The B.C. Ferry Commissioner has set the preliminary cap on ferry fares at 1.9 per cent a year, beginning in 2016.

The caps, if confirmed, will remain in place until March 31, 2020.

The caps represent the maximum allowable increase in average fares.

"It's an average that we track," commissioner Gord Macatee said today. "The company has freedom to adjust fares up and down as long as it comes out there."

Macatee based his decision on B.C. Ferries' capital plan, cost projections, financial results and an efficiency plan.

He said the public can comment on the prelimary caps until June 30. He has to make a final decision by Sept. 30.

Macatee called on B.C. Ferries to make further "productivity improvements" of $27.6 million.

"It's up to the company to decide what they're going to be," he said. "We do not expect them to be around service levels, so we would expect they would have to be looking at more internal opportunities."

He credited the government and B.C. Ferries with creating a more efficient, affordable and sustainable service in order to permit fare caps below the rate of inflation.

He noted that the quasi-private firm is on pace to exceed its current efficiency taget of $54 million. It has cut overtime, trimmed administrative costs by $5 million since 2009, and reduced executive pay by $1.2 million a year, he said. Capital projects are also getting done on time and on budget.

B.C. Ferries president Mike Corrigan said the price caps establish rate stability for ferry users.

"In an environment with a $3-billion capital program required, coupled with significant costs to deliver safe and reliable ferry service, being able to keep fares at or below the rate of inflation is a major accomplishment," he said in a news release.

Previous price caps were set at 4.1 per cent in 2013, four per cent in 2014, and 3.9 per cent in 2015.

lkines@timescolonist.com

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