Thank you, Mr. Chair, and thank you to the members of the committee. It's nice to meet you and it's nice to be here.
I am pleased to be able to speak about how BC Ferries is delivering safe, reliable and affordable service to British Columbians and our customers. For the last 60 years, BC Ferries has been an essential public service for British Columbians. Last year alone, we transported almost 23 million customers. That was our third record-setting year in a row. We're a private company that operates provincially under independent regulatory oversight, with a legislated mandate to serve the public interest. We're a foundational part of the provincial and national supply chain, a critical part of the tourism industry in our province, and B.C.'s marine highway, moving about $8 billion in goods annually.
Our customers and communities need safe, reliable and affordable service. My role as CEO is to deliver on that promise. Today our system is at capacity. Last summer our major route sailings ran at an average of 92% capacity. We left a quarter of a million people behind because we were full. Only one of our 25 routes can actually cover its own costs. Travel demand is projected to rise by about 15%, outpacing our capacity even with four new vessels. Much of our capital infrastructure is old. Many of our ferries are well past their vessel design lifespan. More than half of our terminals need significant investment to keep operating safely.
In 2024 the propellor fell off our 61-year-old Queen of New Westminster, resulting in almost 200 days of repair, countless travel disruptions and a cost to BC Ferries of about $15 million. We expect that our operating losses will continue to grow with inflation. Simply to maintain today's level of service, we also expect that British Columbians could see their fares increase dramatically. We don't have the luxury, the flexibility or even the mandate to overspend.
To replace our four oldest ships, we conducted an open and competitive procurement process independent of political interference and aligned with international best practice. In fact, we adjusted the qualifications specifically to enable Canadian shipyards to qualify. Despite two Canadian shipyards then being pre-qualified, neither chose to formally submit a proposal. Of the six compliant bids that we did receive, all were from foreign countries. We chose the proposal that offered the best combination of value, quality, delivery timelines and protections for our customers. Throughout the build, we will have a team of Canadian experts on site, in China, to ensure high standards of quality and security.
I will say that Canadian companies have made the same decision, building almost 100 ships in China over the last decade. That includes the newest vessel for Marine Atlantic, a federal Crown corporation. It came from the same shipyard where we will build our vessels.
To summarize, there were no Canadian bids. This was a choice between a foreign bid or no new ferries. Going with another foreign proposal would have cost up to an extra $1.2 billion, resulting in significant and unnecessary increases to passenger fares. Even if there had been a Canadian bid, it too would have cost more, and those ships would have taken up to a decade longer to build, during which time our customers would pay the high price, with increasing breakdowns of our older vessels. Finally, financing this project privately would have cost up to $650 million more in interest charges—yet another unaffordable fare increase that our customers would have to bear.
None of these would be acceptable outcomes for our company or for our customers, more importantly. Whether you live on Vancouver Island—in Powell River, Nanaimo or Langford—or in the Lower Mainland—in Maple Ridge, Abbotsford or Langley—or, frankly, anywhere else in British Columbia where taxpayers help support our marine highway, the cost of living is a major consideration. Our mandate is to provide a service that is as affordable and reliable as possible.
Regarding the Canada Infrastructure Bank, this current loan includes up to $690 million for vessels and another $310 million for electrification of our terminals to deliver cleaner and more climate-friendly travel in the future. To be clear, this is a loan that's received by BC Ferries, not China, and that will be repaid, with interest, by BC Ferries.
British Columbians desperately need safe, affordable, reliable new ships to keep them and our economy moving. Our decisions have saved our customers and British Columbians from unaffordable and unnecessary fare increases. I'm proud that we were able to deliver for them.
Thank you.