BC Ferries says passenger levels are dropping to 20-year lows and the corporation is predicting it will lose more than expected this year.

The number of people riding the ferries is down 3.7 per cent from 2010, and the number of vehicles has fallen 4.2 per cent from the previous year – the lowest level in 11 years -- ferry officials have confirmed.

The 2010-11 annual report issued in March forecast that the ferry company would lose about $20 million at the end of the current fiscal year.

But CEO David Hahn says recent the drop in passengers has been greater than expected and further losses are expected and he's undertaking a comprehensive review to cut operating and capital expenses.

Hahn says there are a few simple explanations for the drop in passengers and vehicle traffic.

"I think there's two elements. There's the price of fuel which directly impacts everybody's discretionary income. And I think when you look at the strength of the loonie, it impacts everything in Canada, not just B.C." he said.

Hahn also says fewer Americans and Europeans are traveling in Canada and Canadians are heading south where their money goes further.

NDP blames rising fares

But NDP ferries critic Gary Coons calls that a weak explanation that misses the key point.

"Fares are killing it. BC Ferries and David Hahn blame high fuel prices, the high dollar, the weather. But what's to blame are the high fares," he said.

In the past 20 years fares on the major routes for a car and driver have shot up from $29 to $75, while shorter routes have seen even more dramatic increases. Hahn has also become a lightning rod for criticism  because of his million-dollar salary package.

Coons also says BC Ferries should be returned to Crown corporation status, because it it's part of the provincial transportation network, and should be paid for by everyone in the province, not just ferry users.

In 2003 the B.C. government turned the former Crown corporation into a private company that is owned entirely by the provincial government.