Province tells BC Ferries: no service, no money

  • May. 4, 2006 2:00 p.m.

By Heather Ramsay-Transportation Minister Kevin Falcon says he is ready to arm-wrestle with BC Ferries over the issue of whether the corporation will be paid for ferry services it has not provided.
He told a media scrum outside the Legislature on Monday that the BC Ferries contract is reviewed every quarter and the province’s lawyers are looking into the issue.
Media reports across the province have indicated that BC Ferries continued to receive a service fee of $43,000 per sailing on its northern routes, even during a month of no service following the sinking of the Queen of the North March 22.
Shortly after the incident, BC Ferries notified the provincial government that it believed the sinking was a “force majeure” event.
The service contract with the province describes force majeure as an event beyond BC Ferries’ reasonable control and not its fault. BC Ferries is not liable to the province for failing to perform its obligations under this term of the contract.
North Coast MLA Gary Coons said that in the contract, these events include acts of God, changes in federal laws, wars, fires, floods and storms, strikes, lockouts and power failures.
Sinking or grounding of vessels falls under a different category known as temporary service disruptions. The contract states BC Ferries can miss 20 consecutive days of sailings and a cumulative total of 30 days each calendar year for this type of disruption, which also includes vessel or dock breakdowns, bad weather, maintenance to vessels or docks, fire and situations that compromise safety.
Mr. Coons said BC Ferries’ decision to declare the sinking of the Queen of the North a force majeure is just another example of the failure of privatizing the marine highway system.
“We can’t say what the true cause of the sinking was because we just don’t know,” Mr. Coons said. He thinks it is premature to invoke force majeure when investigations into the sinking have not been completed.
BC Ferries applied to the BC Ferry Commission on April 10 for authorization of a reduction in services after the ferry sank. This was authorized by commissioner Martin Crilly on April 24, but extends only until May 18.
Mr. Coons said that Minister Falcon’s acceptance of Ferries’ declaration could backfire in the long run. He said if the national Transportation Safety Board does find fault, Ferries could argue the government had absolved the corporation of its responsibility.
The Observer asked the corporation about the costs incurred while the ferry was out of service as well as the amount of insurance the corporation has received for the loss of the vessel.
BC Ferries spokesperson Deborah Marshall said they are are not releasing these figures at this time. She also said president David Hahn would have to speak to the force majeure issue and he was not available for comment before our deadline.
In other ferry news, the corporation is now confirming that all passengers will be required to be at the terminal two hours before departure. This means passengers will have to be at the Prince Rupert terminal at 4 am when the summer schedule starts in two weeks, with its 6 am departure time.
Last week BC Ferry spokesperson Mark Stefanson told the Observer the two-hour rule would only apply to the Port Hardy route.
Ms Marshall also said that another increase in the fuel surcharge seems likely. The corporation is gathering costs of fuel from November to the end of April and a projection of costs to March 2008 and will be sending that to the BC Ferry Commission for approval.