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External reviews assess BC Ferries’ operations, forecasts

The BC Ferries Commissioner’s Report on the Preliminary Price Cap Decision for the Fifth Performance Term contains three external performance reviews conducted by PricewaterhouseCoopers LLP.

These reviews assess BC Ferries past performance and evaluate the company’s submissions related to forecasted performance and trends for the current and next performance terms.

Highlights include:

Traffic volumes and fares

Vehicle and passenger volumes from 2015 to 2018 were stronger than anticipated. In particular, this was seen in major routes, as fuel costs were low, and a strong economy and low Canadian dollar encouraged tourism from the U.S. and travel within B.C. and the rest of Canada. Lower fare price increases beginning in 2017 to levels less than general inflation, fare freezes and fare reductions in 2018 also contributed to traffic growth.

Growth in fiscal 2019 and 2020 will continue, but at slower rates of 2.6% and 1.7%, respectively.

The fare and seniors’ 100% discount initiatives for travel Monday to Thursday on major and minor routes are contracted to be in place until March 2020.

Variable pricing is expected to drive traffic volumes by offering customers discounted fares on low-demand sailings on the major routes between Vancouver Island and Metro Vancouver.

BC Ferries was fully compliant with fourth-term performance price caps set for April 1, 2016, to Sept. 30, 2018. This was based in part on the provincial government fare initiative that resulted in reduced fares on the minor routes and a decision by BC Ferries not to raise fares on routes starting in fiscal 2018. The actual fare index is well below the price cap.

Foregone revenue from fare initiatives will total $58.8 million for the fiscal years 2018 to 2020.

Capital plan

Actual capital expenditures in the current performance term was $842 million, which is $255 million less than BC Ferries forecast, primarily because of:

  • the deferral of projects, including the Langdale terminal development and the fleet maintenance unit site development. Deferrals on these two projects have also impacted the timelines of other upland infrastructure projects planned for Swartz Bay and Horseshoe Bay.
  • $50 million in duty savings on the first three Salish class vessels.

Fuel costs

Fuel is BC Ferries second-largest expense and is subject to a fuel management program that aims to minimize cost and consumption. Overall fuel expense declined, due to a reduction in fuel prices and the shift to cleaner and lower-cost alternative fuels. For example, BC Ferries estimate that fuel savings from the introduction of three Intermediate-class ferries and engine conversions of two Spirit-class vessels total $17.1 million.


BC Ferries will, in the next performance term, seek efficiencies through use of low-carbon technology, improved maintenance capacity and increased labour flexibility, variable pricing, retirement of older ships and increased foot passenger capacity. Other ideas under consideration include a frequent traveller program and new services, including:

  • passenger-only service, similar to the Vancouver Seabus, from Royal Bay in Colwood to Ship Point in downtown Victoria and from Royal Bay to Esquimalt Harbour at Canadian Forces Base Esquimalt;
  • intermodal partnerships with car-sharing services and transit operators to create a seamless and efficient travel experience for ferry users.