Tag: rates

Newfoundland Ferry Rates – a provincial election issue?

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Transport Action Atlantic is an all-volunteer non-partisan advocacy organization, with a history dating back nearly half a century. Our mandate is to promote and campaign for convenient, affordable and sustainable public transportation services for Atlantic Canadians. That’s why we’re asking what we believe is an important question during the current Newfoundland and Labrador election campaign.

TAA has been increasingly concerned at the serious escalation in Marine Atlantic ferry rates, which have more than doubled over the past two decades because of increased cost recovery demands from Transport Canada. An updated backgrounder on this issue is available HERE.

Why should a federally funded ferry service be an issue in a provincial election? Because it’s apparent that the Government of Canada is not meeting its obligations under the 1949 Terms of Union, and provincial politicians should be taking them to task.

We are inviting parties and candidates in this campaign to present their views on this critical issue. TAA believes that the ferry service between Port aux Basques and North Sydney should be considered a part of the Trans Canada Highway, and that the cost to users should be comparable to driving the same 180-km distance. That principle was incorporated in the 1949 Terms of Union, under which Newfoundland and Labrador became Canada’s tenth province, which specifically addressed railway rates as that was the dominant transport mode at the time. Highway has now completely superseded rail, but we maintain that the spirit in which the Terms of Union were originally drafted should be fully respected. The Government of Canada appears unwilling to do this – despite a commitment made by Justin Trudeau as opposition leader prior to the 2015 federal election. Clearly, it falls to provincial politicians to speak out and demand that Ottawa meet its constitutional obligations.

In the aftermath of the COVID-19 pandemic, with air transportation in serious crisis and unlikely to recover in the near future, affordable ferry service is particularly important to the struggling tourism sector. If the Atlantic Bubble is restored by summer 2021, Marine Atlantic will be uniquely positioned to bring significant numbers of visitors from the Maritimes – if the price is right.

Accordingly, we are requesting answers to these questions:

1.         Does your party support the principle that the ferry service between Port aux Basques and North Sydney is a part of the Trans Canada Highway, and as such the cost to users should be comparable to travelling the equivalent distance by road?

2.         Regardless of the outcome of the February 13 provincial election, will your party demand a full review of the existing Marine Atlantic ferry rates to ensure that the Government of Canada is compliant with the spirit of the 1949 Terms of Union?

TAA has sent the above questions to the parties, and we are awaiting their responses. Meanwhile, we suggest that voters who are concerned about ferry rates should engage their local candidates on the issue.

Ideas in Motion: Federal Ferry Rates – a Newfoundland election issue

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Why would a federally-funded ferry service be a provincial election issue? It’s really quite simple! Canada has a constitutional obligation under the 1949 Terms of Union to provide a reliable and affordable ferry service between North Sydney and Port aux Basques, but the cost to users has been surging rapidly upwards at an alarming rate. The Government of Newfoundland and Labrador must be vigilant to ensure that this federal responsibility is respected.

It’s been nearly 72 years since Newfoundland and Labrador became Canada’s tenth province, completing Confederation from sea to sea. Transportation was a key concern for the people who designed the Terms of Union – and cost was an essential factor. Accordingly, Term 32 obligated Canada to provide a ferry service between North Sydney and Port aux Basques, while providing assurance against the higher cost of living resulting from geography. Specifically, framed in conformity with the dominant transportation mode of the day, the 100-nautical-mile marine route was to be rated as an all-rail movement. The additional handling and operational costs of the ferry service were to be absorbed by the Government of Canada through Crown-owned Canadian National Railways. In simple terms, the Cabot Strait crossing was treated as if it were a bridge.

