June 2, 2011
Coastal Ferry Act Review: Bill 14 Enacted
On June 2, 2011, the Coastal Ferry Amendment Act (Bill 14) was enacted which:
- establishes a price cap for the first year of Performance Term 3 with an increase for each route group on April 1, 2012, of 4.15% from the weighted average of the tariffs payable as at March 31, 2012, as determined in a manner approved by the Commissioner;
- provides for the Commissioner to undertake the usual price cap review proceedings for the balance of the review performance term, being the period from April 1, 2013 to March 31, 2016;
- prevents BC Ferries from obtaining extraordinary price cap increases, and requires ministerial approval (as opposed to Commissioner approval) for the discontinuance of ferry services, until October 1, 2012; and
- requires the Commissioner to undertake a review of the Act and provide recommendations by January 24, 2012, to the Minister of Transportation and Infrastructure as to how the Act could be amended to allow the Commissioner to balance the interests of ferry users with the financial sustainability needs of BC Ferries.
These amendments also provide the Commissioner with the mandate, funding and time to conduct his review before issuing his final decision on price caps for the balance of the third performance term which will now be due by September 30, 2012. The Province has indicated that it will increase ferry transportation fees for the first year of performance term three, in order to compensate for the legislated reduction in price caps for the minor route groups (from 8.23% to 4.15%). BC Ferries and the provincial government have entered into discussions to determine the amount of the transportation service fee increase required.