Rustad calls for BC Ferries to scrap Chinese vessel contract
The ferry company has faced criticism from all sides since announcing this spring it would purchase its next four vessels from China Merchants Industry Weihai Shipyards (CMI Weihai) after a lengthy open bid process.
No Canadian shipyards bid on the project, and the ferry company says the Chinese bid came in at about $1.2 billion cheaper than European competitors.
BC Conservative Leader John Rustad said Tuesday that in the wake of China's latest tariffs on Canada, the deal should be scrapped. China announced a 75.8 per cent tariff on Canadian canola products this week, expected to deliver a $5 billion hit to the industry.
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Rustad said the Chinese move follows similar aggressive trade actions targeting Canadian seafood and wood pulp.
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'I think we should break this contract. I think that we need to send a message. We want to be able to have a good trade relationship with China. We want be able make sure that we have the ability to do things, but you don't reward a country that is quite frankly attacking other sectors of our economy,' Rustad said.
'I think there probably would be a penalty and quite frankly I think the board of BC Ferries should be fired for incompetence for actually putting us in this position in the first place.'
Rustad further accused the NDP government of 'incompetence' for failing to work with local shipbuilders years ago to ensure they had the capacity to handle upcoming BC Ferries orders, and said if they were already fully committed to other projects the ferry company should have gone with 'some of our allies' like Germany or Poland.
B.C. Premier Davide Eby has previously said that he would not override the deal, telling reporters it would cost billions to overturn and delay the procurement of badly-needed vessels.
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In a statement, NDP Saanich South MLA Lana Popham said acquiring the new vessels was urgent.
'People need the new ships, quickly, so they can get where they need to go and aren't left sitting at the terminal parking lot. We are working to ensure future ships for BC Ferries are built here in Canada.
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BC Ferries has said that cost was a key driver in its new ferry procurement process, and that any additional cost of more expensive vessels would be passed on to passengers.
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BC Ferries currently charges $95 for a car and driver plus $15 per passenger one-way on its major southern routes, and has warned that it could be forced to further hike fares by 30 per cent by 2028.
Earlier this month, CEO Nicolas Jimenez told the House of Common Transport Committee that while two Canadian shipyards pre-qualified for the process, neither submitted a bid.
BC Ferries received six compliant proposals, all from foreign shipyards, and chose the bid with the best overall value, including delivery timeline, technical performance, lifecycle cost, and service-level commitments, he testified.
'This was a choice between a foreign bid or no new ferries,' he told MPs.
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Domestic shipyards, however, have argued that the bid process essentially excluded them by focusing on cost alone and that they were unable to compete due to pricier local labour.
UBC Sauder School of Business economics professor Werner Antweiler said that while there have been many calls for BC Ferries to drop the contract, it would only make sense if there was a realistic alternative.
He noted that local shipbuilder Seaspan is already fully booked with contracts for the military and Coast Guard, and that waiting is likely not an option for BC Ferries.
'If you want to receive ships that are affordable and available soon, there seems to be very little other options than going ahead with the contract that has been signed with China CMI,' he said.
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'So I'm not quite sure when people say well, we should build them domestically, what exactly they are proposing who is going to build and when.'
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He added that cancelling the deal would do little harm to China's larger economy, while risking further increasing trade tensions.
BC Ferries is technically an independent company with its own board and executives, though its sole shareholder is the BC government.
Antweiler added that given its arms-length status, it would be improper for the provincial government to step in and override decision making.
'It means like really renationalizing BC Ferries and bringing it back under provincial control and making it a Crown corporation,' he said.
'If that is what is being proposed then Mr. Rustad should be clear about if that is where he wants to go.'
1:48
Federal transportation minister calls out province on BC Ferries' contract with China
Rustad is not alone in his criticism of the deal.
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Trades in the province and the union representing BC Ferries workers have both spoken out against it.
B.C. Transportation Minister Mike Farnworth said he was 'disappointed' more Canadian shipyards weren't involved, while federal Transport Minister Chrystia Freeland said she was 'dismayed' at the choice and Conservative Leader Pierre Poilievre said Canadian tax dollars should not be subsidizing jobs overseas.
MPs have launched a probe at the federal transportation committee of a $1 billion loan to BC Ferries from Canada Infrastructure Bank.
BC Ferries is not the first Canadian ferry service to receive a ferry from CMI Weihai.
Marine Atlantic Ferries, a federal Crown corporation that services Newfoundland, recently took a delivery of a new vessel from the same shipyard.
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