BC Ferries fare increases capped at 3.2%
Written by Nick Blenkey
Image: BC Ferries
The British Columbia Ferry Commission today announced its final decision on the price cap for BC Ferries’ under its next four-year business plan, known as Performance Term 6. The commission will allow average ferry fares to increase by a maximum of 3.2% annually from April 1, 2024 to March 31, 2028.
BC Ferries is one of the largest ferry operators in the world based on passengers transported annually and transportation infrastructure, and carried 21.6 million passengers and 9.4 million vehicles during the fiscal year ended March 31, 2023.
The British Columbia Ferry Commission (BCFC) provides independent oversight of BC Ferries’ regulated ferry service. Its primary responsibility is to regulate fares by setting the price cap. Additionally, it approves or sets conditions for major capital expenditures, monitors BC Ferries to ensure that it adheres to its service contract with the British Columbia provincial government, regulates unfair competitive advantage, conducts performance reviews, and encourage BC Ferries to meet provincial greenhouse gas emission targets, to innovate, and to minimize costs while maintaining safe and reliable services.
“A maximum 3.2% increase in annual fares will, I believe, be sufficient to allow BC Ferries to meet the financial demands of the upcoming performance term, while at the same time providing British Columbians with safe, reliable and affordable ferry service,” says Commissioner Eva Hage.
The final price cap is markedly lower than the preliminary 9.2% proposed by the Commission in March 2023, due to an additional one-time funding of CAD 500 million from the provincial government.
“This extra funding will help to alleviate a significant amount of the pressure facing our ferry system in the next performance term, and has allowed us to cap fares at a much lower level than anticipated,” says Hage.
In her full report, however, Hage warns of the many demands facing the ferry system in the years ahead. She cites ongoing labor supply issues, rising fuel prices and the escalating expenses associated with maintaining an aging fleet, and she expresses concerns with BC Ferries’ steep projected increase in operating costs – forecast to be 40% higher in 2025 than in 2022.
“While the government’s additional CAD 500 million has allowed us to cap fare increases in line with inflation for the next four years, we must remember that this is one-time funding,” says Hage. “The cost to operate the ferry system is increasing and will continue to increase at a rate higher than inflation.”
Hage’s price cap decision stipulates that BC Ferries must prepare a plan outlining how it will track actual capital expenditures against the forecast submitted to the commission and how it will measure the cost and service effectiveness of its investments in human resources.
Responding to the commission’s ruling, BC Ferries’ president & CEO Nicolas Jimenez has released the following statement regarding the British Columbia Ferry Commission’s ruling and observations on the company’s next four-year business plan known as Performance Term 6.
“BC Ferries gratefully acknowledges the Province’s $500 million contribution as integral to allowing the Commissioner to cap fare increases to 3.2% each year through to 2028. Rising operating costs are putting significant pressure on the system and this decision supports the ferry service operating in the public interest for the next four years.
“We understand the commissioner’s concern about BC Ferries’ ability to deliver on our ambitious capital plan,” said BC Ferries president & CEO Nicolas Jimenez,” in response to the ruling. “We’re actively working to increase our capacity to deliver on this plan over the longer term as it is clear that significant investment is required in vessels, terminals and IT systems to meet the public’s expectations of a modern ferry service.
“The commissioner raises important concerns regarding the pressures facing the ferry system due to escalating costs and asset renewal. Designing a ferry system for the future will necessarily require a conversation with, and input from, all levels of government, communities, First Nations and transportation partners.”
