BC Ferries is not allowed to charge average fares greater than the price cap in each route group. But what happens if some factor beyond its control puts the company under a new, unexpected and significant cost burden?
In extraordinary circumstances, BC Ferries may apply to the Commissioner for an extraordinary price cap increase in relation to a route group.
Such circumstances include the need to deploy of a new vessel (not previously recognized), an extraordinary increase in the price of any non-controllable input such as fuel, an unanticipated and extraordinary change in traffic levels and the introduction of new safety or other regulations.
Before authorizing an extraordinary price cap increase, the Commission must publicize the application and allow the public one month to comment.
Under the Coastal Ferry Services Contract, if the Commissioner authorizes an extraordinary price cap increase, the Province may choose (but is not obliged) to increase its financial contribution, by raising its per-sailing service fees for the particular route or route group affected. This would soften the impact of the price cap increase.
The Coastal Ferry Service Contract requires BC Ferries and the Province to discuss the possibility of a service fee increase within 10 days of a preliminary decision by the Commissioner to authorize an extraordinary price cap increase. Following the Province’s decision, the Commissioner will then issue a final ruling.
To date, BC Ferries has made two applications for an extraordinary increase, in June 2005 and November 2005. Click here for details on BC Ferries’ applications and the Commission’s subsequent rulings.