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Post by Low Light Mike on Feb 6, 2011 8:07:40 GMT -8
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mrdot
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Mr. DOT
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Post by mrdot on Feb 6, 2011 10:40:21 GMT -8
:)I am humbled by moderator Mike's level headedness, and I will try to stick to my new years resolution to remain on course and stick to non- controversial marine maters. Looking at the posted profile drawings of the original AMAS Spauldings, wow what shipshape lines these originals had, and thru tender shipcare, they are all still with us! And it pleases me that they all still have their original liveries. As for EG's posted shot of San Mateao, it troubles me how we have desecrated her gravesite up river! :'(mrdot.
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Neil
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Post by Neil on Feb 6, 2011 11:22:34 GMT -8
:)I am humbled by moderator Mike's level headedness, and I will try to stick to my new years resolution to remain on course and stick to non- controversial marine maters. Bad resolution, in my opinion. This forum needs more discussion and back-and-forth, not less. I enjoy your pithy remarks, and I didn't read into Mr Horn's reply to your post that you shouldn't hold forth on issues that concern you.
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Post by Ferryman on Feb 6, 2011 14:38:39 GMT -8
Prime example of how the media changes the words to get a public reaction. Keep in mind folks, this is NOT the plan for the SMALLER routes. The smaller routes are looking at about a 40- 50% increase over four years. It's the Northern routes such as the Inside Passage, Discovery Coast, Haida Gwaii routes that could potentially have their fare go up 100% over four years. Besides, the "news" about the smaller routes fares isn't anything new. This has been ongoing with this much of an increase every year on April 1st since 2003. However, the thought of paying as much as $340 for one adult fare on the Inside Passage in the summer of 2015 seems pretty outragous. That price only gets you onboard the ship too.
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mrdot
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Mr. DOT
Posts: 1,252
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Post by mrdot on Feb 6, 2011 15:05:04 GMT -8
:)I said I would keep my mouth shut, but I shall have to have a legitimate CEO's sallery, not a superannuaiton municipal pension to consider a north coastal trip to see my brother, with these new north coast fares! I don't know if gov't will still give any break on this gold card I have been blessed with? :oI guess this is the free enterprise coast! ???mrdot.
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mrdot
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Mr. DOT
Posts: 1,252
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Post by mrdot on Feb 6, 2011 17:57:43 GMT -8
:)on thinking back to the early BC ferry days, perhaps WAC Bennett did the people of the Gulf Islands, and the North Coast a disservice when he set up unrealistic sudubsidised ferry rates that these folks became acustomized to, and now they will face the real true costs of this service in a sudo-privitized ferry system with a high end front office! ;Dmrdot.
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Post by Low Light Mike on Feb 7, 2011 14:12:05 GMT -8
:)I said I would keep my mouth shut, but I shall have to have a legitimate CEO's sallery, not a superannuaiton municipal pension to consider a north coastal trip to see my brother, with these new north coast fares! I don't know if gov't will still give any break on this gold card I have been blessed with? :oI guess this is the free enterprise coast! ???mrdot. I agree that if the North route fares increase dramatically, most people will find travel on that route to be unaffordable. - As it stands now, the fares are already unaffordable by many. So even status-quo or a small increase will further hurt ridership (and service to those communities). My last northern trip was July 2010 on the NorEx, and it was less than 1/2 full, on what should have been a busy summer sailing. - Their price point is already too high. Higher prices will hurt the tourism market even more. ...and that's not even considering the effect of higher prices on the local traffic. ouch!
