BC Ferries has been granted a new framework for increasing its fares over the next four years.
The Office of the British Columbia Ferries Commissioner, which regulates the ferry corporation, approved a maximum fare increase of 2.3% annually from April 1, 2020 to March 31, 2024.
“This final price cap decision confirms the preliminary decision announced on April 1 of this year,” said commissioner Sheldon Stoilen in a statement. “We believe these increases are in the public interest – affordable to ferry users and taxpayers, while sufficient to allow BC Ferries to meet their financial targets, barring any extraordinary situation.”
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BC Ferries has not decided how it will react to the new room it has received to increase its fares, but the commissioner states the decision was based on updated traffic forecasts, changing economic conditions, capital investments, operational costs and efficiencies, and overall performance.
“It is important to recognize that there may be times when price caps for a performance term will have to be set above the inflation rate to meet the financial targets and to protect the financial sustainability of the ferry operator, particularly if large capital expenditures are being incurred,” reads the commissioner’s report on the decision.
“Price caps may also have to be adjusted, from time to time, as a result of extraordinary circumstances.”
In addition to the final price cap decision, the commissioner mandates BC Ferries to achieve an efficiency target equivalent to 1% of annual operating, maintenance, and administrative expenses.
As well, the ferry corporation is encouraged to establish greenhouse gas-reduction targets and pursue further fleet electrification, as soon as the infrastructure and technology are available.
BC Ferries has a 12-year, $3.9-billion plan of upgrading a dozen ferry terminals and replacing ageing vessels, including a rebuild of Horseshoe Bay terminal and acquiring five new large vessels to replace the Queen of New Westminster, Queen of Alberni, Queen of Coquitlam, and Queen of Cowichan.