Gerry Byrne feels Marine Atlantic and Transport Canada have some explaining to do when it comes to the fuel surcharge the ferry company charges customers.
Byrne, provincial minister of Fisheries and Land Resources, is questioning if the fuel surcharge being collected by the ferry corporation is really about complying with Sulfur Emissions Control Area regulations or if it’s about the cost of fuel.
On Thursday Marine Atlantic announced its rate structure for 2018-2019. While it made no increases to passenger fares it did increase the fuel surcharge by three per cent, from 15 per cent to 18.
Marine Atlantic said in a press release the increase is necessary to cover increased fuel costs associated with the move to more expensive marine diesel fuel to meet the international environmental regulations that have been adopted by the federal government.
But Byrne said Marine Atlantic is still two years away from having to be compliant with the regulations and has been unnecessarily charging customers for the past seven years.
“My argument is not only that the three per cent fuel surcharge is inappropriate, any fuel surcharge is inappropriate at this point in time because we’re below the reference level,” he said in a phone interview on Friday afternoon.
The fuel surcharge was one item he had touched on during a lunch-hour presentation at an ACAP-Humber Arm Coastal Matter’s session at the forestry centre at Grenfell Campus.
“Marine Atlantic last year collected $10 million in fuel surcharges when in actual fact they should have been giving rebates.”
As for the rising cost of fuel, he said, there is a problem with the logic presented by Marine Atlantic as its fuel expenses have been steadily going down. In 2015/2016 fuel costs were $22.5 million and in 2016/2017 the cost was $19.1 million, according to the corporation’s annual reports.
Byrne said the decreases are due to the use of more fuel-efficient boats and less single crossings.
He said the situation creates damage to the public trust because of the perception that increased costs have to be passed on to the consumer because of complying with a higher environmental standard, when in fact no such increased cost exists.
In an emailed response to Byrne’s comments Marine Atlantic said the sulfur regulations came into effect on Jan. 1, 2015, but due to the nature of its service and technology changeover requirements, Transport Canada approved a transition plan that gives it until Jan. 1, 2020 to be fully compliant.
Since 2015, it said, its percentage of marine diesel has been increasing to be compliant with the 2020 timeframe.
In 2015 it decreased the fuel surcharge to reflect the lower price of fuel on the international market.
However, it said, with the necessity to transition to the more expensive marine diesel and its requirement to purchase that fuel in greater quantities, its fuel costs are continuing to rise.