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Post by WettCoast on Feb 7, 2011 20:10:54 GMT -8
I agree that if the North route fares increase dramatically, most people will find travel on that route to be unaffordable. - As it stands now, the fares are already unaffordable by many. So even status-quo or a small increase will further hurt ridership (and service to those communities). My last northern trip was July 2010 on the NorEx, and it was less than 1/2 full, on what should have been a busy summer sailing. - Their price point is already too high. Higher prices will hurt the tourism market even more. ...and that's not even considering the effect of higher prices on the local traffic. ouch! Everyone that I know who did a summer trip on the NorEx last year tells me the same thing "The car deck was less than half full". Half full car decks on the Inside Passage route in the height of summer never happened in the bad old BCFC days before 2003. The fares on the North Coast routes have already doubled since the so-called private company was created. Further substantial increases (never mind another doubling) will kill the service and the shiny new NorEx will have to be sold off. I personally used to use the North Coast ferries 2 or 3 times per year. I am now down to once per year and that will likely fall to zero if further substantial increases happen. I have an obvious choice, and that is to save a whack of money by going inland via PG. Unfortunately the people of many communities on Haida Gwaii and along the coast south to Vancouver Island do not have any choice. I will not blame the million dollar man Hahn for this mess. The blame belongs squarely with Gordon Campbell and his so-called Liberals. They created this situation. BTW, has the current provincial government subsidy of $150 million been at that level since 2003? Is that amount supposed to be both an operational subsidy and financial assistance with fleet replacement? There are quite a number of vessels coming up on on age fifty and not much sign of any plan to replace them. Also, it is my understanding that BCFS also receives some subsidy from the Feds to help cover northern service costs and to contribute to the cost of maintaining the Trans Canada Highway which Route 2 is a part of. Can anyone confirm/refute this?
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mrdot
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Mr. DOT
Posts: 1,252
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Post by mrdot on Feb 7, 2011 20:20:23 GMT -8
:)With regard to the northern fare increases, the past historical companies that overbuilt their northern vessels, paid a very steep price, ie. CNR's princely ships of the 1930's, the Union co. was always careful not to overbuild what would be supported untill the last years of their existence, then came wac and his QPR to the north, but he was careful not to tempt fate further till later visions and the Surrey/ S. Danica came north, but now this new age management brings a super sized northern parking lot sized boxboat to the north coast and supersized fares to accompany! they referred to CNR's princely fleet as Sir Henry Thornton's folly, maybe this new wondership will be christened Falcon's Folly! as northern folk will have to be the main freight! ::)mrdot.
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Post by Low Light Mike on Feb 7, 2011 21:03:50 GMT -8
BTW, has the current provincial government subsidy of $150 million been at that level since 2003? Is that amount supposed to be both an operational subsidy and financial assistance with fleet replacement? There are quite a number of vessels coming up on on age fifty and not much sign of any plan to replace them. Also, it is my understanding that BCFS also receives some subsidy from the Feds to help cover northern service costs and to contribute to the cost of maintaining the Trans Canada Highway which Route 2 is a part of. Can anyone confirm/refute this? 1) What does the Provincial unchanging $150million subsidy cover: - operating the minor routes and the northern routes. There is no direct funding by the Province to buy ships. Instead, the related expenses to ship acquisition (interest on financing, amortization expense on the cost of the asset) are counted as expenses that need to be funded by the combination of subsidy & fares. So these 2 costs (interest & cost-amortization) are part of the costs that are factored into route costs which become part of the price-cap equation. ----------- 2) Federal funding: For the year-ended 3/31/2010, the revenues for the 3 northern routes were broken down as follows: - fares, catering, staterooms, hostling $19,663,000 - Provincial subsidy - $47,590,000 - Federal subsidy - $6,660,000 - Total - $73,913,000 There is no federal or provincial subsidy on the 3 major routes, other than social program reimbursements (such as DOT's gold card). --------------- One more funding source: - when BC Ferries does a newbuild (I-Sky) or major refit at a BC shipyard, BCF will borrow funds to finance the work. There is a federal subsidy program that reimburses BCF for part of this interest cost. (they even used this for the Quinsam project)
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Post by WettCoast on Feb 7, 2011 21:28:28 GMT -8
So Mr. Fluge, you are confirming that the $150 million is unchanged since 2003? There has been/is no inflation adjustment?
