10/01/2012 02:47 EDT | Updated 09/30/2013 09:55 EDT

BC Ferries Fare Hikes Capped At 4 Per Cent Annually

VICTORIA - BC Ferry customers will soon be paying more for less service.

British Columbia Ferry Services spokeswoman Deb Marshall said Monday ferry users can expect to see fare increases of 12 per cent over the next three years.

Cuts to service on the major routes between Victoria, Nanaimo and the Lower Mainland start on Oct. 13, she said.

B.C. Ferry Commissioner Gord Macatee approved the fare increases as part of his mandate as the independent regulator of the ferry service.

It means fares can increase by 4.1 per cent starting April 1, 2013, followed by another four per cent increase in April 2014 and a 3.9 per cent hike in April 2015.

Macatee is responsible for setting and enforcing the fare cap, which also permits fares to rise and fall depending on fuel costs.

Marshall said BC Ferries expects to use the full fare increase amount permitted by the cap.

"We have been going to the full maximum price cap because of our capital expenditure program," she said.

The B.C. government handed BC Ferries $80 million last June to keep fare increases in check after an earlier report suggested fares could rise between 16 per cent on the major routes and 80 per cent on northern and smaller routes.

But the $80 million from the B.C. Liberal government, included in last spring's Coastal Ferry Act, also called on BC Ferries to cut costs by $54 million over four years.

"We do need to achieve net savings of $30 million in service level adjustments, and that will be over the next four years," Marshall said, adding BC Ferries also was expected to find millions more in efficiencies.

The additional $24 million represents internal cuts within the ferry system over four years.

Starting Oct. 13, BC Ferries will cut some Saturday morning and evening sailings from the Tsawwassen and Duke Point runs. Extra sailings on Fridays, Saturdays and Sundays on the Swartz Bay to Tsawwassen route and on Nanaimo's Departure Bay to Horseshoe Bay route are also being cut.

Marshall said those first service cuts will save BC Ferries $1 million annually.

She said the government is expected to launch a series of community consultations later this fall that examines the service cuts and fare increases facing smaller communities on ferry routes.

Currently, it costs $157.90 for two adults in a vehicle to travel from Swartz Bay to Tsawwassen, return, on a B.C. Ferry.

B.C. Ferries' year-end financial report included losses of more than $16 million, with vehicle traffic at a 13-year low and the fewest passengers in 21 years.

But Marshall said ridership numbers for August, the busiest month of the year, show an increase of 2.2 per cent for passengers, while vehicle traffic was up 1.3 per cent from the same period last year.