Transport committee will study B.C. Ferries receiving $1B loan for Chinese ships

The House of Commons transport committee agreed on Monday to launch a study into the $1-billion loan B.C. Ferries received from the Canada Infrastructure Bank to finance the purchase of four new electric-diesel ships from a Chinese shipbuilder.

B.C. Ferries announced last month that it had hired China Merchants Industry Weihai Shipyards to build four new ships after a five-year procurement process that did not include a Canadian bid.

Federal Transport Minister Chrystia Freeland sent her B.C. counterpart a letter on June 20 saying she is "dismayed" by the deal and expects B.C. Ferries to mitigate potential security risks.

She also asked the B.C. government to confirm that no federal funding will be diverted to purchase the ferries.

The Canada Infrastructure Bank contributed $1 billion to the deal and said in a June 26 statement that the new ferries "wouldn't likely be purchased" without this financing.

The committee will call Freeland, Infrastructure Minister Gregor Robertson and the CEOs of B.C. Ferries and the Canada Infrastructure Bank to testify.

The hearings are to be scheduled within the next 30 days.

Dan Albas, Conservative transportation critic and committee co-chair, requested Monday's meeting. He said he wants to know why $1 billion in public funds has been earmarked to finance overseas shipbuilding in the middle of a trade war with the U.S., and as China charges tariffs on some Canadian agricultural products. 

"My focus is largely on getting answers so that people can know whether or not their government — remember the government that said 'elbows up, Canada strong, we can build it together' — is in fact actually financing the outsourcing of Canadian jobs," Albas said.

Will Greaves, Liberal MP for Victoria, said he was in favour of studying the decision, but encouraged committee members not to jump to conclusions and wait for testimony, adding that B.C. Ferries is a vital service for the province's coastal communities. 

"We need to hear this witness testimony.… We need to have the opportunity to reflect on the questions that have been raised, but I encourage my colleagues to stop using B.C. Ferries and B.C. coastal communities as a punching bag to make points that we have heard before."

The committee will debate next steps in its study once the testimony is complete. 

In a statement, B.C. Ferries CEO Nicolas Jimenez said it chose the most comprehensive bid that provides the best value, and the decision was made "in the absence of any Canadian bids."

The low-interest loan will save B.C. Ferries customers and the province's taxpayers up to $650 million, he added. 

"Without it, we would still be building these ferries, but would need to make up that difference through higher fares for customers or higher investment from upper levels of government."

The new vessels are expected to join the B.C. Ferries fleet between 2029 and 2031.