Further, you are also telling me that there is no TCH subsidy as (I understand) there once was. Perhaps the total of all of the federal subsidies is now used only to offset the cost of northern service. Have federal subsidies increased at all?
I do know that the Feds did allow BCFS relief from the duties that should have been owing as a result of their decision to build new ferries overseas. One could argue that that is an indirect subsidy of sorts.
New ferry construction can be compared to new highway construction. I understand that in most cases highways are paid for out of the Province's general revenues. One could argue that fuel taxes help to cover the costs of new highway construction. Is a portion of fuel tax revenue used in funding our ferry system?
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Post by Low Light Mike on Feb 7, 2011 22:07:46 GMT -8
So Mr. Fluge, you are confirming that the $150 million is unchanged since 2003? There has been/is no inflation adjustment? Further, you are also telling me that there is no TCH subsidy as (I understand) there once was. Perhaps the total of all of the federal subsidies is now used only to offset the cost of northern service. Have federal subsidies increased at all? I do know that the Feds did allow BCFS relief from the duties that should have been owing as a result of their decision to build new ferries overseas. One could argue that that is an indirect subsidy of sorts. New ferry construction can be compared to new highway construction. I understand that in most cases highways are paid for out of the Province's general revenues. One could argue that fuel taxes help to cover the costs of new highway construction. Is a portion of fuel tax revenue used in funding our ferry system? I got my information from the 3/31/2010 management discussion & analysis report (from . - regarding the $150mill subsidy: I don't know for sure, but I've heard media comment that it's been unchanged since 2003. Presumably that means no inflation-increase. - there are some federal subsidies reported in the minor routes. Maybe they've moved the old TCH subsidy there? who knows..... As to the source of the Provincial subsidy, I don't think there's a direct link to gas-tax and the subsidy. I think that the subsidy is just paid our of general Provincial revenues, like most other budgetary expenditures.
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Post by WettCoast on Feb 7, 2011 22:17:07 GMT -8
I think that a portion of BC fuel taxes being set aside to fund construction of new ferries seems reasonable. The Nanaimo, Burnaby, and a host of minor vessels need replacing very soon and funding of ~$100 million per year to do this seems reasonable to me. Do you have any idea of how much money the province collects in fuel taxes each year?
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mrdot
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Mr. DOT
Posts: 1,252
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Post by mrdot on Feb 7, 2011 22:39:55 GMT -8
:)remembering back to my youthful year on the brand new QPR and the full car decks, including the side ramps! we were sailing out of Kelsey Bay with full loads up coast in 66, and new age mgmt. calls these the bad old days! I would submit that less than half full northern wonderboats are a testament to a different truth! :omrdot.
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mrdot
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Mr. DOT
Posts: 1,252
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Post by mrdot on Feb 7, 2011 23:00:46 GMT -8
:)Maybe we will have to go the same way as Marine Atlantic, and charter out replacements from new gambling revenues, from the renewed BC Condome, but we will have to know our limit, and play within it! :-Xmrdot.
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Post by Scott on Feb 8, 2011 0:11:30 GMT -8
The Annual Report for 09/10 shows the subsidies over the past 7 years (page 9 - www.bcferries.com/files/AboutBCF/AR/0910_Annual_Report_WebReady.pdf). The total provincial subsidies are divided into several sections, mainly "Ferry Transportation Fees", "Contracted Routes Fee", and "Social Programs Fee". The Ferry Transportation Fee, I believe, is the main provincial subsidy for operation costs. This averaged around 90 million between 2004-2007. In 2008 and 2009 it jumped to 103 million, and in 2010 it was 125 million. Interestinly, "Social Programs Fees" have almost doubled between 2004 when it was just over 12 million and 2010 where it now stands at over 22 million. The Ferry Commission has up-to-date figures from the Performance Term 3 Submission ( www.bcferrycommission.com/PT3_Document_with_Duty_Updates_-Clean.pdf ) which has been referenced beforehand. There you can see route-by-route breakdown of revenue and expenses including how much subsidy is alotted to each crossing. I'm no expert on numbers, but it's very interesting. Check the above link starting around page 100. As Flugel pointed out already, the Northern Routes get about 47 million in subsidy, and the Minor Routes about 74 million. Highlights... Route 1 makes BC Ferries about 24 million per year (no subsidy), Route 2 makes about 3.5 million (no subsidy), and route 30 loses almost 24 million per year (no subsidy).
