BC Ferries, a primary supplier of nautical transportation along the Western Canadian coast, has announced its purchase of four sizable passenger vessels from Chinese state-owned shipyard, China Merchants Industry Weihai Shipyards. It was reported that no Canadian businesses were able to compete for the contract, primarily due to their ongoing obligations to federal military contracts. This selection of a foreign provider has arisen amidst Canada’s ongoing trade tensions with China.
BC Ferries chose to not disclose the monetary sum of the shipbuilding contract, citing its necessity to safeguard its bargaining power in future endeavours. It is known that they plan to commission at least three additional vessels over the subsequent ten years. The magnitude of their financial commitment remains under wraps, which BC Ferries argue is in the best interest of future strategic negotiations.
Mike Farnworth, the Transportation Minister of British Columbia, expressed some measure of disappointment that the contract didn’t include local suppliers. However, he conceded that BC Ferries had made a rational business judgement. He strongly urged the organization to provide more transparency with regards to the costs associated with upgrading their aging fleet of sea vessels.
The ferry company, privatized two decades ago, is primarily overseen by the B.C. Ferry Authority, a single voting share entity held by the provincial administration. Farnworth implored BC Ferries to disclose the extent of their spending, regardless of their vendor selection decisions. He reiterated that the public held a valid interest in understanding the financial decisions of the regional service provider.
During the approval process of BC Ferries’ bid for five new vessels, officials acknowledged a hefty total price tag of over a billion dollars. The regulatory board granted approval for the construction of four vessels, aligning with BC Ferries’ approved fiscal plan. This update came from the company’s CEO, Nicolas Jimenez, revealing this week that the recently signed contract falls within their sanctioned budgeting limits.
CEO Nicolas Jimenez commented that the ongoing political and trade disputes between Canada and China played no significant role in the purchasing decision. His stated focus was attaining a solid deal for the provincial service. Furthermore, it was emphasized by BC Ferries that increasing ridership demand necessitated upgrades to their current marine fleet.
Over time, BC Ferries’ service provision has been strained due to population growth and resulting increased usage. This issue is affecting not only individual travelers but also vital commercial traffic that relies on these marine routes. Weihai Shipyards, selected for the shipbuilding contract, is an experienced builder of vessels for companies such as Canada’s Marine Atlantic ferry company, and France’s Brittany Ferries and Corsica Linea.
Speaking about potential import tariffs arising due to international trade tensions, Jimenez stated their irrelevance to the procurement of these vessels. Bruce Williams, CEO of the Greater Victoria Chamber of Commerce, expressed support for BC Ferries, acknowledging that they had undergone a thorough procurement procedure before finalizing a foreign supplier.
Despite the Chinese shipyard’s state-ownership, Farnworth asserted no national security issues were associated with the procurement of these vessels. His comments referenced recent commitments by Ottawa to engage in discussions to ease the current trade discord with China. Both British Columbia and Canada at large maintain a significant amount of international trade activity with China, marking it as a chief trading partner.
Expectations would normally see Premier David Eby involving China in a trade mission given its influential role in the province’s economy. However, his recent 10-day trip was noted to include Japan, South Korea, and Malaysia, while bypassing Asia’s strongest economy. Several concerns have been voiced regarding this decision by opposition parties and workers’ representatives in British Columbia.
The B.C. Conservatives have urged the Eby-led government to rescind the recently announced contract with Weihai Shipyards, accusing the Premier of neglecting Canadian workers. This view was echoed by the B.C. shipbuilder, Seaspan, who suggested that Canadian businesses were struggling to compete with countries having lower business operating standards.
Seaspan argued that fair competition was not possible with countries characterized by lower wage costs, lax employment criteria, and inferior environmental and safety regulations. They issued a press release that emphasised their continued commitment to the construction of ships for the Royal Canadian Navy and the Canadian Coast Guard, in their Vancouver shipyard.
The B.C. Federation of Labour, representing numerous union members in the province, voiced strong disapproval of the contract awarded to Weihai Shipyards. They dubbed the move a ‘colossal mistake’ and criticised BC Ferries for missing an opportunity to support local industry and workers.
In defense, BC Ferries referred to the global shipbuilding market dynamics, highlighting that 60% of major seagoing vessels are constructed in China, a testament to the country’s dominance in this sector. Offering further perspective to their decision process, they maintained that financial prudence and operational necessities superseded nationalistic tendencies in this case.
All in all, BC Ferries’ decision to purchase four large vessels from a Chinese shipyard marks a significant development in their business strategy. Despite local and international controversy stirred up by this decision, BC Ferries has confirmed their primary commitment to delivering top-tier ferry services and maintaining financial responsibility to the people of British Columbia.