PRESS RELEASE: Stone’s Boatload of Ferry Fiction on the Discovery Coast

“We don’t believe it makes a lot of sense… to invest 100 million dollars in a new vessel on this particular route.” – Transportation Minister Todd Stone

Transportation Minister Todd Stone suggests that he is saving new vessel costs of $100 million by replacing the Queen of Chilliwack with the Nimpkish on the Discovery Coast. But BC Ferries expects to retire the Nimpkish by 2018 according to the recently released Capital Plan. In other words, he replaced a vessel that was due to be replaced by 2018, with a smaller, less capable vessel that is also due to be replaced by 2018.

“The government still has a ferry to replace in 2018,” said Petrus Rykes, Chair of Save the Discovery Coast Ferry. “Only now, we’ve lost the $16 million spent refurbishing the Queen of Chilliwack, and they’re using a vessel that’s actively driving away tourists and destroying the local economy at the same time.”

There are other indications Minister Stone is either incompetent or purposely misrepresenting the truth regarding this decision:

  • In an effort to fight declining ferry passenger traffic, Stone made cuts that have resulted in a 46% reduction in passenger traffic.
  • In an effort to improve a 25-30% ferry utilization rate, Stone cut the sections of the Discovery Coast route with the highest utilization rates and preserved the sections with the lowest utilization rates.
  • He continues to insist the route costs the government $7 million every year to operate. Not true. BC Ferries data shows the $7 million in losses he’s talking about were in fact one-time charges resulting from the $16 million spent on upgrading the Queen of Chilliwack. Without those costs, the 5-year average loss is closer to $3 million including capital cost write-offs, or an actual loss from operations of only $2.6 million.
  • Stone also suggests his cuts will eliminate a $2500 per vehicle subsidy. But numbers from BC Ferries show the average subsidy on Route 40 since 2003 is only $850, not $2500, and Stone’s cuts were intended to save only 10% of that. So the real savings is $85 or less.

“The Minister could not make more harmful decisions even if he was actively trying to. And now he’s twisting the facts about them,” said Rykes. “So what is his purpose here? Is he trying to save money? So far there are no appreciable savings for BC Ferries, but instead he’s created a huge loss to the economy. Stone needs to start acting like a Minister of the Crown, and start making decisions that benefit the people of this province. Stubbornly clinging to false statements is not helping anyone.”

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Economic Impact Study in the News

There has been a lot of coverage of the release of our Economic Impact Study. Read a selection of reports here.

Globe & Mail

Stephen Hume’s article in Vancouver Sun

Global News

Global TV video report

Kelowna Daily Courier

Kelowna Now

CTV Vancouver

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Raeside’s View

A beautiful take on the current situation from the brilliant mind of Adrian Raeside.

Adrian Raeside' editorial cartoon

Adrian Raeside’ editorial cartoon

Visit the Times Colonist to view Raeside’s cartoon.

Check out more editorial cartoons on Raeside’s website.

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RELEASE: Wrong Numbers, Mr. Stone

Transportation Minister Todd Stone continues to use numbers shown months ago to be incorrect, indicating the Minister simply cannot accept the economic reality he is responsible for creating. The only portfolio less suited to Stone’s abilities would be Education, as he clearly does not understand math.

In response to a study proving his errors have caused a loss of $3.9 million in tourism revenue and $870,000 in lost taxes, Minister Stone once again has trotted out fabrications and deception that were disproven as far back as April. The Minister is either willfully misleading or incompetent in his assertions.

Stone repeatedly talks about a $2500 per vehicle subsidy along Route 40, but these numbers are cherry-picked from 2012, a year when BC Ferries wrote off a lot of capital costs and debt service, one-time charges that temporarily tripled the shortfall. The average subsidy on Route 40 since 2003 is only $850 per vehicle, not the $2500 number Minister Stone quotes. That’s like quoting tourism numbers from 2010 without mentioning the Olympics.

He also suggests that his cuts have eliminated this subsidy. Except Stone did not eliminate Route 40, just the part of the route that was the most profitable, meaning that the most his cuts would have saved was $250 per vehicle, not $2500.

Minister Stone also claims the route “historically” loses over $7 million every year, but the numbers released in March 2014 (covering the summer 2013 season) showed a total loss of only $3.4 million including capital cost write-offs, less than half the amount Stone quotes today, and the actual loss from operations was only $2.6 million. These figures are in line with the five year average for the route, once again proving that he is cherry-picking inflated figures rather than revealing the real data.

