1. A Golden Opportunity

By fixing our coastal ferries the government will grow our province

Roads, especially connecting roads, bring with them many benefits.  They pave the way for, and give rise to, increased economic activity and prosperity.

This well-established fact is laid before you not by the Third Crossing Society but by Dr. David Gillen, head of UBC’s Sauder School of Business and Director of its Centre for Transportation Studies, in his 2012 study, “Building for the future of British Columbia: the importance of  transportation infrastructure to economic growth and employment.”  The study can be found in our reference library.  To read it, click here.

Our intention in what follows is not to make that case again, but to highlight the kinds of activity that two new Sunshine Coast connecting roads would give rise to, and where the money can be found to build them.

Our organization promotes construction of a highway from Powell River to Brackendale, thereby connecting Vancouver Island with the Whistler highway (the arrow-shaped red line on the map at right).  Others are campaigning for a highway, and-or bridges, that would connect the Lower Sunshine Coast with Metro Vancouver (red lines bottom right).

In the interest of the entire province, our Society supports both proposals.

Together, they have a price tag that’s been realistically estimated at about a billion dollars. BC’s share of that would be two-thirds: $667 million (See appendix for the cost analyses).  Over ten years, improved economies at BC Ferries would yield almost twice that.

(Cost figures publicized in late fall were preliminary, “order of magnitude” estimates more than double the realistic ones.  Those estimates are the first step in a long process that begins next year.  Our professional engineers are seasoned road and tunnel builders who can and will prove that those preliminary estimates are far too high.) 

BC’s two biggest transportation headaches are the congestion in Metro Vancouver and the coastal ferry system.  The proposed two roads, and the adjustments to the ferry system that would be necessary to fund them, would be just what the doctor ordered for these nagging afflictions.

Congestion in Metro Vancouver

It was at least ten years overdue, but to give credit where credit is due, over the past decade the senior governments have reduced much of the city’s congestion by bulldozing $3.4 billion into the Trans-Canada Highway and the new Port Mann bridge.  Making allowance for rush hour, anyone who’s used them knows how much easier the streamlined Trans-Canada and the new bridge have made driving in the lower mainland.

The problem is, the population around them continues to grow, and new bottlenecks are already appearing.

We suggest – in fact we prove in the discussion below – that by building those two connecting highways north of Vancouver, the Province can both tame downtown congestion even further and reap substantial financial savings in future by extending the life of the Trans-Canada, the Port Mann, and the rest of that expensive new infrastructure.

The Coastal Ferries

As constituted under the Coastal Ferries Act, the ferries are a liability – both politically and economically – to the Province which funds them, and to we who use them.  Ferries are costly because they’re expensive to maintain, expensive to operate, are always hostage to the weather, and can never offer the freedom of movement that roads and bridges offer.

Ferries are expensive not only to ride, but to administer – the Province has to cough up an annual subsidy of $200 million, amounting to $2 billion every decade, apparently forever.  And, while they claim to operate at or above the minimum level of service set by the Province, that doesn’t cut any ice with the travelling public.  If anyone’s happy with the ferries, they’ve been very quiet about it.

So what’s the remedy?

Building the two highways described above would lead to the elimination of one major ferry route and improve the economies on two minor ones, leading to savings itemized below; by merging two other major routes (with no reduction in the existing level of service), the Province could achieve even greater savings, also itemized below.

A new fixed link via Powell River would connect the coastal and interior communities, and allow motorists from those areas to avoid Metro Vancouver altogether.  (There goes some of the congestion.)

Major ferry economies totaling $1.235 billion-plus will easily pay for both roads over ten years.  Economic and industrial expansion on several fronts will pay dividends to the entire province.  There are six major points to be made, each with major blessings.

First: A fixed link connecting the Squamish area with the lower Sunshine Coast would:

  1. Eliminate the Langdale ferry and its $3 million annual operating loss. That’s a saving of $30 million over ten years.
  2. Eliminate the congestion at Horseshoe Bay and save the $250 million worth of upgrades BC Ferries’ capital plan now entails.
  3. Convert expensive ferry fares ($42 million in 2015) to a less expensive road toll which for now we will peg at $10 million per annum. Saving to the travelling public over 10 years: $320 million.
  4. Make the Queen of Surrey available for use on another route.  Result: avoid or delay purchase of a major vessel. Estimated saving: $100 million.
  5. Make the Langdale terminal lands available for other, revenue-generating uses.  Result: we’re ahead perhaps $10 million, perhaps more.

Well, that all adds up to $710 million – noticeably more than the Provincial share of the cost of the Howe Sound road.  But wait: those are just the direct savings.  There are also numerous province-building benefits that we deal with in the points that follow.

