Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Posts Tagged ‘BC Ferries

“Greens support a referendum on how we fund transit”

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The title is a tweet by @Vangreens. I am a member of the Vancouver Green Party and I have supported their current campaign – although as I did not pay $100 or more, that does not show up in their public declaration. This blog post is my response to the tweet, simply because there isn’t a way to say this diplomatically in 140 characters.

I do NOT support a referendum for transit. On the whole the move towards more direct democracy has been used by right wing ideologues who think that voters hate paying taxes and will vote them down. Seattle, of course, is now being cited as a success. Indeed of the transit questions on the US ballots in the most recent midterm elections, voters said Yes on 65% of them. That’s not bad, but I do not take a lot of comfort from it.

As many people have pointed out, there was no suggestion of a referendum for the widening of Highway#1, Port Mann Bridge, SFPR package. Nor will there be one for the replacement of the Massey Tunnel. There wasn’t going to be a referendum on BC Ferries either, but I was very impressed indeed with the speed with which Todd Stone moved to quash the idea that the ferry from Horseshoe Bay to Nanaimo might be cancelled. And that after the BC Liberals had tried to pretend that making the organisation a company rather than a crown corporation would reduce political interference. Which, of course, is still rampant at BC Hydro and ICBC which have both been used as (regressive) revenue sources to replace fairer taxes.

It seems to have been generally accepted in the mainstream media than “money is tight”. For instance, CBC tv news a few nights ago was looking at why school playgrounds must be paid for through PAC fundraising and not taxes. Money is not tight at all. We are so flush with it that we are paying over the odds for money borrowed for infrastructure projects. BC bonds would pay 4%: going through the P3 process means we now pay 7%. The Auditor General is not impressed.

The terms of the “transit” referendum have not yet been announced, although the Mayors have set out in detail what the funds would be spent on. We also know that the Province has been busy making sure the question will conform to their policy straight jacket. So the carbon tax is out. The province continues to push for more property tax as well.

If the use of referenda were more widespread and the questions more open, I might be more inclined to support them. But I do not think that it is a good way to increase participation in politics. The questions have to reduced to sound bites, and populism is more likely to win than policy analysis. Not that in our system politicians pay much attention to that, even when they have set up the system themselves (see BC Ferris above).

The need for this region is much more transit. The referendum will be about much more than that. Translink is a transportation agency, which means the province was able to lumber it with a number of problem structures – Patullo, Knight Street and Canoe Pass bridges – all of which were in need of expensive upgrades. The Major Road Network was devised as a way to get support for the new agency from suburban Mayors who were going to get provincial highways downloaded onto them anyway. Some of the questions that got turned down in the US had significant road measures tacked onto the transit elements in an attempt to make them more acceptable to the sort of people who vote. I am afraid that what we have seen so far is that inevitably the referendum will be a way to pass judgement on Translink. Just as the midterms were used to pass judgement on POTUS even though his name was not on any ballot.

I think that in BC we need to see a fairer tax system which extracts more from large corporations and the exceedingly wealthy individuals who have done so well from the tax cuts of recent years. I would like to a general roll back of flat fees and charges for public services, to be replaced by a truly progressive income tax system. Those who can afford to pay should pay more than those who have little. It is time to reset the balance. Inequality has become extreme nearly everywhere. The few countries that have resisted the pressure of the Chicago school have done better economically as a result.

I do not accept that there is no money for transit in Greater Vancouver. I do understand that it is unpopular in a political system where constituencies outside the Lower Mainland have far more electoral power than we do. I also understand that politicians who repeat the mantras of the right will get better treatment in the mainstream media and thus from voters. It does not make them right. There ought NOT to be a referendum and I oppose it. But since there is going to be one anyway, we Greens had better make sure that we get over the pass mark. Note too that there was a referendum, not so long ago, on a better voting system. That followed a remarkable public consultation process, and was supported by more people than opposed it. Just not quite enough to get the supermajority required by those who benefitted most from ignoring both sense and popularity.

Written by Stephen Rees

November 6, 2014 at 11:24 am

The Airport and The Ferries

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Two quite different modes – and the same issue.

The BC Liberals are currently sitting on their hands about the Macatee report on BC Ferries – which ought to make Vaughan Palmer’s exit interview with David Hahn worth watching. (Voice of BC Shaw Cable only 8pm tonight). The policy has been for the corporation to move to user pay – which means that fares have risen, and at the same time loadings have fallen. The corporation now says it needs to cut service to make the books balance – which some people might think would reduce use further, but the corporation points to empty ferries on supposedly socially necessary services.

