The Canada Infrastructure Bank (CIB) has recently made its second investment in modernising BC Ferries’ fleet and terminal renewals.
This cash injection was aimed at reducing service disruptions, due to mechanical issues, enabling vessel electrification and increasing overall fleet capacity.
By providing financing at a lower cost than traditional market rates, the CIB’s investment will also help reduce pressure on future fare increases, the bank claimed.
The CIB’s initial $75 mill investment in four hybrid battery-electric ‘Island’ class ferries and the related shore-side charging infrastructure is on track for completion by 2027.
These new vessels are part of BC Ferries’ ongoing efforts to replace its existing fleet over time with quieter and more environmentally friendly vessels. They will be capable of operating exclusively on battery-electric power, once shore-side charging is installed and the new propulsion systems are expected to further reduce underwater radiated noise for marine life.
To help address aging vessels for some of the busiest lower mainland and southern Vancouver Island routes, the CIB has committed to providing an additional loan of up to $1 bill towards the purchase of higher-capacity hybrid New Major Vessels and the related future terminal upgrades.
This loan is allocated in two tranches, up to $690 mill towards vessels and up to $310 mill towards electrification infrastructure.
The CIB’s loan will help replace vessels that are between 48 and 61 years old and help to reduce pressure on fares associated with any capital upgrades.
The vessels’ design includes engines capable of using biodiesel and battery-hybrid propulsion initially, allowing for conversion to full battery-electric operation in the future, a step that is expected to significantly reduce environmental emissions from operations.
BC Ferries is currently planning for the four new higher-capacity hybrid ferries to deliver quieter and more efficient operations on the major routes between Vancouver and Victoria (BC), as well as Vancouver and Nanaimo.
They will be capable of accommodating 2,100 passenger and 360 vehicles, up from the current average capacity of 1,200-1,500 passengers (+52%) and 250-310 vehicles (+24%).
Without CIB financing, the costs of the new ferries and electrification infrastructure would need to be borne more fully by BC Ferries’ customers and every year of delayed purchase risks more service disruptions, reduced travel options and fewer employment gains.
It is estimated the four vessels alone will result in more than a $1 bill invested by BC Ferries in the local maritime sector for all the repair and refits required over their lifespans.
A preliminary independent economic analysis also estimates that the employment impact of BC Ferries’ New Major Vessels will be equivalent to more than 360 new jobs annually in BC, including direct, indirect, and induced impacts, generating $27 mill annually in wages with an associated GDP impact of $48 mill.
The new vessels are also expected to facilitate an estimated $660 mill in incremental commercial goods movement each year between BC’s lower mainland and Vancouver Island.
In fiscal 2025, BC Ferries carried its highest volume of traffic, with 22.7 mill passengers and 9.7 mill vehicles travelling across more than 90,500 round trips.
Ehren Cory, CIB CEO, said: “This investment is about more than replacing aging vessels – it’s about ensuring that our coastal ferry system will have the capacity to meet the needs of the people, goods, and communities that depend on it.
“We believe that this partnership with the CIB will make a big impact in avoiding additional pressures on fare increases for our customers compared with borrowing from private markets.
“If we leverage the full loan amount, over the term, we expect to save about $650 mill in debt interest charges. It’s a smart, long-term partnership that advances our operational, environmental, and financial goals” Nicolas Jimenez, President and CEO, BC Ferries added.