Second: The Third Crossing highway, connecting the interior and the other coastal communities, would:

  1. Turn the Comox/Powell River ferry route into a money-maker instead of leaving it one of the biggest losers in the fleet, as it is now.  In 2015 it lost $1.6 million, but that is after subsidies of $9.5 million; so the total loss is really $11.1 million.  Over ten years that’s $111 million.  To determine that saving more precisely will require careful analysis, but for now, we’ll assume it to be about half: $55 million.
  2. Permit downsizing of the vessel serving the Earls Cove/Saltery Bay route and make the Island Sky available for service on another route.  Our saving: $50 million, net of the replacement vessel, which in turn should reduce losses on that route.  Last year the Earls Cove run reported a $2 million profit, but that was after $13 million in subsidies, so its real loss, as at Comox, was also $11 million.  We’ll assume that can be cut in half, so over 10 years we should gain another $50 million.
  3. Make the Comox ferry more attractive to the Island’s travelling population, so it may become acceptable to transfer traffic from Departure Bay/ Horseshoe Bay to either Duke Point/Tsawassen or Comox/Powell River. This would have a whole range of impacts, but consolidation of the two Nanaimo routes should lead to the end of the $17 million loss at Duke Point – which over ten years produces another $170 million.
  4. Generate toll revenue from the road. We are currently developing traffic estimates, but as a ballpark estimate, we see annual revenue of $5 million from tolls – $50 million over ten years.
  5. Put those sums together and we now have another $375 million to add to the earlier $710 million, for a total of $1.085 billion, and we are not yet finished.

 

Third: A decision to consolidate the Nanaimo runs and build the Third Crossing highway would have extraordinary implications for Metro Vancouver and the entire province:

  1. It’s hard for those of us who experience that nightmare of a parking lot to imagine, but the congestion at Horseshoe Bay would simply disappear, because that terminal would then serve only one short run, to Bowen Island. The pavement could be torn up and the property redeveloped.  Its value is anyone’s guess, but for now let’s say $100 million.
  2. Departure Bay could also be sold off and redeveloped. Again, its ultimate value would be anyone’s guess, but let’s say $50 million.
  3. Since most mainland traffic bound for the Island would then depart from Tsawassen, a large percentage of current traffic would then not even enter the city. The same would apply to interior traffic bound for the central or north Island, who would opt for the new connecting highway between Powell River and Highway 99.  This would apply as well to eastbound traffic originating on the Island. The only downside would be that most travellers to or from the north shore would have to traverse Vancouver to get to the Island, but they’d change their tune when they realize that they’d be winners in two other ways, because:
  4. Without Horseshoe Bay, traffic to and from the north shore would diminish dramatically, as would the pressure on the Lion’s Gate and Second Narrows bridges. We don’t have even a ballpark estimate for this reduction, but we can imagine a lot of smiling faces on the north shore.  Perhaps the planners can put a number to it.
  5. Moving north from Horseshoe Bay, motorists on the Sea to Sky are already noticing an increase in traffic, and downtown Squamish, too, is becoming busy, if not yet congested. But this is a negative that will only get worse unless the planners get busy now to resolve it.
  6. As on Highway 3 in the recent past, increased traffic on Highway 99 north of Squamish (also known as the Duffey Lake Road) will justify improvements to make it attractive for commercial traffic, because in reality, over time, it will make a nice addition to the Pacific Gateway, to which our Province and the federal government have committed such a huge amount of money.

Returning now to the task of toting up all the potential savings, we have another $150 million, bringing our grand total to $1.235 billion in the first ten years, even before we look at the general economic benefits to the Province, which are considerable.

Fourth: Certain other improvements in the operations of BC Ferries are possible with these changes.

  1. From the outset, it must be understood and acknowledged that the ferry service as it exists today is unacceptable. There appears to be almost universal agreement on this point.  The only people who don’t seem to understand that are the folks at BC Ferries.  This needs to change.
  2. The current contract between BC Ferries and the Province sets the minimum level of service and it’s believed that that minimum is being delivered.  However, as stated above, that level is entirely unacceptable.
  3. There are far too many who wish to debate those first two points, because the evidence is clear that further debate will not provide a solution for either the Ferries corp., the Commissioner or the Government.
  4. While it’s the responsibility of BC Ferries to resolve these issues, they, too, have clearly failed to do so. Their public relations efforts have failed, and it’s high time that the Province do what only it can do.
  5. The four- and six-hour waits for ferry space get all the headlines, but the real solution to the ferries’ economic funk is to better match supply and demand in our peak seasons, low seasons and shoulder seasons. Too many vessels sail with too much empty space on the vehicle decks, too much of the time.  An obvious first step would be to make supply more flexible: shrink the fleet in the low season and expand it on the peaks.  This means that vessels can be repaired and refitted in low season and thus be ready for serious service on the peaks.  This should also produce plenty of savings.

(The airlines have become masters of this dance.  Aircraft utilization is getting on for optimal, pricing has become very flexible, and revenue is maximized.  A serious independent study of whether, and if so how, the lessons of air travel economics can be applied on the water seems a no-brainer, and should thus be given high priority.  It should also be funded by the Government to ensure that it is fully independent.)

The foregoing issues will not go away.  As stated above, the ferries are a headache for both we the public and our Government, so there can be little doubt that the system needs fixing.  Not surprisingly, the electorate sees that as Government’s responsibility.

