Last week the BC NDP government announced an investment of $500 million as an interim measure to keeping ferry fares affordable for BC Ferries users.
This will greatly assist my constituents of Saanich North and the Islands who live, work, and recreate on the Saanich Peninsula and Southern Gulf Islands! I have heard much gratitude for the investments. In questioning Minister Fleming’s priorities I raise that in addition to affordability, reliability, staffing shortages and other issues also need to be addressed at B.C. Ferries. I highlighted the need for increased budgets in road and highway maintenance and transit.
In Supplementary Budget Estimates we had the opportunity to ask about the priorities of Minister Rob Fleming. I had a few minutes with Minister Fleming, and will get into the other transportation related issues in the upcoming full Budget Estimates process.
Thank you for the opportunity to ask a few questions here in supplementary estimates for Transportation and Infrastructure. I guess it’s important just to start by acknowledging the challenging year that was 2022 for B.C. Ferries as a corporation and, as well, for anybody who relies on B.C. Ferries to get home and to work and for their transportation needs. It was one of the most challenging years, I think, that users of B.C. Ferries have faced.
One of those issues that plagued the ferry service throughout 2022 and leading up to were staffing issues, and that made…. So there are the affordability issues that….
Well, I’ll say this as well: thank you on behalf of all of the constituents in my riding who use ferries, where affordability is important to them. It allows them to access their homes and their businesses.
I think this announcement last week, or just a few days ago now, went over very well amongst the constituents that I have that rely on the ferries. That’s all of them here on the Saanich Peninsula and then, as well, the southern Gulf Islands.
What was considered around whether or not there could be an opportunity to support the Ferry Services in recruiting and the staffing issues that they had, to increase reliability and the rates and affordability? Was there any conversation or discussion that happened around that?
Hon. R. Fleming:
Thank you to the member for the question. I’m not sure if he was in the room, but we were just starting to talk about how you bring down the cost and how the commissioner established price caps and how, essentially, fares are set — what the cap will look like in the next performance term.
The member knows full well that the current performance term is capped at 2.3 percent, so it gives the kind of affordability and predictability that we want. When that was brought into being, almost four years ago now, we even had a year of zero increase when we faced the uncertainty of COVID and were worried about people struggling with the loss of income and challenges to their small businesses.
The overall fares are determined by the overall activities of the corporation, what those cost. Maybe I’ll give a couple-of-part answer here, going back to a previous answer.
The ministry and the government meet quite regularly with the ferry corporation about the types of things the member might anticipate around scheduling and around different challenges. Fuel costs, obviously, came into effect last year as an area of concern. Then, of course, we were in this renewal period, going forward, to a new performance term, so lots of information being shared back and forth there.
Crucially, to the member’s question, were some of the labour challenges, some of which are borne by having, I think, for most of last year and possibly continuing into this year, the lowest unemployment rate in Canada. It’s labour shortages across a number of sectors, but transportation labour shortages and marine transportation labour shortages as well, owing to retirements, owing to…. Crewing challenges were experienced by variants of COVID infecting crew, all those sorts of things. There were some really tough parts of the last year that challenged, on the service side, having every sailing as scheduled in fact occur.
So we have had a number of discussions where B.C. Ferries has shared their strategies. There is a fairly extensive section in the B.C. Ferry Services submission to the commissioner, if the member wants to look it up. It’s the September 30 submission of 2022, pages 128 and 129 in particular.
If I can just read from some of that, because it is a public record submission that might be of interest to the member.
They’re planning to establish a centre of excellence for training, for recruitment. They’re planning to increase their investment on workforce development — so promoting from within and hiring the positions that are vacated — succession planning basically. They’re looking at bursaries and scholarships — so a series of incentives for young people to pursue a lifelong career in a good company like B.C. Ferries, which continues to be rated one of the top employers in our province.
They’ve committed to working with the B.C. Ferry and Marine Workers to look at different schedule and shift arrangements that might also be additionally attractive for new employees. Also, reducing stress and workforce pressures and improving work-life balance to additionally retain members. So that’s positive.
They’re looking at employment partnerships in industries that are related to B.C. Ferries — leadership capacity development for people who are working in certain parts of the corporation that might take on additional supervisory or managerial duties. There are a number of strategies there. I’ve cited the reference for the member to take a look at.
Those all cost money, and those will all be part of B.C. Ferries’ overall budget. That is part of the submission, as I’ve mentioned, for the commissioner to scrutinize and make a determination with regard to the price cap.
The $500 million that’s before us this afternoon is something that’s going to help promote affordability, because it’s going to address some of the cost pressures around fuel, around taking a deferred capital plan and reactivating it and making investments in fleet and facilities in the company around labour costs that are negotiated — all those sorts of things. That’s every cost driver there. The money that is being debated here this afternoon is to promote affordability within those activities of the Ferry Corp.
I appreciate the response. And I appreciate the contents that the minister read back with respect to the plans that the Ferry Corp. has with respect to their workforce and the worker shortages that they face. Hopefully, what’s addressed are the systemic issues where there was, I think, evolving — as it has been described to me — sort of a culture of having a lot of casual workers rather than creating a pipeline within the organization to promote. Over the last number of years, to keep costs down, many people who normally would be promoted from within were in casual. Anyway, I appreciate that that’s being addressed and that the corporation itself is addressing this. I look forward to the positive outcomes.
I think when the minister and I were much younger people, the Ferry Corp. was…. When I went Stelly’s, it was one of the two places that people always looked at as having a good…. Butchart Gardens and the ferries — everybody wanted to work in one of those two places. I think part of that culture is gone now. I really think that while B.C. Ferries still remains a good employer, the idea of having a career there and being able to move from the galley to the wheelhouse is something that I think needs to be re-established.
