Most of those on board were rescued after the government-operated Queen of the North hit a rock off Gil Island in Wright Sound.
The accident happened at around 12:43 am about 135 kilometres from Prince Rupert, British Columbia Ferries.
Most passengers and crew were safely evacuated in lifeboats, and were picked up by a passing fishing boat and coast guard vessels. A rescue helicopter and an aircraft were also dispatched.
But one local couple from 100 Mile House in western Canada was still unaccounted for officials said.
“But we’re not sure whether or not they were on the ferry,” said Captain Leah Buyrne of Canada’s Department of National Defence.
Karen Clifton, manager of the indigenous band at Hartley Bay, the remote village where most rescued passengers were taken, said all others were “accounted for and everybody is rescued.”
When the ship went down everyone woke up in the tiny fishing village, population 169, she said.
The men rushed out in fishing boats to help rescue passengers while others brought food, blankets and dry clothing to the town’s Feast Hall.
“The building was packed with women cooking, fixing coffee, getting blankets,” said Clifton.
Captain Buyrne said 11 passengers with minor inujuries were flown to Prince Rupert.
After spending the night in Hartley Bay all other passengers were taken by a coast guard ship to Prince Rupert.
The 125-metre ferry, which carries up to 700 people and 115 cars, was travelling south to Port Hardy from Prince Rupert on its usual Inside Passage route off the province’s northern coast.
Observers said the water was relatively calm and there was a breeze and light rain when the accident occurred. The ferry, built in 1969, sank below the surface within an hour of hitting the rock.
Emergency ships and aircraft were still scanning the site late on Wednesday.