I was thinking about doing another ferry piece – but maybe I’ve written all I have to say on that – when the news broke of the President of YVR talking to the Board of Trade announcing increased user fees to pay for yet more airport expansion. YVR also has a commercial remit – and has been steadily expanding since it was cut loose by the feds.

Mr. Berg said the “geographical advantage” that YVR has traditionally had, of being the closest, major West Coast terminal to Asia, is being rapidly eroded as new technology gives jets greater range.

Flights can now go direct to Asia from as far east as Toronto and Chicago, he said, showing a map that illustrated how jets arc over the polar region to drop down into a growing number of airports in China.

“With new aircraft and navigational technology, a lot more cities are accessible from Asia today. And these cities have figured out what YVR’s founders knew. Serving as a gateway can bring vast economic benefits to their communities … this [is a] dramatically different competitive landscape than we [faced] 20 years ago,” he said.

Mr. Berg said Edmonton is opening 12 new international gates next month and Calgary is building a new runway and 22 new gates for 2015.

“Neither Calgary nor Edmonton has the passenger traffic to fill those gates today – so guess whose traffic they are looking at?” he said.

Mr. Berg said YVR, which last year was named North America’s best airport at the World Airport Awards in Copenhagen, is fighting back.

But is raising fees the way to win more passengers? I will say that the airport is now much better than when the new arrangements were introduced, and when I visit other places, the contrast to the airport I departed from is usually very instructive. Not many places, for instance, offer free wifi all over the terminal. There is indeed a wider range of food available – but that I think is mostly because so many airlines now charge for airline food, an it is usually much better to buy before you board, not just on price but quality. That being said, the pulled pork sandwich on a fresh baguette I bought at Cancun Airport was better than anything I have eaten at YVR. And I carried half it onto the plane since it was so large, even though on an international flight food is provided at no extra charge. (On Air Transat the wine was free too, even if they did spill most of it on my nice clean khakis.)

Nothing is reported about the expected impact of airport expansion on the environment which might be a bit odd given that this weekend there is to be a protest about the jet fuel pipeline the airport’s fuel supplier wants to build across Richmond.  Other places – like London – have had to look further afield as local protests have stopped expansion i.e. the new proposed new runway at Heathrow. Generally we seem to be remarkably quiet about the impact of YVR. The last major set of complaints I can recall prior to the fuel pipeline coming from some new residents of Richmond who ought to have realized that they were buying property under a flight path.

But the similarity of Han’s and Berg’s approach to their respective jobs – only commercial results matter – make the user pay more should surely have similar results. What the Edmonton and Calgary expansions will do is enable people from those places to make direct flights rather than change planes. Indeed, we seem to be back in the transit debate territory about the inconvenience of transfers and the need for a one seat ride. But in the airline business, the original ploy of making everyone fly through a hub was quite quickly countered with airlines that flew smaller, cheaper to operate planes on direct flights. Indeed on sites like hipmunk you can readily see how competition for your business stacks up  using an indicator they call “agony”. The direct flight moves to the top even if it isn’t cheapest.

I am not at all sure that it is just the airport you leave from that decides the route – but certainly the airport operators at Abbotsford and Bellingham recognize that for a growing number of people having an alternative to YVR is attractive. I look at the border line ups, additional driving/bus or train ride and probable additional hotel night for an early morning flight as being significant deterrents to using SEATAC – but obviously if there is enough trade to fill a direct bus service, enough people disagree with me.

The other phrase that popped into my mind was the one that was used when Britain decided to nationalize parts of its transportation system “wasteful competition”. If we really are facing a continuing economic depression in North America, and pressures on airlines for reduce their environmental impact continue (such as the EU’s imposition of a carbon fee on jet fuel)  the airports could be competing for a static or even shrinking market. So those user fees could be paying for under utilized facilities.

Maybe I just pick times to fly when the planes are cheap, but I am not aware of any congestion at YVR right now. And quite often when I do find myself through the security theatre and with time on my hands, I tend to notice that most of the shops and services are in fact closed. So they may well be priced at the same level as places in town – or even offer things I can’t buy there (at one time book publishers would have things in airport bookshops long before the local stores) but if they aren’t open, my wallet will also stay closed.

For flights within BC the fee remains the same. And an extra $5 on the sort of money that has to be paid these days for longer haul flights may well not register with users. After all, the amount for fees and taxes now usually exceeds the quoted fare. And people are willing to pay more for better, more convenient services. But even so, it seems to me that Berg could be making the same mistake that Hahn did. Except YVR answers to no-one, unlike BC Ferries, which was supposed to be independent but turned out not to be.

