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Transportation Minister Rob Fleming says he knows last summer was frustrating for travellers and a challenge for BC Ferries due to staffing and mechanical issues.

The statement says the province has renewed its contract with the ferry service for another four-year term ending in March 2028, and the new agreement adds more than 1,400 round-trip sailings each year as "core services."

It says the sailings on 13 minor routes were previously designated as discretionary, and the change will improve service for smaller, ferry-dependent communities.

Fleming says the provision for penalties over missed core sailings is aimed at holding the company accountable for the services it is contracted to provide.

The province is also providing $500 million to help keep fares down, saying the Office of the BC Ferries Commissioner had confirmed annual increases of 3.2 per cent over the next four years. That funding had been announced last February.

Without the provincial funding, the Transportation Ministry says fare increases would have been approximately 9.2 per cent each year over the same time period.

"At a time of high interest rates, we made a prudent investment that allows BC Ferries to continue with its longer-term capital plans that will improve capacity and reliability, while keeping fare increases low," Fleming says.

The BC Ferries capital plan includes spending on new ships, more staff, and terminal and technology upgrades.

In her report on the fare increase decision, commissioner Eva Hage underscored the many demands facing the ferry service in the coming years.

The report released Tuesday points to ongoing labour supply issues, rising fuel prices and the escalating expenses associated with maintaining an ageing fleet.

She also expressed concerns over BC Ferries' steep projected increase in operating costs, which are forecast to be 40 per cent higher in 2025 than in 2022.

"While the government's additional $500 million has allowed us to cap fare increases in line with inflation for the next four years, we must remember that this is one-time funding," Hage says in a statement. "The cost to operate the ferry system is increasing and will continue to increase at a rate higher than inflation."

BC Ferries President Nicolas Jimenez issued a statement saying he understands those concerns and designing a ferry system for the future will require collaboration with all levels of government, communities, First Nations and other partners.

This report by ºÃÉ«tvwas first published Oct. 3, 2023.