BC Ferries puts fuel rebate on hold as dispute with minister heats up

BC Ferries is putting plans on hold to end its fuel rebates while it waits to hear more from the government about possible compensation.

The announcement comes after Transportation Minister Claire Trevena said she was "extremely disappointed" by a plan by BC Ferries to remove fuel rebates less than two months after the provincial government put a fare reduction strategy in place.

Trevena's comments set off a round of back-and-forth statements as officials returned to work Tuesday, in a dispute that points to some tension between the province and the ferry corporation.

The day began with BC Ferries president Mark Collins firing back at Trevena, saying the minister and her staff were well aware of the coming changes.

"There is no possibility the ministry could be surprised by this," Collins told CBC News.

"We've been discussing with the ministry for more than six months about what to do about these rebates. They were part and parcel to the discussion around fares."

In a call with reporters later Tuesday, Trevena acknowledged that discussions had been underway for months but countered that the plan to end the rebates right away had come as a surprise.

"We didn't hear until last week that this was going to happen right now," she said.

Collins, meanwhile, stated that the only news was the minister's offer "to provide funds to BC Ferries to avoid this increase."

In light of that, he said he would wait to hear more about the offer from the minister before making any changes.

"We are going to give them a couple of weeks to see what they have to say and we'll go from there," he said.

He noted that fuel rebates and surcharges are not part of regular fares. Instead they are intended to cover fluctuations in fuel prices and be revenue neutral for the provincially-owned ferry corporation.

Minister 'surprised and disappointed'

In a letter released to the media on Sunday, Trevena told BC Ferries board chairman Donald Hayes that she was "surprised and disappointed" to learn that BC Ferries was planning to announce the removal of fuel rebates of 2.9 per cent on major and minor routes and 1.9 per cent on northern routes.

On the main routes between Vancouver and Vancouver Island that would translate to an extra 50 cents for adult passengers and $2.10 for a car and driver.

Trevena said Tuesday that fares have gone up "exponentially" in recent years, making it clear for people living on the coast that "BC Ferries hasn't worked in the public interest."

She added that she was eager to negotiate a solution with the ferry corporation.

Fares froze, fuel prices did not

Trevena has said her ministry worked closely with BC Ferries for several months to negotiate an agreement to freeze some fares and cut others on April 1.

The province gave BC Ferries $59 million to make the April fare reductions, which included fare freezes on three major routes, reduced fares on other routes by 15 per cent and the return of a 100 per cent discount on seniors' passenger fares Monday through Thursday.

"As minister, I am personally committed to delivering on our government's promise to freeze fares. As I expressed to you, I believe this action is contrary to that," Trevena wrote in her letter to the ferry corporation.

Unlike changes to fares and routes, fuel rebates and surcharges do not require prior approval from the BC. Ferry Commission.

BC Ferries is currently undergoing an operational review ordered by the transportation ministry. Trevena said she expects it to be complete in late June.

With files from the Canadian Press