Traffic carried by British Columbia Ferry Services Inc. is continuing to drop, according to third quarter financial results released today.

The publicly owned ferry company carried three percent fewer passengers in the third quarter of 2011-2012 than it did in the same period last year. Vehicle traffic was down 3.6 percent.

"The traffic decline has been relatively consistent throughout all three quarters of fiscal 2012 and is the largest year-over-year traffic decline that BC Ferries has experienced in recent years," a BC Ferries news release said.

Traffic has been dropping in recent years amid concerns about rising fares. Transportation Minister Blair Lekstrom is reviewing a report by Ferry Commissioner Gord Macatee that found high fares are causing hardship for coastal residents and communities and the government could provide more funding so that fares could be kept to the level of inflation.

The Feb. 21 provincial budget, however, included no increase to the $170 million subsidy and Finance Minister Kevin Falcon called that contribution "generous".

BC Ferries lost $23.1 million in the three months that ended Dec. 31, 2011. While ferry business is seasonal with more people traveling during the summer, the quarterly loss was slightly larger than in the same period a year ago when the company was able to improve its bottom line by selling its former head office for $9.3 million. It now leases space in a downtown Victoria building.

The company's revenue declined by a million dollars in the quarter while expenses went up by $800,000 compared to a year ago.

The release notes that the company has reached a tentative agreement, which the BC Ferry & Marine Workers’ Union membership has ratified, to extend its current collective agreement for three years until Oct. 31, 2015.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Find him on Twitter or reach him here.