A flotilla of fishing boats from an Indian village rescued 99 passengers and crew members after the Queen of the North hit Gil Island off Canada's Pacific coast and drifted for 77 minutes before sinking on March 22, 2006.
The ship was moving at 17 knots in reduced visibility when a course alteration should have been made, the report said. Fifteen minutes later, it struck Gil Island.
"While we do not know exactly what the crew was doing on the bridge minute by minute ... I can tell you they were not following sound watch-keeping practices," said Capt. Pierre Murray, a senior safety board marine investigator.
Fourth Officer Karl Lilgert and Quartermaster Karen Bricker had ended a relationship two weeks before the accident and were working their first shift alone together since the break-up, the report said.
The two were previously fired after an investigation by B.C. Ferries.
"I continue to grieve for the missing persons and would with all my heart exchange my life for theirs," Lilgert said in a statement.
Murray said navigating a narrow channel at night requires careful attention but the two allowed themselves to be distracted by their chatting. They also may have been distracted by a squall that had reduced visibility, he said.
"That night many basic principles of safe navigation were not followed," Murray said. "For instance, a dedicated certified lookout was not posted; a senior officer was not called and speed was not reduced in restricted visibility, and the vessel's position and ship setting were not monitored."
The children of the passengers killed in the accident, Shirley Rosette and Gerald Foisy, have filed a lawsuit as have some other passengers. A criminal investigation into the sinking also continues.