Ally

It is almost certain that BC Ferries will be allowed to raise fares as much as two times the rate of inflation, the British Columbia Ferry Commission said in its annual report.

Ferry commissioner Martin Crilly said government has decided not to increase its $150-million subsidy to the service, so its preliminary ruling on fare increases will likely stand. That allows for fares on the main Vancouver to Vancouver Island runs to increase by a minimum 9.4 per cent. Fares to outlying islands can rise by at least 14 per cent, plus an inflation factor, by 2012.

The commission will make its final ruling Sept. 30.

Crilly said BC Ferries is still in a "catch-up phase," and has to cope with an accelerated replacement of vessels and ferry-terminal improvements on top of general inflation and high fuel costs not fully recovered by fuel surcharges.

He added that government subsidies for less-travelled routes have "not increased as fast as BC Ferries' revenue needs."

However, Crilly also called on BC Ferries to increase its efficiency by one per cent per year up to 2012 to mitigate fare increases.

Kim Benson, chairwoman of the Islands Trust, which represents Gulf Islands communities, said fare increases will hurt the viability of ferry-dependent communities, and won't necessarily raise revenue if higher fares deter people from visiting the islands.

Ferry routes shouldn't have to cover all of their costs through fares, she said, "any more than a bus route or road should do that."