UPDATE  31 Jan     It is well worth reading Bill Tieleman’s opinion piece in today’s Tyee

Written by Stephen Rees

January 26, 2012 at 11:30 am

Ferry Fares

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Vaughan Palmer has another big think piece in the Sun today “Opinion: Fares are the albatross around the neck of new BC Ferries boss”

Queen of Surrey

It is, as one has come to expect, thorough and thoughtful. But there is a very surprising omission. The issue as he states is the fares are too high and that if fares were reduced then usage would increase which would increase revenue. But nowhere in the article can I find the term “fares elasticity” or any discussion about what effect changes in fares have had – or might have – in quantified terms.

As it happens, this has been one of the things that, as a transportation economist, I spent a lot of time working on. It is not at all simple and straightforward – few things in life are. Perhaps not quite as difficult to model as the Higgs Boson – but close – but at least we know that fares elasticity actually exists. The jury is still out on the boson. And the fares elasticity for BC Ferries has indeed been the subject of a recent, thorough and objective study by InterVistas for the Ferry Commisioner (that’s a pdf file you might want to save for future reference).

On Page 19 the elasticity for the major routes is stated to be

  • Ferry demand depends on the price of ferry services, with a price elasticity of roughly -0.28.
  • Ferry demand depends on GDP growth (or reduction) with an elasticity of roughly +0.21.
  • No discernable impact of population on ferry demand is apparent, at least with this data set.
  • The seasonality effect in the total ferry traffic is strong and significant. It dominates the model.Seasonality alone explains 99% of the variation in the quarterly data.

And then the report goes on to examine the other routes

At this stage, I am not going to get into the analysis, except to make a couple of observations. All economic forecasts are based on the caveat “other things being equal” and in real life they never are. Secondly, the consultants were looking at the potential revenue from fare increases i.e how much usage is lost when the price goes up. Elasticities cannot be assumed to be symmetrical. For an order of magnitude estimates, they are not bad, but people react differently to a price cut than a price increase. That is due to the law of diminishing marginal returns – buying twice as much of something doesn’t make you twice as happy even if you got a two for one deal. The second thing you bought was not as rewarding to you as the first and thus not worth as much.

But even so, for an opinion piece in the Sun, and the ease of finding this information, Palmer’s questions can indeed be answered. Now, at this stage I am not going to get into the complexities of the ferry routes and what ought to happen. My point at the moment is the simple one: Palmer should have found this report and ought to have referenced it. But maybe, like me, he does not have the time at present to read the entire thing, or have the energy to actually work out for the new ferry CEO what the answers to these sums look like. But clearly they fall into the category of “known unknowns” right now.

Maybe, when I have a bit more time I can return to this subject, but I am surprised that I have not got more response on the ferry issue in general.

Written by Stephen Rees

December 10, 2011 at 1:50 pm

‘A lost transit opportunity’

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Pacific Coach 3004 Swartz Bay 2008_0926

What appears to be an article in the Times Colonist is uncreditted, and reads like a letter to the editor from an all ill informed reader. A journalist writing such a story would at the very least pick up a phone and call Translink’s press office. There is no express service from the Ferry to Vancouver because of a long standing agreement with Pacific Coach Lines. They operate the coach service between Victoria and Vancouver which gets carried on the ferry. This service is commercial so fares are higher than transit as there is no subsidy. People are prepared to pay more for the greater speed and convenience. Translink (and its predecessor BC Transit) agreed not to run direct bus services between the ferry and downtown as that would abstract PCL’s traffic. Using public funds to compete head to head with private companies is not allowed.    The existing #620 is a distinct improvement over the old #640 – which required Vancouver bound passengers to change at Ladner (although you could still do that and get a #601) but most people currently ride all the way to “Airport Station” and change there for the #98 B-Line or the #424 to the airport itself.

Increasing ferry fares have had the effect of encouraging walk on passengers, with a considerable rise in the number if drop offs and pick ups at the terminal in private cars (“Kiss and Ride” in US transit parlance) but also of transit use. BC Transit does offer express service to downtown Victoria from Swartz Bay – quite why they are not covered by the PCL non-compete agreement I do not know. CMBC has on occasions put on express services when loadings were exceptionally heavy – presumably when PCL was overloaded too.

There is also the argument that transit subsidies are not intended for inter city travel, but solely for travel within the transit operation’s boundary. Cross boundary services with neighbouring operations were always regarded with caution. After all, Greyhound gets no subsidy for its operations – which is why fares to so many small places within BC are so high. If we actually cared about greenhouse gas emissions more than private sector profits then these policies might be reviewed – but don’t hold your breath on that one either.

