Money for nothing as the tourists flee

B. C. Ferries stands to make a tidy bit of pocket change simply by not providing any service to coastal routes this summer. The Daily News has the story of how when the Ferries applied for an Act of God claim, the wheels were put in motion that could see them get paid for routes they will not run.

Making for a rather interesting situation, which has the Ferry Corporation getting paid out for trips they won’t provide, while local tourism operators lose money for visitors they won’t receive.

It’s amazing what a stroke of a pen can do for a bottom line.

Check out the entire story below.

FERRIES FIRM GETTING PAID DESPITE SINKING
By Leanne Ritchie
The Daily News
Friday, April 28, 2006
Pages One and Three

B. C. Ferries could pocket more than $2.5 million for trips they won’t be taking this summer in the wake of the Queen of the North disaster.

Shortly after the Queen of the North sank at the end of March, B. C. Ferries claimed the event was ‘Force Majeure’ or an act of God. This was approved by the B. C. Ferries Commissioner and provincial Minister of Transportation for a month, up until May 18. Hence, under the Coastal Ferry Services Contract with the province, B. C. Ferries continued to receive its service fee for those runs it did not provide. If the Commissioner approves an extension, the company will also get paid for those runs it will no longer be able to provide during the summer season.

On Monday, B. C. Ferries announced it has so far been unable to find a replacement vessel for the Queen of the North in time for the summer season and will use the smaller Queen of Prince Rupert to service both the inside passage and Queen Charlotte Islands using the winter schedule. Under the Coastal Ferries Services Contract, B. C. Ferries receives $42,669 per round trip to the Charlottes and $43,496 per round trip on the Inside Passage.

While the company had provided a minimum of 66 round trips on the Inside Passage in the summer and 92 round trips to the Charlottes, under the winter schedule, it will only be able to provide 38 on the Inside Passage and 57 to the Charlottes.

The missing 63 trips are worth $2.7 million in service fees.

In addition, the reduced number of trips will all be on the Queen of Prince Rupert, which can only hold 400 passengers, compared to the 600 capacity of the Queen of the North.

North Coast MLA Gary Coons, also the NDP’s ferry critic, said it is way too early to declare the cause of the sinking ‘an act of God’.

We can’t say what the true cause of the sinking was, because we just don’t know,” said Coons.

“For Ferries to quickly invoke the Force Majeure clause –even before the National Transportation Safety Board (NTSB) had begun work on its investigation – strikes me as premature.”

He said Ferries invoke the Force Majuere clause to avoid liability for not living up to the service provisions of their contract with the provincial government.

“It seems as though B. C. Ferries has learned well from this government: when anything goes wrong, say it was out of their control,” Coons said.

Coons says the minister’s acceptance of Ferries declaration could backfire in the long run.

He says if the NTSB does not find fault in 18 months, Ferries could easily argue that the government has absolved the corporation of its responsibility.

It is unknown at this point whether the declaration will impact the insurance claim of individuals on board the Queen of the North when it sunk.

The president of the B. C. Ferry and Marine Workers Union was equally outraged that
B. C. Ferries will continue to get paid, while northern communities take a huge financial hit because of the reduced capacity during the summer tourist season. Sixty per cent of the passengers on the two routes are tourists.

“B. C. Ferries continues to receive their 90 million service fee from the provincial government without providing full services to Northern Communities,” said Jackie Miller.

“Those dollars should be going to support coastal communities that are having difficulty traveling, moving goods and supplies and drawing tourists.

“Instead the province appears happy to continue paying B. C. Ferries for services ferry-dependent communities aren’t receiving.

Prince Rupert Mayor Herb Pond said there’s no doubt tourism operators are going to take a hit this summer.

“It’s going to be a big challenge for local tourism operators,” said Pond. “It’s also going to hurt operators all along the circle tour line.”

He said communities such as Smithers and even gas stations along the Highway to Prince George are bracing for a financial hit.