Coons worries about costing on Sonia

On Thursday, the MLA for the North Coast expressed some concerns over the recent purchase of the MV Sonia to replace the sunken Queen of the North and other maritime matters concerning B. C. Ferries.

MLA Gary Coons while glad that B. C. Ferries has finally found a replacement vessel for the Queen of the North, is concerned over the additional costs associated with the vessel, such as import taxes owed to the federal government due to the privatization of the Ferry Corporation. He also took the time to once again state that the other replacement vessels planned for the Ferry service should be built in B. C. and not overseas in German shipyards.

For its part of the debate the Provincial government indicated that it plans to approach the Federal government to waive those duties on not only the Sonia, but the five replacement vessels that will be built to replace the aging fleet. And pretty well said that it was a need for quick replacement of ferries that sent them overseas to build replacements for the elderly vessels.

Friday brought the news that B. C. Ferries was keeping the fuel surcharge in place for the foreseeable future, this despite the rapid drop in fuel costs on the world market of late. It seems that the Ferry Corporation waited to long to seek relief from the rise of the fuel costs and now finds itself facing a 21 million dollar fuel charge deficit, resulting in the decision to keep the passenger fuel surcharges in place. A decision that once again has ferry customers grabbing their wallets and wondering what the Ferry Corporation may wish to charge for next.

This back and forth over the issue of ferries only goes to highlight the controversial nature of the Ferry operation in B. C., long a tar pit of misadventure for countless provincial governments over the years, it would seem that we will be in for more drama over the provinces floating highways..

Below we provide the Daily News had Coons’ concerns as part of their front page story in Thursday’s paper and we have a News 1130 story on the fuel charge controversy percolating in southern ports these days.

COONS FEARS HIGH COST OF SONIA WILL BE PASSED ON
North Coast MLA claims cost of the ferry could end up hurting travelers
By Leanne Ritchie
The Daily News
Thursday, September 21, 2006
Pages One and Five

North Coast MLA Gary Coons is glad to see B. C. Ferries has finally announced the purchase of a replacement vessel for the Queen of the North.

“I think it’s about time (Transportation Minister) Falcon has stopped dragging his feet on the replacement. It took six weeks for the information.” Said Coons, who was among those waiting on the edge of their seats for confirmation of the purchase.

Earlier this week, B. C. Ferries confirmed a $51 million deal to purchase the MV Sonia, a two-year old European car and passenger ferry. The vessel will require $18 million in refits before being put into service for the summer of 2007 and there’s an additional $17.7 million in taxes and duties.

“It is good news we are going to get ferry service for next summer but we are paying the duties, paying the interest charges, paying the GST on the vessel in refits,” said Coons. These charges wouldn’t be put on the backs of vessel users if B. C. Ferries had not been turned into a private corporation, he said.

A Crown corporation would not have to pay federal import taxes and the refit should be done in-country, he said.

Yesterday, Falcon said the B. C. government will ask Ottawa to roll back $140 million in duty on five replacement ships for the aging B. C. Ferries fleet, including the Sonia. Falcon said it is totally inappropriate that B. C. Ferry Services be penalized by being required to pay those tariffs.

“I will work with the federal government to ask (that those duties) be waived, Falcon said.

B. C. Ferries has contracted to have four ferries built in the Flensburger yard in Germany.

That includes three Super C class ships, at a cost of approximately $325 million. The duty on those three ships to be delivered between December 2007 and June 2008, is $89 million.

When it comes to the Super C Class ferries, Coons said government needs to show leadership and encourage these ships be built by B. C. companies.

“I don’t think we should be building our ships offshore, he said.

He has no problems with the offshore purchase of the Sonia because of the immediate need to provide service on the northern run following the sinking of the Queen of the North.

“But the refit needs to be done in British Columbia,” he said.

Meanwhile, B. C. Liberal Northern Caucus Chair John Rustad said the NDP are flip flopping on how fast government should replace the ferries.

”Our government has been clear from the start,” said Rustad.

“We have always said that the top priority is getting a new ship on that route as soon as possible.

“Tourism stakeholders along Highway 16 and 97 corridors from Prince Rupert to Williams Lake have told me they need a replacement ferry as soon as possible. And yet the NDP are still dithering and arguing amongst themselves.”

Earlier this year, NDP MLA for Esquimalt-Metchosin Maurine Karagianis said she believed that there was no rush to build new ferries for the northern routes and that the deadline to have the ferries completed should be extended.

“B. C. shipyards should be given a more achievable timeline than 30 months,” Karagianis said in the April. Rustad argues this contradicts Coons who was quoted numerous times seeking for ferry service replacement as soon as possible.

However, Coons called the allegations silly and said if the Liberals read more closely, his position has always been clear – given the extreme circumstances, North Coast communities need a replacement vessel for the Queen of the North as soon as possible, however in other cases the B. C. government should not be spending its money to support the ship building industry overseas.


Fuel surcharges likely stay due to BC Ferries mistake
September 21, 2006 - 5:14 am
by: Amy Ryan
News 1130 Vancouver


VANCOUVER (NEWS1130) - You may be enjoying the lower pump prices when you go to fill up your car, but don't expect BC Ferries to drop its fuel surcharge.

Despite reporting a surplus earlier this month, the corporation says it is carrying a fuel deficit. CEO and president David Hahn says the it is because the company initially waited too long to apply for relief from the BC Ferry Commission.

He told a small audience at the corporation's annual general meeting that in hindsight the company should have applied for surcharges as early as late 2004, but banked on rising fuel costs dropping back to historic levels.

Now BC Ferries is facing a $21 million deficit fuel account, which Hahn said must be paid down before surcharges can be reduced.

Earlier this month the company released its fiscal report that showed overall profits are up to nearly $15 million while fewer people are taking the ferries.