The immediate predecessor to today’s BC Ferries was a provincial Crown corporation called British Columbia Ferry Corporation. Created in 1977 under a Ferry Corporation Act, it took over government ferry services previously run under the BC Department of Highways.
Ferry operations under the Crown corporation ended April 1, 2003. In the corporation’s final annual report, its chair reported that:
“…following a process that began the year prior, the provincial government and BC Ferries’ Board of Directors undertook a core review of the corporation in 2002/03. The process was initiated to examine every aspect of the Crown corporation in order to determine how best to remodel delivery of ferry services in the province of British Columbia.”
The company’s chair went on to describe the reasons for the change in status.
“In many respects, change for the corporation was inevitable. As a Crown corporation, BC Ferries was very much dependent upon government for everything from rate-setting to vessel construction and spending priorities. Capital investments were approved within the short-term rotation of government fiscal priorities rather than adhering to a long-term business model that is required for a service of this magnitude. In addition, each decision was directly influenced by the politics of the day.
“This problem, which has been well chronicled in independent reports about the ferry system, seriously inhibited the corporation’s ability to operate in a businesslike manner. With a major capital replacement program needed to upgrade or replace older vessels in the fleet and improve terminal infrastructure, a new model was required to access outside financing to make these necessary investments.
“The provincial government and BC Ferries’ Board of Directors examined a variety of potential solutions for the coastal ferry system. Every option was seriously considered: from retaining status quo for the taxpayer-supported Crown corporation model to outright privatization of the service. The option that was selected is the optimal solution. It is best described as a commercial model governed by an independent authority that meets the objective of creating a modern, safe and reliable ferry system that will provide improved service and greater customer choice while protecting British Columbia taxpayers from further financial risk and debt burden.”
On April 2, 2003, that Crown corporation was converted to an independent, regulated company under the Company Act, and renamed British Columbia Ferry Services Inc. This conversion was recognized in the new Coastal Ferry Act, which took effect April 1, 2003. The Ferry Corporation Act was simultaneously repealed.