BC Ferries faces possible 30 per cent annual fare increases as federal government declines to add funding

Canada's transport minister told ferry-dependent communities in British Columbia on October 27 that the federal government has no plans to increase its annual subsidy to BC Ferries, closing off one avenue being explored by local governments as the company warns fares may need to rise up to 30 per cent a year by 2028.

The Gulf Islands Driftwood reported on November 3 that Transport Minister Steve MacKinnon replied to the Islands Trust in a letter dated October 27, explaining the federal government's position on funding the province's ferry network. That reply is now a public record of the Islands Trust. The letter arrived as BC Ferries was already deep into the year-long regulatory review that will set price caps for the next four years, and as the company completed a leadership change two days after a provincial election that brought a new government to power.

What the federal government pays

The federal government pays $38.6 million a year to BC Ferries under an agreement dating back about 50 years, the Gulf Islands Driftwood reported. That arrangement turns 50 this April.

By comparison, BC Ferries reported $985.1 million in operating expenses for the fiscal year ending March 2025, the Gulf Islands Driftwood reported. The federal contribution covers about 4 per cent of those costs.

A Library of Parliament analysis prepared for Courtenay-Alberni MP Gord Johns found the federal government pays $291 per passenger to support Marine Atlantic, the ferry service between Newfoundland and Nova Scotia, versus $1.63 per passenger for BC Ferries.

That per-passenger gap sat at the centre of the case local governments were making. The Islands Trust Council and the Capital Regional District Board each voted unanimously in September 2026 to support a campaign by Johns and Saanich-Gulf Islands MP Elizabeth May asking Ottawa to bring western ferry funding in line with what Atlantic Canada receives. The Islands Trust published its advocacy letter on September 23, 2026, and the CRD sent a separate letter. The October 27 MacKinnon reply was the first response the Gulf Islands Driftwood obtained.

What the minister said

In his October 27 letter to then-Islands Trust chair Laura Patrick, MacKinnon said federal support for ferries is limited to its constitutional obligations: serving remote communities and helping fund long-standing interprovincial services. He cited Marine Atlantic as an example of that constitutional role.

He listed contributions the federal government has made to BC Ferries: waiving tariffs on importing used vessels, a $75 million loan through the Canada Infrastructure Bank for the new Island Class ferries, and $308 million in federal-provincial pandemic funding shared with the province in 2020.

MacKinnon directed questions about ferry costs and fares to the province, saying the coastal ferry services contract between BC and BC Ferries is what sets routes, service levels and fees, and that those questions belong with the provincial government. The Gulf Islands Driftwood reported that he gave no indication the federal position would change.

The fare increase warning

BC Ferries has cautioned that without more revenue, annual fare increases of up to 30 per cent may be needed by 2028. The Gulf Islands Driftwood reported this warning on November 3.

The company filed its comprehensive submission with the BC Ferries Commissioner on October 1, 2026, starting the Performance Term 7 regulatory review. That year-long process sets the maximum fare increases BC Ferries may charge for the next four-year period. The commissioner, an independent office, holds the authority to set price caps. BC Ferries proposes; the commissioner decides.

The public consultation phase of that review is open to ferry users across BC. Comments submitted to the commissioner form part of the record the commissioner uses to set price caps. The review will produce a decision before the new term starts.

Changes at the top of BC Ferries

Two days after the BC Conservatives won the October 24 election, BC Ferries CEO Nicolas Jimenez left the company on October 26. Brian Anderson, formerly the company's vice-president of planning and strategy, was named interim CEO. The board announced a "revitalization review" at the same time, the Gulf Islands Driftwood reported. The leadership change came while the Performance Term 7 submission was already filed and the review underway.

What the new provincial government has said

The BC Conservative platform, published October 2026, does not include a specific commitment on BC Ferries fares or the federal funding gap. The scope of the new government's review of the company remains to be seen when Premier-designate Lorne Doerkson's cabinet is announced on November 20.

The initial count from Elections BC, as of October 26, 2026 at 10:34 PST, showed the Conservative Party leading in 63 of 93 districts with 862,688 votes and 48.06 per cent of ballots counted. That is enough for a majority in the legislature. MLAs will be sworn in November 19 and cabinet on November 20.

The incoming government has not said whether it will raise the question of federal ferry funding in talks with Ottawa or whether it will direct the company's review in any way.

What comes next

The Islands Trust Council is meeting in Victoria from November 12 to 14, 2026. The ferry funding issue is expected to appear on a future agenda. The council's next quarterly meeting is December 8 to 10, 2026, when trustees plan a fuller discussion about their advocacy strategy and priorities going forward, the Gulf Islands Driftwood reported.

Ferry users across BC can submit comments to the BC Ferries Commissioner during the Performance Term 7 public consultation, which runs as part of the year-long review. The review's outcome will determine the maximum fares BC Ferries may charge in the next four-year period.