Get ready for a debate on taxpayer subsidies in British Columbia over the next several years. The opposition Liberals have promised to end business subsidies if they come to power. And with taxpayer-financed loans to businesses such as Western Star and Skeena Cellulose not quite working as planned - Skeena once again teeters financially and Western Star recently announced a round of layoffs - it is unlikely governing New Democrats will hand out more business subsidies in large amounts any time soon.

But taxpayer subsidies that take from one business, something the Canadian Taxpayers Federation opposes on principle, given the fundamental unfairness and inherent risk of such subsidies, are only part of the subsidy game. Almost anything government does is, in one sense, a subsidy or a transfer of wealth. That brings up the question of when a subsidy is appropriate and when it is not.

BC Ferries is raising fares (again) and all British Columbians will pay. Drivers already pay a subsidy to BC Ferries every time they fill up, whether they live in Nanaimo, Nelson or Surrey. Currently, 1.25 cents out of every litre is shifted to BC Ferries by the provincial government. That equals $72 million this year alone. Of course, there was the over $1 billion in ferry debt the provincial government swallowed last year. And federal transfers to BC Ferries equal $21 million per year.

So those are the current taxpayer transfers to BC Ferries. But what about route subsidies within BC Ferries itself According to data obtained from BC Ferries and produced in a report commissioned for the Federation late last year, the major routes all make money. So if you regularly travel between Vancouver and Nanaimo or Victoria (or the reverse), or if you travel from anywhere else in BC to vacation on the Island, you get to subsidize BC Ferries twice - once through your tax dollars and again when you buy a ferry ticket.

For example, in 1999, the last year for which figures are available, the Tsawwassen to Swartz Bay route pulled in over $134 million, but needed only $76 million to operate - a $58 million surplus. Nanaimo to Horseshoe Bay's surplus was $28 million, the Tsawwassen to Nanaimo route pulled in $8 million more than necessary. Two other routes also produced surpluses while all the other routes were money losers.

Therein lies the subsidy question: Travelers on major routes could see a significant drop in their fare prices were it not for the subsidization of the money-losing routes. For example, instead of two people paying $41.50 now to travel between the mainland and Vancouver Island in one car (and much more in peak summer travel), that couple could pay 38% less if the three main profitable routes were only required to cover their expenses. That weekend ticket for two (and the car) would thus be $25.73 instead. A walk-on passenger would pay $4.96 instead of $8.00.

Subsidies between taxpayers are always about public policy choices and priorities. In the case of ferry sailings, and ignoring the issue of whether BC Ferries is overstaffed or whether some staff may be overpaid, the main routes subsidize smaller routes at a tremendous cost. Some subsidized routes, such as ones to islands with weekend cottages or luxury homes, means that average working stiffs are likely subsidizing those with higher incomes.

It is unlikely any party will seriously examine the subsidy issue before an election - none care to lose votes from subsidized riders - but a thorough analysis of taxpayer subsidies and cross-subsidization at BC Ferries should be a priority after the next election.