical to this development is ready access for Bell Island residents to the rest of the St. John's region.
That having been said, what should ferry rates be? We have said that ferries should be treated as roads and there is no charge for using, building or maintaining a road. Should ferries then also be free? There is a case for a small charge to be made for using a ferry, just as in similar cases a charge is made to the road user - not when one drives the car, but when one parks it on busy streets. Free goods tend to be overused and, where space is limited, a small charge assures efficient use of space. Similarly, space on a ferry is limited and a small deterrent charge should be imposed to restrict its use to bona-fide travellers.
On these grounds there is no case for raising the current rates. We think, in fact, that they should be lower. The lower the rates can be set, the better for the development of the island's economy. Lower rates need not lead to lower revenues because in the long run, development may increase revenues.
The provincial ferry policy is at odds with the intent of People, Partners and Prosperity: A Strategic Social Plan for Newfoundland and Labrador. This social plan which complements the province’s economic strategy strongly advocates policies that support the economic viability, social vitality and political efficacy of communities like Bell Island. Government ferry policy violates the spirit and intent of this plan. Specific policies favouring people and communities have to operationalize and substantiate the rhetoric of this important document.
(2) Ferry policy by the Department of Works, Services and Transportation appears to be developed in isolation from other government departments such as Human Resources and Employment, Department of Development and Rural Renewal and Human Resources Development Canada. Decisions taken by the Department of Works, Services and Transportation regarding ferry rates are often in conflict with or undermine initiatives by other government departments and agencies.
(3) Intra-provincial ferry policy is not consistent with the provincial government’s position on the Gulf ferry or with recent statements by the premier opposing tariffs on the highway through New Brunswick and Nova Scotia and more recent comments by Minister Woodford on the inadequacies of the Gulf service.
(4) Intra-provincial ferry rates in Newfoundland and Labrador are more burdensome and less favourable to people and communities than those of other governments in Atlantic Canada and Quebec.
(5) In the absence of an equivalent cost of road travel per kilometer rate, the policy-making process and the rate structure itself, particularly the minimum tariff, is arbitrary and there is no mechanism for formal public input.
(6) The Bell Island ferry system is an important transportation link in the overall St. John’s regional system and the benefits accrue not only to Bell Island but to other communities and the region in general.
(7) In setting future rates and funding ferry service levels, users of the Bell Island ferry service should be given full credit for significant expenditure reductions already agreed to in lieu of rate increases.
(8) Employment initiatives are essential to address the need for stable employment for over 1000 people unemployed representing over 50% of the potential workforce.
(9) A less costly and perhaps wiser policy for Government is to invest money in a ferry service rather than deal with the negative consequences of a harsh ferry policy.
(10) The proposed rate structure creates a disincentive for the workers on/from Bell Island. A more development-oriented policy is needed. The present policy is a threat to new and existing businesses, tourism, and the maintenance of an employed workforce. Bell Island’s location - on an island near a city - should make it a recreational resort for the region. A development-oriented ferry policy is needed to bring this about. Bell Island already has much infrastructure, a growing tourism industry, and inexpensive land and houses.
(11) The Bell Island ferry system is unique. Bell Island is a bedroom community of St. John’s. The ferry service links Bell Island with the City of St. John’s and the larger, wider Avalon region which has more than 50% of the province’s population. Frequent users should benefit from discount rates.
(12) There is strong support throughout the province for an equivalent cost of road travel per kilometer rate not only from communities utilizing intra-provincial ferries, but also from provincial bodies such as the Federation of Municipalities and the Newfoundland and Labrador Federation of Co-operatives.
(13) The present ferry policy negatively impacts the social vitality of Bell Island. It denies an equal opportunity for people of Bell Island to participate in regional arts, cultural, and recreational activities.
RECOMMENDATIONS
- That Government adopt a province-wide policy of ferry rates based on the equivalent cost of road travel per kilometer (currently recognized to be in the range of $0.35/km).
- That the ferry rate per kilometer rate be based uniformly on each kilometer with no front end or minimum charge load.
- That for the unique Bell Island daily commuter service, a development-oriented policy for frequent users be adopted at one third of the regular rate.
- That as part of the development-oriented policy that rates be classified and established reflecting the need to revitalize rural communities, increase employment, reduce Government income support spending, and stimulate business and tourism.
- In future years, notwithstanding the above, there are obvious contradictions and conflicts in Government policies on capital transportation fixed cost recovery policies for roads, ferries and causeways with respect to fares and tolls. Included in these conflicts would be Government’s position on new roads/causeways replacing ferries, Marine Atlantic Gulf rates, new major trunk highways costs, versus capital cost recovery for ferries’ capital expenditures. In setting future rates, Government must be equitable and reconcile these contradictions. Future reviews of ferry rate policy should also be undertaken with significant input from local user groups, consideration of impacts of ferry rate increases on other Government Departments and affected communities, and with an independence and scope incorporating Government’s overall social and economic policies.
- That in setting future rates, Government should grant full credit to the Bell Island service for ferry service spending reductions of upwards of $700,000 achieved in lieu of rate increases, either in rate reductions or restored or improved ferry service.
- In light of the apparent 50% plus unofficial unemployment rate and over $7,000,000 yearly transferred to approximately over 1000 unemployed on Bell Island in income support, it would be in Government’s best interests to target employment initiatives towards these people to help assist them acquire stable employment. To be successful, employment initiatives must be supported by affordable ferry rates and an efficient accessible ferry service.
