BC Ferries receiving $500 million from government to avoid 10.4% fare hikes

BC Ferries receiving $500 million from the provincial government to avoid 10.4% fare hikes

BC Ferries (Shutterstock)

The Government of British Columbia is providing BC Ferries with a major funding infusion of $500 million towards both operational and capital costs.

Premier David Eby made the announcement early Sunday afternoon in reaction to the ferry corporation’s recent fare increase proposal to the BC Ferry Commission, in which the ferry corporation outlined, what Eby described as, “unacceptable fare hikes if we didn’t step in.”

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Due to global market inflation and the cost inflation of fuel prices, BC Ferries fares were set to increase by 10.4% annually over the next four years — between 2024 and 2028.

The provincial government’s new funding has effectively cancelled double-digit annual fare hikes, with the goal of keeping annual average fare increases below 3% annually. The final fare increases will be determined by the BC Ferry Commission, which is the independent regulator for coastal ferry operators, including BC Ferries.

“It will keep help fares stable so that people can continue to use the ferry service they rely on,” said Eby during the press conference, noting that this will keep both fares affordable for passengers and prevent added transportation costs to businesses for deliveries and cargo shipments, which would help prevent further consumer cost inflation.

A portion of the funding will also go towards capital costs related to the electrification of vessels and other initiatives to green the fleet and operations. It should be noted that BC Ferries has been seeking government funding to fully convert its six new Island Class vessels from diesel-electric hybrid systems to 100% battery-electric systems, which requires investments to modify the vessels and install charging infrastructure at the terminals.

All of this funding will come from the provincial government’s $5 billion surplus in the 2022/2023 fiscal year, which must be spent before the end of the fiscal year in March 2023.

Early on in the pandemic, TransLink, BC Transit, and BC Ferries received a combined total of $1 billion in emergency operating funding, with the ferry corporation receiving $308 million. As a condition of this previous funding assistance received in late 2020, all three transportation authorities are required to cap annual fare increases until 2024.

By March 31, 2023, BC Ferry Commission will determine the preliminary annual fare increases (price cap) for the next four-year period starting April 1, 2024. The final annual fare increases for the next period will be announced in late September 2023.

Earlier this month, TransLink announced it is seeking $500 million in additional emergency operational funding — $250 million from each of the federal and provincial governments — to cover forecasted revenue shortfalls over the three-year period between 2023 and 2025. This would avoid major service cuts and fare increases over this forthcoming period.

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