Passengers travelling on BC Ferries are getting a multi-year reprieve from any major fare increases through March 2028.
But as it currently stands, that could change from the flip to the next fiscal year in April 2028.
This week, BC Ferries CEO and president Nicolas Jimenz told Daily Hive Urbanized that based on the budgetary forecast made in 2023, a fare increase equivalent to about a 30% hike is projected to be necessary in order for the ferry corporation to simply keep up and manage its operations and capital costs.
He suggests that the fare increase cost pressures could potentially now be even higher than 30% if the budgetary forecast were updated today, given that cost inflation continued to be an issue over the past year.
“Since that time, inflation and costs have increased even faster across many aspects of our business and we are facing a growing funding gap as demands on our system increase,” said Jimenez.
“BC Ferries always looks for ways to run as efficiently as possible and that’s especially true in the current environment when our costs are rising and affordability is so important for our customers.”
Currently, fare increases require the final approval of the independent BC Ferries commissioner, which previously provided the approval in October 2023 for an average 3.2% annual fare increase between April 1, 2024 and March 31, 2028.
Before submitting its request to the commissioner, BC Ferries indicated that a 10.4% annual fare increase would have been necessary over the same four-year period to address rising operational and capital costs, had the provincial government not provided a $500 million subsidy to the ferry corporation in February 2023.
“Even with our current fares, we still don’t bring in the revenue we need to cover our operating costs and all our capital needs, and in many cases that means we’re falling short of what our customers expect,” Jimenez told Daily Hive Urbanized.
As one of factors for the forthcoming fare hike pressures, Jimenez also pointed to the growing cost of ordering new vessels, which has risen by about 40% since 2020.
Artistic rendering of BC Ferries’ new Island Class vessels. (BC Ferries)
For instance, BC Ferries did not reveal the cost for the four new additional small Island Class vessels currently under construction in a European shipyard, but the May 2024 announcement that the ferry corporation obtained a $75 million low-cost loan from Canada Infrastructure Bank provides a possible hint of the steep increase in the price per vessel.
Then in October 2024, BC Ferries announced it would split up its forthcoming order of buying seven new large vessels (each holding about 360 vehicles and 2,100 passengers, comparable to the existing Spirit-class vessels, which are the fleet’s largest) for the major routes linking Metro Vancouver with Vancouver Island and the Sunshine Coast. These larger vessels will replace the five existing C-class vessels built in the late 1970s and early 1980s.
Instead of acquiring all seven large vessels in a single order, BC Ferries has decided to divide the project into two phases. The initial order includes five vessels, scheduled to arrive between 2029 and 2031, followed by a second order of two vessels, expected by 2037. Additionally, BC Ferries plans to stretch the usability of two C-class vessels by a few more years before the final two new vessels arrive.
BC Ferries is facing significant cost pressures for such orders, even from globally renowned European shipyards, which have historically provided more competitive pricing than Canadian shipyards.
This decision on how to approach the massive procurement also coincides with growing criticism and pressure from BC-based shipyards, urging the ferry corporation to construct the seven large vessels locally. But BC Ferries warns such a domestic approach for the order, which is already expected to be the ferry corporation’s most expensive by a wide margin, could cost up to billions of dollars more, and require significant additional funding from the provincial and/or federal governments.
“Our customers have highlighted affordability as one of their top priorities. We simply cannot tell them they need to pay higher fares because it potentially costs us hundreds of millions — or even billions — more just because we built these ferries in BC,” Jeff Groot, a spokesperson for BC Ferries, previously told Daily Hive Urbanized.
Preliminary conceptual artistic rendering of the New Major Vessels. (BC Ferries)
Jimenez stated that he has expressed his concerns about BC Ferries’ financial future to Mike Farnworth, the newly appointed BC Minister of Transportation and Transit. He also told the Minister that there is a need to provide the ferry corporation with a more sustainable funding model.
“To ensure BC Ferries is able to make these necessary investments, we are looking to create a sustainable funding model that is critical for meeting the evolving needs of BC’s communities and supporting the infrastructure that our residents, businesses, and visitors to BC rely on,” continued Jimenez.
“We have a responsibility to provide our customers with reliable service to keep people and goods moving in British Columbia. We also know demand for ferry service will continue growing rapidly, driven by significant population growth along the BC coast. While this growth signals a positive trend for coastal communities, it also creates strain on our marine infrastructure and fleet, pushing our resources to their limits.”
Farnworth is facing similar requests from TransLink staff and TransLink’s Mayors Council, which are calling for additional operating subsidies and a new sustainable funding model for Metro Vancouver’s public transit system that is less dependent on fare revenue.
TransLink is contending with a fiscal cliff starting in 2026 — due to existing provincial government operating subsidies drying up, increases in operating and maintenance costs, increases in labour costs due to collective agreements, and lower gas tax revenue from the growth of battery-electric vehicles. Beginning in 2026, the operating revenue shortfall is pegged at $600 million per year, which does not include service expansion and improvements.
If the fiscal cliff is not addressed, TransLink has warned of the worst case scenario of a very significant curtailing of services across Metro Vancouver, including bus, SkyTrain, SeaBus, West Coast Express, and HandyDART services.