Safe Restart Funding key to BC Ferries financial results so far in 2021

The Northern Adventure at Fairview last summer

BC Ferries released their third quarter results last week and the recurring theme from the overview of the Ferry systems performance so far in 2021 was the impact of the coronavirus on operations and how government funding vehicles have helped cushion much of the financial hit.

That as BC Ferries used a portion of the federal-provincial funding towards avoiding registering a net loss in the period ended December 31st, 2020.

The COVID-19 global pandemic continues to have a significant impact on the company’s operations and financial results. During the quarter, BC Ferries carried 2.9 million passengers and 1.6 million vehicles, a decrease of 39.6 per cent and 22.3 per cent, respectively, compared to the same period in the prior year. 

Year-to-date, the company carried 10.6 million passengers and 5.3 million vehicles, a decrease of 42.1 per cent and 26.9 per cent, respectively, compared to the same period in the prior year. 

As a regulated company, BC Ferries’ allowable average annual fare increases and corresponding earning targets are set by the BC Ferries Commissioner to cover the cost of ferry service, along with required maintenance and vessel, terminal and IT upgrades and replacements, as well as debt servicing. 

The effects of COVID-19 have negatively impacted BC Ferries’ traffic and revenues over the current year. This trend is expected to continue in the near term as the province recovers from the effects of the pandemic.

In December, after a bit of lobbying to the two levels of government, was included in the Federal-Provincial Safe Restart initiative, which saw 380 Million dollars provided to the Ferry Service.

They have applied some of that funding as follows:

BC Ferries applied nine months’ worth of Safe Restart funding, or $154.8 million, to third quarter revenues. Without this relief, the net loss for the three months ended December 31, 2020 would have been $56.4 million. 

As a result of the funding, BC Ferries recorded net earnings of $98.4 million for the three months ended December 31, 2020, compared to a net loss of $8.3 million in the same quarter in the prior year. 

On a year-to-date basis, BC Ferries’ net earnings were $74.3 million to December 31, 2020. Without federal-provincial Safe Restart funding, the company would have had a net loss of $80.5 million, compared to net earnings of $98.9 million in the same period in the prior year.

Mark Collins, BC Ferries President and CEO paid tribute to the work the Ferry Service's employees as they all navigated the choppy waters of COVID this past year.

“We would again like to acknowledge the important contribution from the federal and provincial governments to address the profound impact COVID-19 has had on transportation and on the ferry system. The Safe Restart funding will protect the long term sustainability of the ferry system to recover our losses and maintain service and future investments in ferry dependent communities.

Our valued employees continue to focus on our core business of delivering efficient service while protecting passengers who rely on us for essential travel. I can’t thank our staff enough for their dedication and their work to keep our ships and terminals safe, while keeping communities connected during this difficult time.”

Despite the uncertainty of the last year, BC Ferries has been able to keep to some of its capital investment plans in the last few months.

"Significant investments included the four Island Class vessels and one Salish Class vessel that were already under construction prior to the pandemic. 

Given the impact of COVID-19 on the company’s financial position, all capital plans are being reviewed to identify opportunities to defer any expenditures that are not regulatory, security or safety related, or operationally necessary."

You can review the full backgrounder on the Third Quarter Statement here.

For more notes related to BC Ferries see our archive page here.