Transportation and Works
March 12, 2007
Government Delivers on Promise to Reduce Provincial Ferry Rates
The Williams Government has made a significant step in delivering on its Blueprint promise to reduce provincial ferry rates and bring them in line with the cost of highway travel.
The Honourable Danny Williams, Premier of Newfoundland and Labrador, and the Honourable John Hickey, Minister of Transportation and Works, announced today that government will reduce passenger and vehicle-plus-driver fares on provincial ferries to bring them in line with road equivalency costs. They also confirmed government will cancel the five per cent, across the board, rate increase for all fares that was scheduled to take effect April 1, 2007.
"Today�s announcement is a significant investment for rural communities in Newfoundland and Labrador, and a meaningful demonstration of our government�s commitment to ensuring that the people using our ferry system have fairness and equity," said Premier Williams.
"The reduction in ferry rates will benefit individuals who live in smaller communities especially those who commute to work. It will also provide more cost-effective access to private and public sector services. Additionally, it will stimulate our tourism sector, as lower fares will encourage our tourists to use the ferry system to see even more of our beautiful province.
"When you couple this with other significant initiatives such as increasing annual monies for road work to $60 million, this announcement today is just the latest investment in the revitalization of the province�s transportation services."
Government determined road equivalency for passenger and vehicle-plus-driver rates based on Canadian Automobile Association (CAA) estimates of vehicle ownership and operating costs. The CAA estimates provide an independent benchmark for establishing road equivalency. The rate used is based on a mid-sized car and operating costs for vehicle and driver. This initiative is the first phase of government�s ferry rate review.
"To implement this first phase, the annual cost to government will approach $1.5 million. This standardization of ferry rates will benefit the province as a whole but most importantly those living in communities not accessible by road," said Minister Hickey. "We are hopeful that the Government of Canada will look at what our province is doing to make rates more equitable and reasonable for travelers, and apply it to the way in which they manage and apply rates to Marine Atlantic."
The new rate schedule will take effect April 1, 2007.
Some examples of the varying ferry rate reductions include:
While government is moving forward with a rate structure based on the cost of highway travel, rates that are currently below road equivalency will not increase.
"The policy decision made by our government is to reduce rates," said Minister Hickey.
"Therefore, we felt this restructuring should not result in rate increases to some ferry users, even though the rates they are currently being charged are below the road equivalency rate."
Minister Hickey also stated that government has taken into account concerns raised by the Newfoundland and Labrador Federation of Municipalities and ferry user committees.
"We have listened to their concerns and will continue to seek their input through the next phase of our ferry rate review," he said.
Mr. Wayne Ruth, President of the Newfoundland and Labrador Federation of Municipalities (NLFM), voiced his support of government�s ferry rate review. "Ferry-users have long expressed their desire for fairness when it comes to ferry rates," said Ruth. "If we are to grow our rural municipalities and ensure that they are sustainable, there must be efficient means of transportation. Today government is showing they have listened and I believe this is definitely a step in the right direction."
Herb Brett, Chair of the Newfoundland and Labrador Federation of Municipalities Ferry Advisory Committee, appreciates the cooperation his group has received as government continues to make improvements to the ferry service. "It's a first step but a very important one to rural residents of this province," said Mr. Brett, of today�s announcement. "I hope our working relationship will continue to produce positive results to the benefit of the province as a whole."
Reducing the passenger and vehicle-plus-driver rates to bring them to road equivalency is Phase I of the review. Phase II will focus on commercial vehicle and freight rates. Government will gather further data on commercial traffic and freight rates, further analyze the consumer impact of changes and develop criteria for the design of a new commercial vehicle/freight rate schedule. Phase II will take about a year to complete. The ferry rate review is also a component of government�s overall fee review initiative.
Minister Hickey points out that while performing preliminary analysis on the commercial freight rates, government discovered a small number of inequities in certain rates within Labrador. These inequities will be corrected immediately. For instance, freight rates on certain Labrador runs will be decreasing from approximately $112.00 to $35.00 for 680 kilograms of freight.
The current ferry rate structure has been in place since the province assumed management of the fleet from the federal government in 1995 (Island ferries) and 1997 (Labrador ferries).
This is the latest investment by the government in the provincial ferry service, the most significant being the ongoing Vessel Replacement Strategy. Government has already announced that it will invest $25 million to build two new ferry vessels and plans to build an additional three ferries over the next five years. Construction on the first two new ferries will begin this year, in this province.
All material copyright the Government of Newfoundland and Labrador. No unauthorized copying or redeployment permitted. The Government assumes no responsibility for the accuracy of any material deployed on an unauthorized server.