B.C.’s ferry commissioner has given preliminary approval for fares to increase up to 9.2 per cent each year until 2028, but this amount was determined without factoring in $500 million the B.C. government pledged to the service, which the commissioner says may reduce the hike.
Eva Hage, the ferry commissioner, released the preliminary decision and says BC Ferries is not in as “robust” a financial position as was expected due to rising inflation and labour difficulties.
“Continued labour supply issues, rising fuel prices, escalating costs associated with maintaining an ageing fleet, and a 12-year, $5.2-billion proposed capital plan driven by a need to replace vessels will create substantial pressure,” Hage said in a news release.
“Given this, we believe that a price cap of 9.2 per cent is appropriate and necessary to allow BC Ferries to meet the demands of the upcoming performance term.”
Previous four-year increases were capped at 2.3 and 1.9 per cent. The commissioner notes the current increase is conditional on the ferry company identifying $10 million in operating cost savings over the four years.
“The corporation must demonstrate good fiscal management and find a solid footing in which expenses align with revenues,” Hage said. “To that end, we are requiring BC Ferries to provide us with a plan that sets out the steps it will take, in consultation with the province, to ensure a financially sustainable, safe, reliable and affordable ferry system over the long term.”
The fare increase does not take into consideration the $500 million the provincial government has allocated for the ferry company, and the news release notes this is because details on how that money will be applied have not yet been determined.
“Certainly the $500 million will help alleviate a significant amount of the pressure facing our ferry system … and allow us to lower the final price cap accordingly,” Hage said.
READ MORE: B.C. pledges $500 million to keep ferry fares low for travellers as inflation soars
Rob Fleming, B.C.’s minister of transportation and infrastructure, says the government is putting this money towards BC Ferries in order to keep fares lower.
“As we said when we announced the support to protect affordability, we know that rising costs, the impacts of the pandemic, and BC Ferries’ significant capital plan put upward pressure on ferry fares. We understand how important affordable and reliable ferry service is for people, as well as for goods movement,” Fleming said in a statement.
“I want to assure British Columbians, particularly those who rely on our coastal ferry service, that our goal of holding annual average fare increases to no more than 3 per cent remains.”
The commissioner has until Sept. 30 to make the final decision on the maximum amount BC Ferries can increase the fares.