BC Ferries fare increases to be limited to 3.2% annually until 2028

BC Ferries

Over the next four years, travellers using BC Ferries can expect lower fare hikes than what the ferry corporation’s growing cost pressures would require to balance the budget.

The independent BC Ferries commissioner announced today that the fare increases on BC Ferries will average 3.2% annually between April 1, 2024, and March 31, 2028.

This is deemed to be relatively low to maintain affordability, and it is considerably below the average 9.2% annual increase over the same period if the provincial government had not provided the ferry corporation with a $500 million investment.

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The one-time investment was first announced in February 2023 and was funded by the provincial government’s multi-billion dollar budget surplus for the 2022/2023 fiscal year. The provincial government is requiring BC Ferries to use its funding to moderate planned fare increases — effectively funding operating costs — and complete some capital projects related to the electrification of vessels and other green initiatives.

“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,” said commissioner Eva Hage in a statement today.

“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.”

But the ferry corporation is expected to see very rough waters for its financial situation towards the middle of this decade.

By 2025, BC Ferries’ operating costs are expected to be 40% higher than the 2022 fiscal year, with the ferry corporation’s ability to manage its costs in question.

In her report, Hage cited an independent analysis that identified a forthcoming significant increase in labour costs, particularly related to overtime hours.

BC Ferries also faces growing costs from maintaining its aging fleet and rising fuel prices.

Furthermore, BC Ferries is expected to see its financial results impacted significantly over the next four years from increased borrowing costs to carry out its capital plan. Over the next 12 years, BC Ferries is planning to order 11 new vessels, including four small ships and seven large ships, with most of the new vessels used to replace aging ships. Other capital plan projects include improvements to terminal facilities and technology upgrades, including the possibility of the installation of fare gates at terminals.

“BC Ferries must invest in the technology and people necessary to ensure safe, reliable ferry service for the people of coastal BC,” said Rob Fleming, BC minister of transportation and infrastructure.

“At a time of high interest rates, we made a prudent investment that allows BC Ferries to continue with its longer-term capital plans that will improve capacity and reliability while keeping fare increases low.”

Since 2020, in exchange for $308 million in initial pandemic-time emergency operating subsidies, BC Ferries has maintained a limited average annual fare increase of 2.3%, which ends on March 31, 2024, when the ferry corporation’s fiscal year ends. TransLink and BC Transit also curbed their fares through 2024 in exchange for the subsidies.

It was also announced today the provincial government is currently in the process of developing new punitive measures for BC Ferries for missed sailings for the reason of crew shortages.

Furthermore, the new services contract between the provincial government and BC Ferries reclassifies 1,433 round-trip sailings on 13 minor routes from the previous designation of “discretionary sailings” to “core services.”

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