BC Transit Dennis Trident Victoria BC 2007_0909

Written by Stephen Rees

August 20, 2009 at 9:22 am

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BC Ferries, TransLink not bound by recommendations in government review

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There’s more reaction to the Province’s announcement of a review – this time from the agencies themselves.

Both point out that as so called “independent” bodies they are not bound by the findings of the review. The government cannot tell them what to do. Both BC Ferries and TransLink were set up to operate independently, with no government interference agrees Minister Shirley Bond, who is further quoted

“Having said that, I find that an interesting response,” she said …

“So I would assume, and I think most taxpayers would expect, that if this review actually demonstrates ways to use dollars more efficiently or in fact we could find savings, that of course BC Ferries and TransLink would want to adopt those recommendations,” she said.

So Comptroller General Cheryl Wenezenki-Yolland in the space of three months, looking at two agencies operating in a complex environment and facing difficult challenges for many years is going to find savings that those agencies have missed? And anyway she has already been given clear direction that her target is to be executive compensation – even though in terms of the overall spending that cannot achieve very much and anyway is determined by outside consultants with detailed data on executive compensation. Something the CG will not haver access to unless she is prepared to pay for access to the same data sources to get the same answers.

Of course there are always ways to cut costs – but that may not be a very sensible thing to do. For instance, it is clear that in Washington DC as a way of keeping costs down, the metro operator allowed its signalling system to deteriorate and continued to operate old equipment that needed either upgrade or replacement. Yes it made the books balance for a while but it looks like that decision cost lives – or rather will probably look like that once the final reports of safety authorities are in. You can also point to all kinds of things in the collective agreement of CMBC which would result in operational savings – but do you really want to go battle with the CAW again?

This review is not really about “finding savings” – it is a diversionary tactic and an implied threat to the agencies to fall in line with the wishes of the Province. Or rather Translink – BC Ferries was just added to make it look more objective. But as Prendergast has demonstrated he can get a job somewhere else – and maybe get an even better deal. Why would he want to hold on to a job where he was expected to take a hit just for PR effect for the government’s short term gain? And what would that do to Translink’s ability to replace him? Of course the professional board will want to demonstrate that it really is independent – and also to continue to hold up the argument that they are doing a really good job running the place. Wenezenki-Yolland has not got an enviable task – and do not be surprised if her report is predictable and just filed away like so many other “reviews”.

UPDATE July 30 2:53pm

You can also read what Jim Sinclair has to say on his Vancouver sun blog – predictable but true. And the headline writer seems to have a better way of sparking attention

Written by Stephen Rees

July 30, 2009 at 9:58 am

“The governing party has lost much of its enthusiasm for privatization”

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This is not the headline chosen by the subs at the Sun for a Vaughan Palmer opinion piece. But it is his remarkable conclusion after analyzing why BC Ferries have not seen “alternative service delivery” or more competition.

Even the Washington Group’s proposal to use the fast ferries forn a service from Vancouyver to Nanaimo did not start, and of course Harbour Lynx on the same route folded when it found that a ferry service with only one vessel was too vulnerable to happenstance.

I see no evidence outside of BC Ferries to support Palmer’s conclusion. Although it is similar to the experience of ICBC – which was thought to be on the block but has proved too useful. Such a fate did not befall BC Hydro – where the potential profits from exporting power to California are still so mouthwatering to the private sector that the province’s long term policies for electricity supply were simply thrown away. And of course the expected extension of privatisation in the health care sector stalled too.

Given the economic and political fallout so far, I am surprised that they have stuck to their guns, but pig headedness is still considered a virtue by the right wing. And of course still bedevils transport policy. Elsewhere in the world privatisation is slowly being unwound. The French have announced that they will take water supply back into the public sector – and it has been priavte there for 100 years! The British have been taking back bits of their transport system – starting with the national railway track and chunks of the London Underground. And the worldwide banking crisis (or “credit cruch”) is severely limiting what new projects can be financed this way. Although public sector employee pension funds are still looking for safe bets for their money, and “risks” backed up by recourse to taxpayers still look pretty good from their point of view.

When the special office for selling things off (“Partnerships BC” – a wonderful example of newspeak) is shut down, then I will agree with Mr Palmer. But we can be expected to pay for the Liberals enthusiasm for many years to come on the projects now underway – and to come.

Written by Stephen Rees

August 16, 2008 at 10:41 am

Posted in privatisation

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