VICTORIA – BC Ferries CEO David Hahn is leaving his post at the end of the year, part of a cost-cutting plan that freezes wages and reduces other executive salaries as the province's ferry service endures a slowdown in traffic.
Hahn's million-dollar salary makes him the highest-paid provincial employee, and the BC Ferries board's decision to increase his pension added to a storm of controversy that overshadowed the performance of the ferry service.
BC Ferries board chairman Donald Hayes confirmed that quitting with a year left on his contract means he will be paid no severance. Hahn said he made the decision to go early, and he also forgoes salary as well as taking a reduced pension.
Hahn has argued that a drop of three to four per cent in this year's BC Ferries traffic is not a response to high fares, but fuel costs, the U.S. slump and a high Canadian dollar that have also reduced traffic at B.C.'s free inland ferries and airports.
The B.C. Ferries Commissioner is reviewing the government's user-pay mandate for ferries, which has been in place for nine years and led to steeper increases on the minor routes. Until that review is complete and fares are set, Hahn said the company will cut costs by $11 million to offset an anticipated loss of $20 million this year.
Cost-cutting moves include a two-year wage and salary freeze, hiring freeze on non-essential positions, "select early retirements," reduced use of contractors, elimination of charity and community donations and the cancellation of arena advertising for Vancouver Canucks games, BC Ferries said in a statement.
Transportation Minister Blair Lekstrom intervened in May to cap ferry rate increases at 4.15 per cent for all routes next year. A preliminary ruling by the commissioner had indicated rates for smaller and northern routes would go up eight per cent.
The Coastal Ferry Act currently requires BC Ferries to reduce the subsidy paid to keep smaller ferry routes running, and prevents BC Ferries from using revenue from its large, busy routes to support service to smaller islands and communities.
Lekstrom said the ferry rate review will focus on affordability for ferry users and the impact of rates on tourism and other business in ferry-dependent communities.
Long-time civil servant Gord Macatee took over as B.C. Ferry Commissioner this year, and his review is to make recommendations in early 2012 about changes to the legislation.
Largely in response to public anger over Hahn's salary, in 2010 the B.C. government passed amendments linking BC Ferries executive salaries to those of other public sector executives.