In early December, B.C. taxpayers got to meet Mike Corrigan, the new President and CEO of BC Ferries. Let’s hope this new boss is nothing like his old boss, the free-spending, million-dollar man David Hahn.
Corrigan, formerly BC Ferries’ second-in-command, was promoted to the top job by the BC Ferries Board of Directors this week, who also limited his compensation package to 60 per cent of what Hahn earned. Of course, that’s about $600,000 annually that Corrigan will be paid.
You’ll have to forgive taxpayers for not throwing a parade along the Inside Passage following this announcement—$600,000 is still a hefty amount of money to run a heavily-subsidized operation like BC Ferries. Just six years before Hahn joined the million dollar club, the same job earned him a much more reasonable $228,239.
If ever there was a time for significant change at BC Ferries, it is now. The corporate culture created by Hahn has turned what was once a profitable operation into a money-loser. His vision of BC Ferries as a boutique tourist operation does not fit with British Columbians’ view that ferries are an extension of the highway system. Tourists are nice, but they shouldn’t be the focus; moving people and goods should be.
On Hahn’s watch, BC Ferries fell from a $49.9 million profit in 2006 to a projected $20+ million loss this year. Moreover, the corporation has run up its debt load to an estimated $1.3 billion.
But Hahn still earned $1.2 million a year and will start retired life with an annual pension valued at $315,000.
Hahn seemed tone-deaf to what British Columbians are experiencing in terms of the global recession. While wages were frozen and jobs were being lost in the private sector, 60 per cent of BC Ferries’ employees earned more than $89,000 a year—putting them in the top five per cent of all Canadian income earners. While families and seniors were struggling to pay ferry rates that increased between 45 and 80 per cent over eight years, Hahn was approving million dollar ad contracts at Rogers Arena.
One of Hahn’s final acts was to double the fuel surcharge to five per cent, making it even more expensive for B.C. residents and businesses to take the ferry.
The average user has been priced off the ferry, despite the corporation’s $150 million annual subsidy from B.C. taxpayers.
As fares have skyrocketed, passenger trips are down 2.9 per cent this year and vehicle trips down 3.4 per cent, as drivers cut any discretionary travel plans. To stop the bleeding, BC Ferries is trying to convince the provincial government to allow them to cut 400 sailings a year on their major routes.
This is the mess Corrigan has inherited from his old boss: slumping ridership, a bloated debt, growing expenses and a public that looks at BC Ferries’ operating philosophy with disdain.
Corrigan announced at his hiring that he wouldn’t replace himself as Chief Operating Officer, which he said should save BC Ferries about $600,000 a year. That is a positive, albeit small, step forward. The bigger battle for Corrigan will be to undo many of the decisions of the Hahn era and rebuild the public’s confidence in our ferry system.
Ferries are a vital necessity in British Columbia. Many of our communities are completely dependent on having a robust, fairly-priced, well-run ferry system. Vancouver Island’s economy needs a good, reliable, inexpensive transportation link to the Mainland. This is the life-blood of many families in our province and hopefully Mike Corrigan’s BC Ferries will get back to putting those taxpayers’ needs ahead of lining their own corporate pockets.
