All seven were transported safely to the coast guard's Sea Island Station in Richmond, B.C., and released after being checked at a local hospital. The children are aged three to 16.
The coast guard says the family was relocating from Delta, located just south of Vancouver, to a community up the coast, and had put all their possessions in a newly purchased 10-metre gillnet fishing boat for the trip.
But around 8 p.m. PT the vessel began taking on water near the entrance of Porlier Pass, a potentially rough section of water because of the strong tidal rapids between Valdez and Galiano islands in Georgia Strait.
The family issued a mayday call by radio saying the vessel was sinking and officials launched a rescue effort by air and sea.
The Canadian Coast Guard hovercraft Siyay was dispatched along with two coast guard auxiliary vessels, a U.S. Coast Guard helicopter and a lifeboat from Ganges, B.C., on Saltspring Island.
BC Ferries spokesman Darin Guenette said two BC Ferries vessels were also diverted to respond to the call. The Spirit of Vancouver Island was leaving Active Pass en route to Tsawwassen when it was diverted, while the Queen of Cowichan was diverted from its trip to Horseshoe Bay.
Ron MacDougall, acting sub-lieutenant with the Joint Rescue Co-ordination Centre in Victoria, said the hovercraft arrived first to find the vessel barely afloat.
He said it looked as if the boat had overturned but not yet sunk.
"Basically how I understand it is that they just clung on board, to the bottom of the vessel," he said.
"I think the vessel overturned and they clung onto it for 25 minutes, which is quite amazing, and it's a great end to what could have been a very tragic story."
Coast guard spokeswoman Susan Pickrell said the two parents and five children had only two life-preservers among them and the children were near hypothermia when they were rescued.
Pickrell said that by the time the hovercraft transported the family back to its Sea Island Station, they were in pretty good shape and all were released after being examined at Richmond Hospital.
The swamped boat was towed to nearby Galiano Island.
Google Maps: Porlier Pass, Georgia Strait