'Structural unfairness': Premier Eby calls for more federal funding for BC Ferries | Daily Hive

'Structural unfairness': Premier David Eby calls for more federal funding for BC Ferries

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Earlier today, Prime Minister Mark Carney announced major reductions to key transportation service fees in Eastern Canada, fulfilling a promise made during the recent federal election campaign.

Beginning later this week, tolls on the federally owned Confederation Bridge — which connects Prince Edward Island (P.E.I.) to mainland New Brunswick — will be cut from over $50 to just $20.

In addition, fares on several ferry routes serving Quebec and the Maritime provinces, including a constitutionally mandated service, will be reduced by 50 per cent for passengers, vehicles, and commercial traffic.

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Premier David Eby called the announcement the latest example of what he describes as the “structural unfairness” British Columbia faces in securing attention, funding, and resources from the federal government.

He argues that the current equalization payment formula disproportionately benefits other provinces at B.C.’s expense, with this being a long-standing grievance of B.C.’s premiers and something he has also previously raised directly with the federal government.

“The structural unfairness of the fact that not only are British Columbians paying equalization to eastern provinces in the amount of billions of dollars, not only are we paying billions of dollars additionally in equalization to Quebec and Manitoba and a billion dollars to Ontario, but also we have to watch the federal government show up on the East Coast and subsidize ferry users,” said Eby, noting that these provinces on the East Coast already receive a $300 subsidy for each dollar a BC Ferries user receives.

According to Eby, the annual federal subsidy level to BC Ferries has not been changed for nearly 20 years.

Under the original 1977 federal subsidy agreement, BC Ferries receives a subsidy for its operations, which effectively serves as an extension of the highway network, including the continuation of the Trans-Canada Highway reaching Vancouver Island. This annual payment increases with the Vancouver Consumer Price Index.

Based on BC Ferries’ annual financial statements, it received $36.92 million in federal subsidies for the 2024/2025 fiscal year, $35.64 million in 2023/2024, $33.34 million in 2023/2024, $32.18 million in 2022/2023, $32.03 million in 2021/2022, $31.34 million in 2020/2021, and $30.5 million in 2019/2020. This does not include the temporary pandemic-time federal operating subsidies.

Over the same period, BC Ferries’ annual operating budget has increased from $926 million in 2019/2020 to $1.18 billion in 2024/2025. This does not include BC Ferries’ growing multi-billion-dollar capital costs of renewing and expanding its fleet, terminals, and other infrastructure.

“The need to have a lens on decisions that are made in this country of fairness and proportionality is crucial… We’re going to need the federal government to have a serious look at their policy in relation to ferry users in British Columbia and ensure fair treatment for ferry users here,” continued the premier.

But this goes far beyond just federal funding for BC Ferries.

More broadly, Eby says the Government of British Columbia disagrees with the federal equalization formula, asserting that provincial residents and businesses effectively contribute more in federal taxes than they receive in return through federal funding and benefits from Confederation.

Federal equalization payments first began in 1957, before being embedded in the Canadian Constitution Act of 1982. Equalization is intended to ensure all Canadian provinces can provide reasonably comparable levels of public services at reasonably comparable levels of taxation, regardless of differences in their ability to raise revenue.

Equalization is based on a province’s fiscal capacity to generate revenue through taxes, with below-average fiscal capacity provinces receiving equalization payments to bring them up to the national average. Such equalization comes directly from general federal revenues.

However, for decades, the provincial governments of B.C. and Alberta have argued that the system is unfair, with both provinces receiving relatively little in return despite their residents contributing significantly to federal revenues. For many years, Quebec has received the largest share of equalization payments in absolute terms.

“The ask is very straightforward. We need the same per capita funding, the same per-person funding that any other province gets through any other announcement that’s made across the country. It doesn’t have to be the same, we’re not the same as other jurisdictions, but it has to be an equal amount of funding available to provinces based on the number of people that live there,” said Eby.

“The territories are a special case, the provinces are not. Fairness, equality, and access to programs in the federal government for provinces is mission critical. It doesn’t matter if it’s an economic program, a subsidy for ferries, subsidies for road building, subsidies for immigration, health care funding, childcare funding, you name it.”

Last year, Eby also made a formal request to the federal government to provide meaningful funding toward six significant B.C. infrastructure projects, including the provincial government’s new replacement of the George Massey Tunnel and Metro Vancouver Regional District’s new Iona Island Wastewater Treatment Plant.

The new tunnel’s cost was last stated at $4.15 billion in 2020/2021, with the costs now believed to be significantly higher. Reports earlier this year suggest the federal government offered a funding commitment in the range of hundreds of millions of dollars, but the provincial government turned it down for its belief that this amount was not a fair federal contribution toward the project.

The federal government, however, did provide $250 million toward the $750 million cost of the first phase of the new sewage treatment plant, but it came with significant strings attached relating to the regional district holding back on some development fee hikes, with the provincial government also involved in making those various policy changes. The regional district and provincial government are hoping to secure billions of dollars more from the federal government in the future to help account for the project’s total multi-phase cost of up to $9.9 billion.

BC Ferries continues to face growing capacity shortfalls and reliability issues due to an aging fleet and rising demand, compounded by recent cost pressures.

Its plan to procure four new major vessels recently sparked controversy, which also involves the federal government-backed Canada Infrastructure Bank providing $1 billion in low-cost financing. The vessels will be built by a Chinese state-owned shipyard — drawing intense criticism over the lack of Canadian shipbuilding involvement.

B.C. officials and shipyards argue this highlights the need for greater federal investment in domestic shipbuilding and long-term ferry infrastructure to ensure reliability and economic resilience.

Federal officials have also criticized the move; however, BC Ferries has countered that the federal-supported ferry services in the Maritime provinces also recently acquired a vessel from the same shipyard in China.

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