Carbon tax savings could limit future BC Ferries fare hikes
Fares on British Columbia’s coastal ferry system could see a relative overall decrease over the coming years due to lower fuel prices, ever since the provincial government dropped its consumer carbon tax.
BC Ferries is proposing to use savings from the elimination of the provincial carbon tax to help shield passengers from future fare hikes.
Earlier this month, the ferry corporation formally announced a proposal to the independent BC Ferries Commissioner, asking to redirect those savings into its existing fuel deferral accounts. These accounts are designed to smooth out fluctuations in fuel prices by collecting savings when costs drop and covering shortfalls when costs rise.
“If the Commissioner approves our proposal, it will allow us to use the carbon tax savings in a way that helps maintain consistent fares for customers,” said Brian Anderson, Chief Financial Officer of BC Ferries, in a statement.
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“By spreading the savings over a longer period of time, it enables us to keep fares steadier and give people more certainty when planning their travel.”
The company noted that the current “set price” for fuel — approved in September 2023 — factored in the consumer carbon tax. But with the provincial tax removed as of April 1, 2025 (which was triggered by the federal government’s decision to axe its own consumer carbon tax), actual fuel prices are now lower than anticipated.
BC Ferries wants to adjust the set price so that the savings can be distributed more evenly over the next several years, instead of being returned all at once.
The ferry corporation notes this approach would help avoid a sudden short-term fare dip that could be followed by a sharper increase later, while also cushioning the impact of other cost pressures facing the system. In Fall 2024, BC Ferries warned of a scenario of implementing a single-year 30 per cent fare hike in 2028 to cover growing operating and capital costs, and structural financial gaps triggered by the pandemic.
The independent BC Ferries Commissioner will review the proposal before making a decision.
BC Ferries also periodically adjusts fares based on the fluctuating market prices for fuel, known as fuel surcharges (when there is an upward pressure on fuel prices) or fuel rebates (where there is a downward trend on fuel prices).
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- BC Ferries warns of 30% fare hike in 2028 amid rising costs
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- Premier David Eby rules out cancelling BC Ferries' China-built ships contract
- Federal infrastructure bank to provide BC Ferries with $1-billion loan toward China-built ships
- What we know about the improved design of BC Ferries' New Major Vessels