The Minister asserts the route had a utilization rate of 25-30%, but the part of the route he eliminated had a utilization rate of 48%, in line with the average across the entire BC Ferries fleet. This means Stone’s cuts will actually result in worse utilization rates.

While Minister Stone thinks the subsidy is a major issue, Premier Christy Clark disagrees. As a talk show host, she said, “That’s the thing that I don’t get about the subsidy argument… why don’t they say that they’re subsidizing people who live in Whistler by the massive expansion of the Sea to Sky Highway?” Clark also knows ministers are hiding the full story when they talk about subsidies, asking, “Why don’t they do that – apply the same math to the highways that they build and then maintain – that they do to the ferry routes?”

In Minister Stone’s case, the answer is simple. He’s not applying the same math because he can’t make his own numbers add up.

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RELEASE: Ferry Cuts Causing Losses Well in Excess of Savings: Study

(Download the Discovery Coast Tourism EIA study.)

A shortsighted attempt by BC Ferries to save $725,000 has resulted instead in a $3.9 million loss of tourism revenue, according to an economic impact study released Monday, with the losses expected to continue to mount in future years.

The West Chilcotin Tourism Association commissioned the study to determine the economic impact of changes the government made to the Discovery Coast ferry service. The study found huge losses in revenue and taxation, negative visitor impressions, and widespread cancellations of international bookings.

“The government did not undertake a single economic study before making these reckless cuts. Not one,” said Petrus Rykes, Vice-President of the West Chilcotin Tourism Association. “This is the first comprehensive review of the impact these changes have had, and it confirms our worst fears. The government has managed to cost itself money, not save it.”

Among the key findings, the study reported:

• Total same-day ridership between Port Hardy and Bella Coola declined by 46%, from 4,995 passengers to 2,696.
• Gross tourism losses are estimated at $3.9 million, which equates to a gross GDP loss of $1.7 million
• Factoring in indirect and induced economic impacts, the annual gross GDP losses multiplied to $3.3 million
• The direct taxation loss on this revenue amounts to $870,000 per year
• Service reductions resulted in the estimated loss of 37 tourism jobs this year.
• Average visitor satisfaction scored 2.65 out of 5, compared to the BC Ferries average of 4.17 out of 5.
• The Net Promoter Score (NPS) for the MV Nimpkish was -34. NPS measures how likely customers are to promote the business to others, where the average for healthy businesses is +24. Businesses that score below +5 are considered to be facing severe market share challenges.
• An estimated 41% of the region’s businesses lost most or all of their tour & wholesaler bookings.
• 19% of businesses indicated foreclosure is a near-term possibility due to inadequate regional ferry service

“Transportation Minister Todd Stone gutted tourism in this region with these cuts, and the bleeding is going to continue for years if it’s not stopped,” said Rykes. “There are phenomenal growth opportunities for tourism here, if the government would only stop being hostile to its own best interests and the best interests of the region.”

Download the Discovery Coast Tourism EIA study.

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PRESS RELEASE: Study Shows Ferry Route Change Cost Economy Millions

An explosive new economic impact analysis promises to demonstrate the BC Government’s decision to cut the Discovery Coast Route 40 ferry service was shortsighted and destructive to the local economy and tourism. Not only have the oft-touted savings not materialized, it has caused financial damage to the provincial economy that might take years to recover.

The Larose Research & Strategy study, prepared for the West Chilcotin Tourism Association, will be released in full on Monday November 17th, but early findings indicate Transportation Minister Todd Stone has cost BC taxpayers millions in his attempt to save thousands.

Among the key findings, reducing vehicle capacity on the vital Port Hardy-Bella Coola run by 92% has helped cut total ridership almost in half, from 4,995 passengers in 2013 to 2,696 passengers in 2014. Gross tourism revenue losses from this decline are projected at approximately $3.9 million for the year.

“Minister Stone announced these changes as a way for BC Ferries to save $725,000. But even those meagre savings disappeared when they realized they had to maintain a Circle Tour link between Port Hardy and Bella Coola,” said Petrus Rykes, Vice President of West Chilcotin Tourism Association. “So BC Ferries didn’t save anything, and the tourism industry lost millions. Who did this benefit?”

