The BC Ferry Commissioner today set the “preliminary price cap” of a 1.9% increase on ferry fares for each of the four years 2016-2019, challenging BC Ferries to find further productivity improvements of $27.6 million by the end of the four-year Performance Term.
So what does this “preliminary price cap” mean?
Ahead of each new performance term, BC Ferries must submit forecasts of expenditure, traffic and revenue to the BC Ferry Commission, assuming existing service levels will be maintained. This information was provided by BC Ferries in December 2014, though most of the financial detail was excluded from the submission before publication.
The Ferry Commissioner’s task is to review those forecasts, making adjustments as necessary, before calculating a “preliminary price cap” that assumes government support continues at existing levels. Following a period of public consultation, government will then consider whether further action is necessary to close the gap between expenditure and anticipated fares income. Any adjustments are then taken into account before a Final Price Cap is announced by the Ferry Commission in September.
The 1.9% preliminary price cap announced today signals a welcome move towards the Transportation Minister’s commitment to achieve annual price cap increases in line with inflation. Latest CPI statistics show annual inflation close to 1.1% in BC, following the recent fall in fuel prices, so there’s still some way to go.
The Ferry Commissioner’s full statement can be downloaded here.