The Coastal Inspiration pulls into BC Ferries' Tsawwassen terminal.

Province floats gas tax shift to ferries

Transportation Minister Todd Stone's idea for BC Ferries funding called 'red herring'

Transportation Minister Todd Stone is proposing coastal communities turn over federal gas tax transfers they receive to shore up ferry service and help keep a lid on fares.

The idea is getting a cool reception from mayors and councillors in ferry-dependent areas because it would mean the sacrifice of the federal gasoline tax money they now use to fund local infrastructure.

But Stone argued it would not be unlike the decision of Metro Vancouver cities to dedicate all of their federal gas tax transfers to TransLink for public transit.

“Let’s think outside the box,” Stone said Thursday outside the Union of B.C. Municipalities convention.

“(Let’s) have a discussion around gas tax as a potential source of revenue for BC Ferries service, which would have the effect of applying downward pressure on fares.”

Stone said coastal communities get nearly $30 million a year in gas tax transfers, an amount that represents about a sixth of the $180 million a year the province spends to subsidize BC Ferries operations.

He suggested the redeployment of “some if not all” of that $30 million would help meet local demands for basic levels of ferry service.

The proposal would need the support of local communities or else it’s dead in the water, and even then it’s unclear how it might work.

Gas tax transfers are subject to federal rules that allow the money to go only to eligible local capital projects, not to operating expenses or to provincial services.

B.C. cities are lobbying Ottawa to loosen the restrictions on how the money can be spent and Premier Christy Clark said Friday the federal government should “step up” and enable gas taxes as a potential source for the ferry system.

Campbell River Coun. Claire Moglove, co-chair of a UBCM committee on ferry issues, said she doubts Vancouver Island cities would agree to give up gas tax money they rely on for costly local projects such as water systems and sewage treatment plants.

“This gas tax issue is a bit of a red herring,” she said. “This is a provincial transportation system that requires proper funding from the province.”

Moglove said Stone’s reference to the use of the gas tax for transit in Metro Vancouver is “comparing apples and oranges” because taxpayers in all other regions of B.C. pay hospital capital taxes that do not apply in Metro Vancouver, leaving more local taxation room there to fund TransLink.

She said the ferry system has 92 per cent operating cost recovery from fares.

The remaining eight per cent that’s funded by the province – $180 million – is about one third of the $550-million operating budget for the highways system, which Moglove said is generally untolled with no expectation of cost recovery.

“Why do ferry users have to pay 92 per cent of the operating cost of BC Ferries?” she demanded. “Why is it different for the coastal highway – ferries – as opposed to highways in the North, the Okanagan or the Kootenays?”

Stone has been firm that the province won’t raise taxes to fund BC Ferries and that relief from high fares must come through efficiencies.

The transportation minister has been sparring with Island mayors and councillors since the Sept. 10 release of a UBCM study that concluded rapidly rising ferry fares have driven down ridership and damaged the provincial economy.

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