The rising costs have created “a growing funding gap” that Jimenez says will require “a sustainable funding model” to address.
The CEO of B.C. Ferries is warning the company may need to increase fares by 30 per cent or more in 2028, when its current fare structure expires.
Nicolas Jimenez says in a written statement the provincially owned corporation had forecast last year that such a price rise would be needed to keep up with operating and capital costs. But, he said costs since then have jumped, including a 40 per cent increase in shipbuilding expenses since 2020.
The rising costs have created “a growing funding gap” that Jimenez says will require “a sustainable funding model” to address.
With 27 terminals and with 16 aging vessels in its fleet — the Queen of New Westminster is now 60 years old — building new ships and retrofitting terminals is a top priority, Jimenez told a Victoria Chamber of Commerce meeting recently.
B.C. Ferries has planned for 15 Island-class vessel replacements between now and 2030. Four all-electric versions of those vessels — which are used on smaller routes — are currently being built in Romania.
The company is also planning to build seven new large ships for its major runs.
Increased capital costs also extend to the infrastructure the ships require. A significant percentage of B.C. Ferries’ marine-based structures are in what Jimenez described as a “marginal or poor state.”
“We’ve got 30-plus terminals that require work in the next number of years. That’s almost one in three terminals that need some significant investment,” he said.
Providing electricity at terminals from which the new electric ships will run also promises to be a complex and costly process.
Overall, B.C. Ferries’ 12-year upgrade plan will push its capital costs up between 10 and 15 per cent each year. That’s hundreds of millions of dollars that Jimenez says B.C. Ferries can’t raise alone.
Last year, the province said it was providing $500 million to B.C. Ferries to help keep fares down, while the Office of the B.C. Ferries Commissioner had set annual fare increases of 3.2 per cent until 2027.
The province had said that without the additional funding, the fare increase would have been about 9.2 per cent a year.
Jimenez says he has already spoken to B.C. Transportation Minister Mike Farnworth about the situation and promises to work with the province to resolve the issue.
“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 says.
“Our customers have been clear in their expectations for a seamless, integrated transportation experience, and the pressing need to replace aging assets requires further investment beyond what the current model allows for.”
B.C. Premier David Eby said Wednesday that while the province will work with B.C. Ferries to keep fares affordable, “there is an onus and … a responsibility on B.C. Ferries to do what they can to bring down their operating costs.”
“We’ve provided direct financial support to B.C. Ferries to ensure that British Columbians could rely on consistent fares,” Eby said. “That consistency in fares is very important to British Columbians, especially right now when they’re feeling that affordability pressure.
“Any agreement and discussion going forward about how we can support them needs to have two parts. One is ensuring we’re protecting British Columbians, and the other is reassurance to British Columbians that B.C. Ferries is operating as efficiently as possible, bringing down costs wherever possible.”
With file from Sidney Coles, Local Journalism Initiative