Tourism operators are facing more bleak times ahead, as reviews from this year’s visitors are beginning to spread. Visitor experiences for the MV Nimpkish, the replacement ferry on the modified Discovery Coast Connector service, were surveyed using Net Promoter, a worldwide measurement standard for customer experience. While the industry average score is +24 and businesses scoring below +10 are considered challenged, the Nimpkish rated a -34. This means that 34% more visitors would actively detract from the service compared with those who would promote it to others.

“Reputation in the travel industry is vital, as visitors share their experience with family, friends, and the online world. These cuts have damaged British Columbia’s reputation internationally,” said Rykes, “and we’ll be feeling the effects for years. The Nimpkish experiment was a disaster, and a real solution is needed before more businesses close and more jobs are lost.”

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PRESS RELEASE: Premier Clark Should Listen to Talk Show Clark

While Transportation Minister Todd Stone continues to make unsupported, misleading, and erroneous claims about ferry service in British Columbia, another member of the cabinet has in the past shown a great understanding of the issue. Although Premier Christy Clark has shown reluctance to say anything on the matter, Talk Show Host Christy Clark was not hesitant about voicing her opinions on the state of the ferries and the responsibility of the province to provide this public service.

Talk Show Host Clark understood the solution isn’t higher fares. “Higher fares mean fewer passengers so the accountants will have to subtract paying customers from every new dollar they add to ticket prices,” she said back in 2008.

“We know Premier Clark cares deeply about the ferry service, and knows it is a vital part of the provincial economy,” said Leonard Ellis, Vice-Chair of Save the Discovery Coast. “She needs to step in now, and say to her Transportation Minister today what she said about the former Transportation Minister then – people depend on these ferries, and they need to be supported.”

Talk Show Host Clark knew any talk of subsidies for ferry passengers was ridiculous. “That’s the thing that I don’t get about the subsidy argument… why don’t they say that they’re subsidizing people who live in Whistler by the massive expansion of the Sea to Sky Highway?” she said on air. “Why don’t they do that – apply the same math to the highways that they build and then maintain – that they do to the ferry routes?”

It would be interesting to hear how Premier Clark would answer the questions Talk Show Host Clark was asking six years ago. Minister Stone believes the Nimpkish service is “a good tourism product”, when every tourism operator and analyst has shown it is killing tourism in the region. Talk Show Host Clark would not have been silent watching this farce go on. Her own words suggest she would have been a very vocal opponent of the changes being made to BC Ferries.

“Christy Clark knows how wrong it is to suggest our maritime highways deserve less support than mainland ones,” said Petrus Rykes, Chair. “Now she has the power to force Transportation Minister Stone to do what she knows is right. This is her moment to follow what’s in her heart rather than the words of her advisors.”

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The Province: Government shows its incompetence when it comes to B.C. Ferries — again

One day after saying the government might shut down a major ferry terminal and scrap a major ferry route, Todd Stone shifted into full reverse Wednesday.

The transportation minister said his bright idea was shot down by a couple of Liberal caucus colleagues, who would have been roasted alive in their ridings if he had actually followed through on the insane plan.

All of which makes me wonder if this government has even the faintest clue about what it’s doing when it comes to B.C. Ferries.

Read the rest of Michael Smyth’s column at The Province.

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RELEASE: Is Minister Stone Capable of Making a Rational Decision?

Transportation Minister Todd Stone’s decisions around Route 40 have accomplished precisely the opposite of his stated intentions, exactly as critics in the region have predicted. He spent more than the expected savings to cancel one of BC Ferries’ most utilized sailings and replaced an aging vessel with an older, slower, and much smaller one that has crippled tourism along the Discovery Coast and will still need to be replaced in short order. It calls into question the Minister’s ability to make a rational decision related to his portfolio.

Minister Stone cherry-picked financial results from the 2012 summer season to justify his decisions, rather than the more relevant 2013 results, the 5-year average, or even the 10-year average. The 2012 numbers included large capital cost and debt service write-offs, artificially inflating losses that subsequently were proven to be temporary. This was either a deliberate deception by Minister Stone to make the route appear to be performing terribly, or an act of incompetence in not looking at the data clearly.

“In every instance, Minister Stone’s decisions have had the exact opposite effect from his stated justification and intent,” said Leonard Ellis, Vice-Chair of Save the Discovery Coast Ferry. “He could not have made more harmful, destructive, and costly choices if he deliberately tried.”