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Post by gordon on Feb 8, 2011 9:50:54 GMT -8
I'm surprised that Route #30 loses as much money as it does.
What does it take for for a route to be subsidized?
How does route #3 rate financially?
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Post by Low Light Mike on Feb 8, 2011 9:56:53 GMT -8
How does route #3 rate financially? See page 1 of this thread, for the posts that I did in late October 2010. - there is a list of page-#s that I posted, regarding a PDF. One of the last sections that I posted was a route-by-route financial statement.
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Post by WettCoast on Feb 8, 2011 20:24:12 GMT -8
How is it that Route 30 simultaneously looses money, and is home to the fleet's "most cost effective boat*", the Coastal Inspiration. Does this mean that the Inspiration's running mate, the Q Alberni, goes back and forth empty all the time?
*This is according to D. Hahn
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Neil
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Post by Neil on Feb 8, 2011 20:59:57 GMT -8
How is it that Route 30 simultaneously looses money, and is home to the fleet's "most cost effective boat*", the Coastal Inspiration. Does this mean that the Inspiration's running mate, the Q Alberni, goes back and forth empty all the time? *This is according to D. Hahn That line about the 'Inspiration was identified some time ago as either a misstatement by David Hahn, or a misquote by someone listening. Can't remember which. Route 30 makes money on operations; it loses when capital/financing costs are factored in.
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mrdot
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Mr. DOT
Posts: 1,252
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Post by mrdot on Feb 8, 2011 21:12:27 GMT -8
:)sounds to me that the new northern wonderboat is the least cost effective, running upcoast almost on empty, while ordnary income northerners drive the inland route down coast! ::)mrdot.
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Post by Scott on Feb 8, 2011 23:05:28 GMT -8
Route 30 makes money on operations; it loses when capital/financing costs are factored in. OK, this is where I get lost with the numbers/accounting. Are the amortization and financing expenses where paying off the cost of building the ferries comes in?
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Post by Low Light Mike on Feb 9, 2011 9:06:29 GMT -8
Route 30 makes money on operations; it loses when capital/financing costs are factored in. OK, this is where I get lost with the numbers/accounting. Are the amortization and financing expenses where paying off the cost of building the ferries comes in? Simple answer: Yes. Amortization of the cost is the cost of building the ferry, dividend by the estimated useful life in years. = the portion of the building-cost to allocate to each year of operation. (this used to be commonly known as "depreciation expense"). Interest: the cost of borrowing to finance the purchase/construction of the ship.
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Post by Scott on Feb 9, 2011 17:06:06 GMT -8
Does anyone know if the subsidy allocations are determined by BC Ferries or by the Ferry Commissioner or by the government? Does BC Ferries get a lump sum of 125 million and decide where to use it or is it negotiated on a route-by-route basis?
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Post by Low Light Mike on Feb 9, 2011 17:27:49 GMT -8
Does anyone know if the subsidy allocations are determined by BC Ferries or by the Ferry Commissioner or by the government? Does BC Ferries get a lump sum of 125 million and decide where to use it or is it negotiated on a route-by-route basis? From the BC Ferry Commissioner's website: From the latest contract amendment, it shows that the Province determines the breakdown of the subsidy between specific routes. See the contract here: www.bcferrycommission.com/CFSCAmendingAgreementNo4_copy.pdf- clause 2.7 for a description of fees. - the Schedule at the end of the document for the breakdown by route.
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