09/27/2011 12:56 EDT | Updated 11/27/2011 05:12 EST

BC Ferries CEO retires, leaving behind controversy over salary and pension

VICTORIA - David Hahn, the swashbuckling B.C. Ferries CEO who built new vessels and mall-like terminals but torpedoed the popular Sunshine breakfasts, is taking early retirement, partly, he says, to scuttle the outcry over his $1 million salary and benefits package.

Hahn said Tuesday he hoped his retirement steers debate back to the larger financial matters swirling around BC Ferries: Who pays, users or the government?

In recent months, Hahn announced a series of company-wide austerity measures that included plans to cancel 400 ferry round trips and cancellation of a sponsorship deal with the Vancouver Canucks.

BC Ferries is forecast to lose more than $20 million this year amid forecasts of the lowest passenger levels in 20 years.

"I just don't think people should be worried about what I made," said Hahn.

"They should be figuring out how do you run this system. To me it all comes down to what's the government's policy: how much the public's going to pay, how much they're going to pay."

Hahn said when he was hired by BC Ferries in 2003, the former Crown corporation was restructured to ensure ferry users paid for the services, which included covering escalating fuel costs, building new ships and terminals while providing daily service between the Lower Mainland and Vancouver Island and the many tiny West Coast islands.

"The price of fuel for us going from $40 million to almost $115 million is a pretty significant cost increase," he said.

"That has to be paid for. New ships we had to buy, otherwise they would have been taken out of service with no replacements. They have to be paid for."

BC Ferries spent about $300 million to build three new vessels capable of carrying 1,650 passengers and 370 vehicles.

"You take those two items alone and you've got higher fares," said Hahn.

It currently costs a family of four with two children 12 years old or older $104.25 for a one-way fare from the Lower Mainland near Vancouver to Vancouver Island near Victoria.

"The government right now is going through a review, through the ferry commissioner, to decide what its new (funding and fare) policy is," Hahn said.

"There should be, I assume, a recommendation from the ferry commissioner that the government re-look at its policy."

Transportation Minister Blair Lekstrom said Hahn ran an excellent ship at BC Ferries and the government is fully aware that it takes money to run the service.

"The independent (ferry) commissioner is out talking to communities and people about what it takes to make sure we can maintain a sustainable ferry system," said Lekstrom.

"I think we have a world-class ferry system right now, but the funding and the price of that for the travelling public is a concern. I've heard that loud and clear."

Opposition New Democrat ferries critic Gary Coons said Hahn's departure gives the government and BC Ferries the opportunity to chart a new course after Hahn's legacy of rising fares and fewer riders.

"When the government decides to take BC Ferries into cruise ship mode, we've seen the results," Coons said.

"We've seen skyrocketing fares, we've seen ridership go down. So when the cruise-line director retires, there's got to be new direction and it falls onto the lap of government to look at that."

But Dan Miller, a former NDP premier and a current member of one of two boards overseeing BC Ferries, said Hahn has taken BC Ferries to new heights by modernizing the company and saving money in a battle over international duties with Ottawa.

Miller said Ottawa wanted to charge BC Ferries almost $120 million in duties because it built its three new ferries overseas, but Hahn was able to have those costs wiped clean.

"I was a very strong supporter of David Hahn, I still am," said Miller. "I think he worked wonders for the company."

B.C. Ferry and Marine Workers' Union president Richard Goode said Hahn had an adversarial relationship with the union through his constant attempts to exclude hundreds of members from the bargaining unit.

"It was never cordial," said Goode. "He was very anti-union. I'm hoping the next CEO will at least respect the union."

Hahn said he plans to stay in Victoria for now, but may consider taking over another company in the future. Hahn, an American, said he plans to visit his mother in Buffalo, N.Y., where he also plans to watch a football game.

Hahn said the March 2006 sinking of the ferry Queen of the North with 101 people on board has never left his consciousness. Two people died when the passenger and vehicle vessel hit an island and sank near Hartley Bay in northwest B.C.

"It still haunts me, probably will for the rest of my life. You have to say to yourself, how could somebody run into an island?"