The amount of traffic on this particular route was also given as a reason for the cuts, with Minister Stone stating Route 40 “carried approximately 500 vehicles” in the 2012 season. This number appears to be made up whole cloth, as BC Ferries records show Route 40 carried 2,138 vehicles (or 2,643 automobile equivalents), at least four or five times greater than the Minister believes. Even at full capacity, the Nimpkish could carry only a third of the regular traffic known to travel this route every year, limiting travel for both residents and tourists.

When the Minister quoted low utilization rates as further justification, he used rates for the entire Route 40. But the cuts were made to just one portion of the route, the direct sailing between Port Hardy and Bella Coola. That route’s capacity utilization was exactly in line with the BC Ferries average, and its southbound sailing had the second-highest utilization rate in the entire fleet.

In replacing the aging (but recently refurbished at great expense) Queen of Chilliwack with the even older, much smaller 16-vehicle Nimpkish, Minister Stone suggested there would be cost savings of approximately $725,000. Instead, extra sailings were required to try to handle a portion of the demand, a connection to the Route 10 ferry had to be established at Bella Bella, and modifications were made to the Nimpkish so passengers would at least have access to potable water for the 9 hour voyage. Instead of being a cost savings, the switch likely cost BC Ferries money, and a replacement vessel will still be needed in a few short years.

“Replacing the Queen of Chilliwack with the Nimpkish has actively harmed not only the tourism industry, it has made life difficult for residents,” stated Petrus Rykes, Chair. “We need a solution that actually works for the region, and a replacement for a Minister who has not demonstrated the ability to make a rational decision.”

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Press Release: Minister Stone “survives” Nimpkish, but Tourism Won’t

“The little Nimpkish ferry, the little 16-car ferry which now serves Bella Bella to Bella Coola, is getting the job done. … To those who criticize the decisions that were made and those who say that the Nimpkish will not work and that the Nimpkish will not enable this to be a good tourism product, if my wife and I can take three little girls on this ferry and enjoy the journey and survive, anybody can.” Transportation Minister Todd Stone, BC Legislature, October 9th, 2014

With his recent statement in the legislature, Transportation Minister Stone demonstrates clearly he has no grasp on the issues involved. He may have “survived” his Nimpkish voyage, and fortunately for him and his family there was unusually good weather this summer, but today there are many regional business owners wondering whether they will be so lucky.

Use of the Nimpkish on the Discovery Coast route has created several major problems, starting with capacity. During the 2013 summer season the 115-vehicle Queen of Chilliwack carried approximately 1,700 vehicles between Bella Coola and Port Hardy. During the summer of 2014 however, the Nimpkish could only provide a total capacity of 720 vehicles. If we deduct a modest 15% to accommodate local traffic, a mere 612 vehicles could be accommodated for the voyage between Bella Coola and Port Hardy.

This means the Nimpkish can carry a maximum of 36% of the actual traffic that travelled the route in past summers, and provides zero room for future growth. Ask any business owner in the Cariboo Chilcotin Coast or northern Vancouver Island whether slashing the potential customer base by 64% is a good idea.

And that’s before we begin to talk about the poor quality of on-board service – which is the second major problem. The Nimpkish is considered inadequate by the major international tour operators. Jonview Canada, Canada’s largest international tour wholesaler, which sends approximately 100,000 tourists to BC every year and has called the Discovery Coast route a “cornerstone” for future tourism growth in the province, has stated unequivocally that the Nimpkish “is not sufficient to satisfy even a minimum standard of service, convenience and quality for international guests visiting Canada,” and they will no longer recommend the route to their international clients.

The key German market feels likewise. A consortium of six of the largest German tour operators who specialize in travel to British Columbia said, “the Nimpkish as a replacement for the Queen of Chilliwack is unacceptable from a tourism perspective” in a letter to Minister Todd Stone.

“How Minister Stone can call this ‘a good tourism product’ is beyond me”, said Petrus Rykes, Chair of Save The Discovery Coast Ferry. “Our European market has dried up this year, and it’s only going to get worse once those who actually braved the trip get home to tell their friends and post on TripAdvisor. We hardly heard any positive comments all summer. People just shook their heads in disbelief.”

Surveys conducted by the region’s tourism associations gave the Nimpkish an abysmal review. Passengers who commented on their dissatisfaction called the service “distressing”, “outrageous”, and “a joke”.

The mandate of government is to facilitate commerce and ensure economic growth. The Discovery Coast’s Nimpkish service does not fulfil that mandate, and is in fact restricting commerce and weakening the region’s economy. For Minister Stone to make statements so clearly contrary to reality is extremely unhelpful in finding a solution to this critical issue.

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