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Funding ferries for remote communities

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The future of Newfoundland and Labrador’s remote communities serviced by ferries is a political minefield. Depending on your viewpoint, the geographic dispersion represented by these communities is our curse, or our defining and cherished characteristic.

Discussion on the topic often devolves into caricatures of townie versus baymen, our future and our past. On one side is the hypocrisy of one larger island telling other smaller islands they have to move. Memories of Resettlement are not far behind, nor are phrases such as cultural genocide.

On the other side is the cost borne by the province to maintain these remote communities, including transportation, health and education.

But the answer will not be found in the clash of ideology at the theoretical level. We need to consider each community and its own unique circumstances for both economic and moral reasons. There are practicalities to supporting groups of communities. In many cases a 20 per cent reduction in services will not result in a 20 per cent reduction in cost. And it’s also essential to see these communities as just that, communities where people live, work and ground themselves.

My grandfather and great-grandfather helped the last two residents on Iona move to Fox Harbour. Iona is a spec of rock not much bigger than a soccer pitch in the middle of Placentia Bay. Standing on it you wonder how winter storms didn’t roll right over it. But it had fishing grounds on its doorstep. And when you were under the power of oars, not engines, being close to the grounds made a big difference.

Concerned the elderly couple might not make it through another winter, my family convinced them to move ashore, where the community saw they were taken care of.

When the reason for a community’s founding ceases to exist, should the community remain? Everyone has the right to choose where and how they live. But how far does society’s responsibility to support that choice go? What level of service should Newfoundland and Labrador’s remote communities expect and how should they be funded?

Should ferries be similar in cost to road transportation (a.k.a. road equivalency), or should they be funded mostly through user fees? Should living in a remote community mean less or more expensive services? Do we have a responsibility for equal supports or equity in outcomes?

No matter your personal standpoint on the support of remote communities, there are some difficult facts about the transportation costs associated. For starters, the annual marine operations budget for the province is $143 million ($6,100 per person served). To be clear this does not include Marine Atlantic, a federal budget responsibility.

For context, the annual cost of road maintenance and improvements for the province is $250 million ($470 per person served).

Looking specifically at the island ferry system (without Labrador), the operating budget is $50 million and services 14 communities with 4,700 people, at a cost per capita of over $10,000. Only four per cent of the operating cost of ferries is recovered through fares, to say nothing of the capital cost of purchasing the ferries and terminals (another $50 million in 2015-16 alone). As context, Marine Atlantic and British Columbia Ferries have recovery rates of 65 per cent and 92 per cent, respectively.

When we include both the operating and capital cost for the island ferry system, the cost per person served rises to $19,100, 40 times the cost per capita of the N.L. road system.

So what are some of the options we have as a province?

1. More supports: support these communities to retain their people and generate economic opportunities.

2. Status quo: fund ferries to 98 per cent. Let communities continue to age and decline.

3. Continue service, but increase fares: increase the cost recovery rate of ferry services to 65 per cent, representing a 13 times increase in fares for Bell Island and over a 40 times increase in fares for most communities. This would increase the cost of passenger transit and also goods, including food.

4. Privatization: turn the ferry services over to private operators. Lease the vessels to them and mandate a minimum level of service allowed.

5. Resettlement: stop providing ferry service to selected communities. Offer optional resettlement assistance to any who wish to relocate. Sell the ferries used on those routes.

The case of our ferry system is an extreme example of the discussions required around how we support rural and isolated communities. It is a difficult dialogue, but one of many we must have to find a way to sustainability.

Jon Duke

St. John’s

Twitter: @DukeNL

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