The minister talked about facilities. He’s well aware that there’s quite, I think, a growing vocal group on some of the southern Gulf Islands, Saltspring in particular, with respect to terminal upgrades that are needed. I think, actually, what I’m going to do is I’m going to leave that for the next. I’m not going to try to put it in here and ask the minister a question as to whether or not there was a consideration of upgrading terminals with this $500 million, because I think the last answer the minister gave highlighted the affordability measures.
I will, though, because as part of this supplementary estimates…. It clearly highlights that there are two things that are trying to be accomplished here. The first thing is ferry fare affordability, and the second aspect of it is the climate initiatives to reduce greenhouse gas emissions.
I’m just wondering if the minister can highlight the amount that’s being spent on the affordability measures and the amount that is being invested in achieving the greenhouse gas reduction measures that are needed by 2030.
Hon. R. Fleming:
It’s a very good question. It kind of goes to this place where…. We certainly look at the submission of B.C. Ferries, and the commissioner’s job, ultimately, is to scrutinize that. It’s not a case where we only care about fares and that they should make a choice between keeping those low and perhaps avoiding investments on greenhouse gas reduction activities. We want to support the whole plan.
The whole plan is costed and given to the commissioner. A major source of revenue, obviously, is fares, and that’s what we want to protect with our money, but we want B.C. Ferries to achieve its strong and ambitious goals for greenhouse gas reduction by 2030. The commissioner will determine what that investment exactly looks like, because they review the capital plan and make a determination about what kind of activities are going to happen there.
There are some very good initiatives that are moving the company forward around electrification of Island class vessels. They need some infrastructure there around the use of renewable fuels, biodiesel, renewable diesel. Those are very important to GHG reductions. Anytime a terminal or facility is improved, obviously, using strong green and low-GHG building practices and mechanical systems and those sorts of things. Those are all part of the capital plan that the commissioner will rightly review and make a determination on.
When she makes that determination, she is also going to set the price cap, and it is going to include the contribution agreement that we will have with B.C. Ferries by the end of this month, which will utilize and put into action, once authorized by the assembly here, the money that’s before us this afternoon.
There is, I think, a lot of conversation — or there’s some conversation, perhaps — about the electrification of the fleet. That would be something, an initiative, that I think many people, certainly in the southern Gulf Islands, would be very supportive of.
There’s also the reality that you can have an electrified fleet, and if they have nowhere to plug into, that’s going to be a problem. You might be able to find access to enough power to supercharge a ferry, the battery packs in a ferry, at Tsawwassen and at Swartz Bay, but the reality of being able to plug that in on Galiano or on Mayne or on Pender or on Gabriola, trying to be inclusive of the other Gulf Islands, is going to be challenging.
Has the minister thought about the infrastructure investments, maybe in a partnership with the federal government, to ensure that we can continue to encourage B.C. Ferries to make the investments in an electrified fleet because the investments are being made, the plugs are there for them to plug into, rather than maybe taking and investing in LNG, say for an example, where you don’t need to have those plugs?
Hon. R. Fleming:
Thank you to the member for the question. There’s a very recent ruling by the Ferry Commissioner that the member might be interested in. It’s publicly posted. If he has any trouble finding it, I can get him a copy outside of this process. But it’s a ruling by the Ferry Commissioner to approve the latest iteration of B.C. Ferries’ electrification plan.
It’s basically exactly that. It’s moving forward on the plan to fully electrify four of the Island class ferries on the routes that they’re currently serving.
In terms of the strategy to lower greenhouse gas emissions with the 2030 target — the 2050 target, by the way, is a 96 percent GHG reduction — it’s not going to be entirely electrification. There is going to be bio and renewable diesel. There are simply some routes currently, anyway, where we can’t contemplate battery power that would be reliable and capable of creating the continuous service. Those would be typically longer routes.
But there are some great opportunities, and there are some ships built to specification that can be electrified. We do need the shore power infrastructure to do that. The commissioner agrees. We want to be part of that.
We’ve certainly had a number of engagements with the federal government to do that as well. The federal government in the past has been involved in electrifying cruise ship terminals for when they’re in port and reducing emissions. So there’s a broader discussion about British Columbia’s interest in federal support for marine battery electrification.
We have a cluster of great companies here.
The Island class vessels, I mentioned that their battery systems were created by a Richmond-based company, and there are a lot of suppliers that are part of that electrification value chain. We think that we could scale that up, and B.C. would have a great innovation success story to be a leader, as we already are in the world.
I’m fully supportive of the federal initiatives and what they’re doing in the automotive sector in Ontario and the parts sector in Quebec. We think that marine battery support here would be an excellent candidate for additional federal support. But regardless of that, there is movement towards electrification in the manner that the member inquires about.
Thank you. And just a comment that I appreciate the responses from the minister. I appreciate the questioning from the member from the opposition with respect to all of the, I guess, judgment decisions that a minister has to make when you’ve got a Finance Minister saying: “We’ve got X number of dollars to spend. Where would it best be spent that aligns with the priority of the current government?”
I think the minister knows that just in my riding alone, we hear about road maintenance, we hear about ongoing upgrading of roads to increase the capacity for multimodal transportation, the improvement to ferry terminals. All of those things, I think, we’re going to discuss at later stages in the further estimates about the transportation budget.
Those are all decisions, though, I think that it’s important to just note could have been the decision that was made. But that doesn’t diminish the fact that at least a third of British Columbians rely on this ferry service to be affordable. So I think that this is a good investment in making sure that we are able to maintain that affordability. So definitely, on behalf of my constituents, I’m appreciative of the investment that’s been made in order to keep the prices affordable and accessible for people. HÍSW̱ḴE SIÁM.