Federal budget's $1.3 billion for Eastern Canada ferries fuels BC Ferries funding calls | Daily Hive

Federal budget's $1.3 billion for Eastern Canada ferries sparks calls for more BC Ferries funding

Spirit of British Columbia vessel. (BC Ferries)

A new federal funding package for ferry services in Eastern Canada is drawing criticism from the union representing the workers of BC Ferries and Hullo Ferries, who assert the Government of Canada is overlooking the West Coast as passengers face the possibility of steep fare increases before the end of this decade.

The BC Ferry & Marine Workers’ Union (BCFMWU) has called on Prime Minister Mark Carney to explain why last week’s 2026 federal budget calls for $1.3 billion for ferry services in Eastern Canada without offering comparable help for BC Ferries.

“The prime minister says he wants to build a stronger, more connected Canada. Apparently, that doesn’t include the Pacific coast,” said BCFMWU president Eric McNeely.

You might also like:

The budget sets aside $1.3 billion over eight years, beginning in the 2026/2027 fiscal year, to renew the Ferry Services Contribution Program. This would help maintain ferry connections in Eastern Canada, including through new terminals at Wood Islands, Prince Edward Island, and Caribou, Nova Scotia, and the chartering of temporary replacement vessels.

The union argues that the federal government’s support for ferry travel is heavily tilted toward the East Coast. According to its figures, the federal government covers roughly 43 per cent of the operating and maintenance costs for Atlantic ferry services, compared with about three per cent for BC Ferries.

It also points to B.C.’s federal ferry funding agreement dating back to 1977, arguing that the arrangement provides too little support for the system’s needs.

According to the federal government’s Transport Canada department, based on the 1977 agreement and the updates to the terms and conditions made in the 2005/2006 fiscal year, B.C.’s provincial government is expected to receive $37.8 million in funding in the 2025/2026 fiscal year to help support BC Ferries. This is expected to grow incrementally to $39.05 million for each of the 2026/2027, 2027/2028, and 2028/2029 fiscal years. There are scheduled plans to perform an evaluation of this agreement 2027/2028.

“British Columbians pay federal taxes too. Why should our ferry passengers get less support than Canadians on the Atlantic coast?” said McNeely.

The gap in federal funding for coastal ferries attracted renewed scrutiny during the controversy over BC Ferries’ 2025 announcement that a shipyard in Mainland China owned by the Government of China would build its first four Summit-class vessels.

These new ships will become the largest in the entire fleet when they enter service from 2029 to 2031, serving the major routes linking Metro Vancouver with Vancouver Island and the Sunshine Coast. They are also BC Ferries’ largest capital expenditure ever, within the range of well over a billion dollars. The ferry company has not disclosed the contract price to protect its competitiveness for future orders.

The criticism reinforced longstanding calls for greater financial support from the federal government. The union pressed for fair, permanent funding to a level comparable to that provided to Marine Atlantic, while business organizations such as the Greater Victoria Chamber of Commerce urged the federal government to support B.C.’s coastal ferry network as it does for services in the Atlantic provinces.

BC Ferries also previously highlighted that its federal infrastructure financing must be repaid, unlike the grants and ongoing operating funding provided to ferry services in Eastern Canada.

However, a key distinction is that the federally supported eastern routes connect different provinces and directly fall under federal jurisdiction.

Marine Atlantic has a specific constitutional role: its year-round service between North Sydney, Nova Scotia, and Port aux Basques, Newfoundland and Labrador, fulfils the federal government’s constitutional obligation to maintain that connection. Other federally supported eastern routes receive funding through the separate Ferry Services Contribution Program.

Similarly, the 1997-built, 13-km-long Confederation Bridge, which was built and is operated and maintained by a private contractor for the federal government, fulfills a constitutional requirement for a year-round transportation link between Prince Edward Island and the Canadian mainland. It forms a segment of Highway 1.

The latest federal budget follows the Carney administration’s 2025 cuts to Confederation Bridge tolls and eastern ferry fares, which renewed scrutiny of the disparity in federal support for these transportation links and BC Ferries. The federal government substantially reduced bridge tolls and halved fares for passengers, vehicles, and commercial traffic on the federally supported Eastern Canada Ferry Services. It also funded a 50 per cent reduction for passengers and passenger vehicles on Marine Atlantic’s two routes between Nova Scotia and Newfoundland, while freezing its commercial freight rates.

In contrast, BC Ferries’ operations are directly under the jurisdiction of the provincial government. BC Ferries is currently organized as a private company wholly owned by the provincial government. Up until 2003, it was a provincial Crown corporation.

In late 2024, BC Ferries’ leadership warned that the ferry company’s growing cost pressures — rising operating costs, labour costs, and capital costs of fleet and terminal renewal — could result in the equivalent of a single-year fare increase of up to 30 per cent in 2028. More recently, BC Ferries has been hit by added fuel costs due to the global impacts of the U.S.-led war in Iran.

That previous fare hike figure was a warning about a potential increase, rather than an approved fare change. The independent BC Ferries Commissioner is currently reviewing the company’s submission for the four-year period beginning in April 2028 to determine how much average fares will be allowed to rise.

For the current period ending in March 2028, average annual fare increases are capped at 3.2 per cent, supported by a previous $500-million operating funding contribution from the provincial government in 2023 that avoided a 10.4 per cent fare hike per year over four years from 2024 to 2028.

BC Ferries carried about 23.3 million passengers and 10 million vehicles in the previous fiscal year ending in March 2026. It is Canada’s largest and busiest ferry network by a wide margin, and one of the largest in the world. According to the union, it is estimated that BC Ferries also moves about $8 billion worth of cargo and goods each year.

BC Ferries forms the lifeline between Vancouver Island — where about one million people live — and the Canadian mainland, as well as for other coastal communities. It is a continuation of the highway system, including Highway 1.

McNeely argues the consequences of higher fares extend beyond the cost of individual trips, adding to expenses for businesses that depend on ferries to move their products. The union also warns that disruptions associated with aging vessels and terminals hurt the economy.

The union is urging Premier-elect Lorne Doerkson and his incoming Conservative provincial government to press the federal government for a larger contribution to the coastal ferry network.

BC Ferries’ financial situation is likely to become an issue of contention for this new provincial government during its term. TransLink is similarly also facing a fiscal cliff beginning in 2028, when the provincial government’s previous operating subsidies are expected to deplete. David Eby’s outgoing BC NDP administration had promised to enact new legislation in 2027 to provide TransLink with a major new revenue source to eliminate its need to depend on renewed provincial subsidies and falling gas tax revenues. Apart from ruling new or increased taxes, Doerkson’s Conservatives have yet to directly address how it would help resolve the financial situation of Metro Vancouver’s public transit authority beyond 2027.

The funding debate also comes amid a sudden leadership change and an internal service review at BC Ferries. On Oct. 26, 2026, the ferry company’s board of directors replaced president and CEO Nicolas Jimenez with interim leader Brian Anderson — its vice-president of strategy and planning — without publicly explaining the specific reasons for Jimenez’s departure. The board also launched a “Revitalization Review” to identify ways to improve efficiency and service for passengers and coastal communities. A formal search for a permanent CEO will follow the review.

You might also like: