BC Ferries fares can (but won’t) rise 9.2% per year under new preliminary price cap

The BC Ferry Commission has released its preliminary decision on raising the price cap on fare increases, but it does not factor in the $500M that the province has allocated to keeping annual rises to 3%. Commissioner Eva Hage confirmed on Friday that that money will “help alleviate a significant amount of the pressure facing our ferry system” and lead to a price cap reduction in her final decision, which comes out Sept. 30.

The price cap will apply to “Performance Term 6” (PT6), the upcoming four-year term from April 1, 2024 to March 31, 2028.

The cap applies to the average overall increase, meaning that certain fares could rise more than the set amount and others could rise less (e.g. cars vs. walk-ons, or main routes vs. small routes) as long as it works out to 9.2% overall. When applied four times, a 9.2% cap would lead to a 42.2% rise from the original amount while a 3% cap would lead to a 12.6% rise.

The 9.2% would be a large leap from the 2.3% cap in the previous term. But the most recent BC Ferries report, released a month ago, reveals a corporation facing rising costs, high staff turnover, and inflation in the midst of economic uncertainty and an expected recession. BC Ferries applied to the commissioner (its independent regulator, tasked to “balance the interests of ferry users and taxpayers with the financial sustainability of the ferry operator”) for a higher cap. The report anticipated that that increase could bring in $15.9 million more in ticket revenue in the 2024 fiscal year.

In the preliminary decision, the Commission acknowledges that “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.” This merits the higher cap, Hage determined. But she has made that increase contingent on BC Ferries finding $10M in operating cost savings during PT6, and has cut the record-high capital plan by $330 million.

In a release responding to the preliminary cap, BC Ferries President and CEO Nicolas Jimenez said that the capital plan “needs to be ambitious” so that service “keeps pace with growing demand and aging assets,” but acknowledged that the plan is in its early stages and will be adjusted. Jiminez also stressed, like Hage and like Transportation Minister Rob Fleming (who is also Victoria - Swan Lake MLA), that the $500 million in funding will be incorporated by September.

Read more on the plan and the BC Ferries report in our previous article.