 

Fifth: Boldness in improving transportation is a hallmark of economic expansion – it always has been.  Great events in BC transportation include the opening of the Hope-Princeton Highway in 1949; the modernization of the Cariboo Wagon Road and completion of the Roger’s Pass and the Trans-Canada highway in 1962; and the Coquihalla 20 years ago.  Thanks to those achievements of long ago, many isolated communities gained access to the  mainstream and have prospered accordingly.  The two road proposals described here will revolutionize access to what are now other isolated areas and allow pent-up energy to drive new businesses and new activities, all of which will add to the tax base and make for a much healthier and more prosperous Provincial economy:

  1. Our presence on the Pacific will explode. Northern Vancouver Island and the coastal mainland will become vibrant and attractive for new residential development.  The “nowhere to grow from Vancouver” conundrum will resolve itself and end the funk visited upon the coastal communities by the high ferry fares of the past decade.
  2. The migration of winter weary retirees will spark a construction boom that will employ large numbers of young people.
  3. Lower mainlanders will cash in on high real estate prices in our commercial hub and be free to retire in comfort up the coast, as they’re already doing. The resulting increase in the Metro area’s  housing supply will also contribute to the normalization of pricing.
  4. Increased access will convert to increased tourism and increased investment in tourism facilities – those serving mountaineering and hiking, not to mention skiing and other winter related pursuits such as snowmobiling. Cold weather activities would also help BC Ferries balance those seasonal variances in supply and demand.
  5. The roads will connect ski meccas from Vancouver Island to Whistler and the many interior resorts. On the Malaspina Peninsula there is potential for a new resort at Triple Peaks (three peaks over 7,000 feet) currently accessible from the proposed Third Crossing in the Goat Lake area.  The rewards from marketing BC as a ski centre are significant.
  6. An incredible expansion of camping facilities for Europeans, other visitors, and our own citizens will attract vast numbers to our white water rafting, fishing, mountain biking, hiking, diving and eco-touring. Artificial reef developments will be more promotable.
  7. Access to Glendinning Provincial Park, now an isolated wilderness north of Squamish, will open even more recreational area.
  8. Opportunities for First Nations business will expand materially.
  9. Circle tours and tourism in general will enter a new phase.

 

Sixth: Industrial expansion will find new opportunities:

  1. The proposed Howe Sound road will provide access to the proposed LNG plant at Woodfibre.
  2. Trucking and new barging opportunities could enhance productivity at Squamish Terminals, and further development there should, over time, relieve pressure at the Port of Vancouver and improve its capacity to compete with Seattle.
  3. Limestone and gravel quarries could again enhance export and domestic markets and additional barging transportation.
  4. Manufacturing of recreational vehicles and related products would grow.

 

Conclusion

We suspect we’re only scratching the surface here.  Time will tell.  But perhaps the most intriguing thing about these proposals is that none of us can remember the Province ever entertaining a road proposal in which enough savings from one troublesome area of its operations could be used both to put that on a solid footing and finance a province-building pair of highways.  In the case at hand, no one seems to have twigged to this golden opportunity.

The Province wisely commissioned Binnie, a Burnaby consulting engineer, to determine whether the benefits of a fixed link between the Sunshine Coast and the Lower Mainland outweighed its costs, and the Third Crossing proposal is among the options under consideration.  But Binnie’s terms of reference are limited to costs and benefits regarding travel to and from the lower coast.  The federal government has made extra funds available for transportation planning — why on earth would the Province not take those funds, broaden the scope of the study, and explore what could be done on a provincial scale — especially when this might solve its coastal ferry problem in the process?  It defies common sense.

APPENDIX:  HISTORY OF THE FIXED-LINK COST ESTIMATES

Over the years there have been five estimates of the cost of building the highways in question.  The first that we’re aware of was done in the early 1990s by Peter Hall, a member of our organization.  His figure for the Third Crossing route was just over $500 million.

In 1998 an engineer in the South Coast Region of the Ministry of Transportation calculated a cost of $1.242 billion for the Third Crossing, but that was based on an eight-kilometre tunnel instead of the currently estimated 3.2 km, producing an overstatement of $288 million at $60 million per km.  We take issue with other aspects of this calculation.

In 2001 a Ministry study of a Port Mellon to Squamish connection pegged its cost at $1.05 billion.

In 2015 we estimated $500 to $600 million for the Third Crossing.  Click here to view.

More recently a member of our Board and a professional engineer calculated $623.1 million (see chart at right).

As a footnote, in 2016 a study of the likely cost of a proposed bridge to Gabriola Island was released by the Ministry.  It considered no less than 15 route options, priced from a low of $258 million to a high of $520 million, arriving an an average of $359 million.  For reasons unexplained, the report used that average figure rather than the lowest, to conclude that the project could not be cost-justified.  Upon closer examination all options included a 50% contingency.  Thus, the $258 million route really had a $172 million estimate plus a 50% contingency fund.

What’s notable here it that the Ministry’s estimates are uniformly higher than our and other estimates.  Over the next few weeks we will be reconciling the differences.