BC FERRIES GRANTED $119.4 MILLION DUTY REMISSION

FUNDS TO BE DIRECTED TO FARE REDUCTION ON ALL ROUTES

VANCOUVER, Oct. 1 /CNW/ - BC Ferries President and CEO David L. Hahn announced today that the Government of Canada has granted BC Ferries request for duty remission on four vessels it has built offshore.

The $119.4 million in import taxes will be returned to the BC Ferries and the funds will go towards an across the board ferry fare reduction of about two per cent. The rate reduction will take effect on Monday October 18, 2010.

"Our customers will significantly benefit from this announcement and it clearly reflects an understanding by Prime Minister Harper and the Government of Canada of the importance of our west coast ferry transportation system to B.C.'s economy. The announcement also represents a substantial commitment by Premier Campbell and the provincial government to lower fares on the minor, northern and Sunshine Coast routes. This is certainly a win-win for all concerned." said Mr. Hahn.

In addition to a commitment to lowering fares, BC Ferries is also allocating $20 million to upgrade key assets in the ship repair and maintenance business in British Columbia. The details of this initiative still need to be finalized.

"Without the support of Federal Ministers' Stockwell Day and Jim Flaherty this could not have been accomplished. I also wish to thank Premier Campbell and Transportation Minister Shirley Bond for their decision to apply the provincial portion of the savings to lower fares on the minor, northern and Sunshine Coast routes," said Mr. Hahn.

BC Ferry fares are regulated by the BC Ferry Commissioner and this announcement today will be taken into consideration when setting future price caps from April 1, 2012 forward. While it is the purview of the Commissioner to decide how this should best benefit ferry users into the future, it is expected that the future benefit will continue to be in the neighbourhood of a 2% savings over what fares would have otherwise been.

As a result of this decision, BC Ferries' four major vessels were delivered $150 million under budget.

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For further information: British Columbia Ferry Services Inc., 1112 Fort Street, Victoria, BC, V8V 4V2, Tel [phone], Fax [phone], www.bcferries.com/news/, Note to newsrooms: For urgent media inquiries off-hours, call our emergency pager at [phone].