Much has changed in the intervening years. The narrow-gauge Newfoundland rail line was abandoned in 1988; the railway passenger service on the island had been discontinued two decades previously. Traffic on the “constitutional” ferry route is now all highway-based.  But the basic principle of Term 32 remains. While road has replaced rail, the ferry service operated by the federal Crown corporation Marine Atlantic Inc. (MAI) must be viewed in the contemporary sense as an extension of the Trans Canada Highway. If the spirit in which the Terms of Union were drafted is to be respected, vehicles crossing the Cabot Strait should be charged no more than the cost of driving them 180 kilometres by highway. Arguably, there should be no additional fares for commercial drivers or the occupants of passenger vehicles. It is significant that these extra costs do not apply to users of the Confederation Bridge to Prince Edward Island, which is also a constitutional obligation of the Government of Canada.

Over time, the best intentions of the latter-day Fathers of Confederation have been eroded. In the past two decades Marine Atlantic’s rates have more than doubled – an increase greater than three times the national inflation rate. Security fees and fuel surcharges have also been added. Notably, there are no such additional costs to users of the Confederation Bridge, where tolls are tied to the cost of living index.

Under the previous Conservative government, Transport Canada imposed a cost recovery target of 65% on MAI. This has remained unchanged under the current Liberal administration – despite a campaign commitment by Justin Trudeau in 2015 that termed the existing cost recovery requirement as “unreasonable” and pledged to address it if elected. It’s a promise that has not been fulfilled, and ferry rates have continued to rise in excess of the cost of living index.

Transport Action Atlantic believes the spirit of the Terms of Union that made Newfoundland and Labrador a part of Canada should be respected, and that Term 32 must be viewed in a modernized context. The ferry crossing of the Cabot Strait is part of the Trans Canada Highway, and should cost users no more than driving the equivalent distance by road. This is an obligation assumed by the Government of Canada in 1949, and remains as valid today as it did then – notwithstanding the passage of time and changes in transportation technology.

With the federal government’s reluctance to address the issue, TAA believes that provincial politicians should be demanding answers. Unless there is a strong call for action from within the province, Ottawa clearly will not treat it as a priority. Recent talk about an undersea tunnel crossing of the Strait of Belle Isle should not be used as an excuse to delay dealing with the serious issue of ferry rates. Even if a “fixed crossing” between Newfoundland and the mainland is demonstrated to be feasible, its construction would lie many years in the future. Today’s ferry rates, by the Prime Minister’s own admission, are much higher than they should be – and immediate action is required. We are therefore inviting all parties in the 2021 provincial election to present their position on this important matter.

January 27, 2021

Marine Atlantic cost recovery reaches 70% – Corporation holds annual public meeting

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Marine Atlantic’s customer satisfaction levels and on-time performance continue to improve – but the cost recovery targets demanded by Transport Canada continue to soar.

Marine Atlantic’s customer satisfaction rates increased to 77 per cent during the 12-month period ending March 31, 2017, and on-time performance rates improved to 91 per cent.  The vessel reliability rate stood at 99 per cent, and the Newfoundland ferry service recorded its second consecutive year of growth, the first back-to-back passenger increases in almost two decades.

There was quite a bit of good news to report as the Crown corporation held its annual public meeting in St. John’s on November 6.  However, there was one very sobering statistic presented by board chair Kris Parsons and CEO Paul Griffin.  During the last fiscal year, Marine Atlantic achieved a record 70 per cent cost recovery, “falling within the targeted range as directed by the Government of Canada.”  It generated $111.7 million in revenue, while the service cost $209.4 million to operate. The federal subsidy for the year was $94 million.

The cost recovery ratio has risen steadily over the past two decades, climbing from approximately 45 per cent in the late 1990s.  During that period, user rates have soared at triple the national inflation rate – in sharp contrast to tolls on PEI’s Confederation Bridge, which are tied to the cost-of-living index.

During the last federal election campaign, Liberal Leader Justin Trudeau publicly lambasted the Harper Tories for their fixation on cost recovery for the ferry service, and promised that a Liberal government would address the issue.  They haven’t:  Since the election there have been two rate increases at Marine Atlantic – both well in excess of the cost-of-living index.  A third is anticipated for 2018, although it had not been announced as of this writing.

 

– Ted Bartlett