Conservatives Urge Ottawa to Cancel $1 Billion BC Ferries Loan for Chinese Shipyard Deal
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The Conservatives are calling on Ottawa to cancel a $1 billion loan the federal infrastructure bank is providing to BC Ferries for the purchase of four new vessels from a Chinese state-owned shipyard, saying the ships should be built in Canada to support domestic industries amid U.S. tariffs.
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Conservative Leader Pierre Poilievre announced his party’s request to the Liberal government on July 9, saying the funding for the BC Ferries deal with a Chinese shipbuilder will “outsource Canadian steel, aluminum and shipbuilding jobs to a foreign, state-owned enterprise.” The Canada Infrastructure Bank (CIB) announced the $1 billion loan to BC Ferries late last month, arguing that without its financing, the cost of the new vessels would fall to the ferry operator’s customers.
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“Unjust and illegal American tariffs are attacking Canada’s steel and shipbuilding workers and Liberals are only making it worse by sending billions to China while it also punishes our farmers and food producers with crippling tariffs,” Poilievre said in a July 9 social media post, referring to tariffs Beijing has imposed on Canadian agricultural and food products. “Cancel the loan. Bring the jobs back to BC and Canada.”
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The parliamentary Transport Committee voted earlier this week to approve a Conservative motion to launch a review of the federal loan. The study will hear testimonies from Housing and Infrastructure Minister Gregor Robertson, Transport and Internal Trade Minister Chrystia Freeland, CIB CEO Ehren Cory, and BC Ferries CEO Nicolas Jimenez.
“I find it outrageous that the Crown corporation known as the Canadian Infrastructure Bank is actively financing the outsourcing of Canadian jobs,” Conservative MP and transportation critic Dan Albas, who introduced the motion, told the Transport Committee on July 7.
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“This is wrong. We need to have some answers to the government’s true position on this, because we have conflicting reports that have played out over the media.”
BC Ferries announced last month it had hired state-owned China Merchants Industry Weihai Shipyards to build four vessels, following a “rigorous global procurement process” that evaluated proponents on bid strength, technical capabilities, safety and quality standards, experience, costs, and delivery timelines.
No Canadian firm bid for the contract, with B.C. shipyard Seaspan saying that BC Ferries’ focus on affordable proposals made it difficult to compete with countries that have lower industry standards.
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“Canadian shipyards and their supply chains cannot compete with low wage countries that have lower employment standards, lower environmental standards and lower safety standards than Canada and BC,” Seaspan said in a Sept. 26, 2024, statement, following BC Ferries’ release of its criteria for the procurement process.
BC Ferries president Nicolas Jimenez has said financing tools like the CIB loan allow the ferry operator to invest in new vessels amid financial strains.
“Even after multiple consecutive years of record-setting demand, BC Ferries is facing serious financial pressures as our costs outpace revenue and our infrastructure ages,” Jimenez previously told The Epoch Times.
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Federal Transport Minister Freeland has criticized BC Ferries’ decision to award the contract to the Chinese shipyard, pointing to tariff tensions with Beijing, national security risks, and the need to prioritize Canadian firms.
She asked her British Columbia counterpart Mike Farnworth in a June 16 letter to “verify and confirm with utmost certainty that no federal funding will be diverted to support the acquisition of these new ferries.” She cited a past CIB loan to BC Ferries but made no reference to any future funding.
The latest $1 billion-loan to BC Ferries was approved by the CIB’s board in early March, according to the bank.
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B.C. Premier David Eby has said the selection of the Chinese shipyard is not his preferred outcome, but that he will not ask BC Ferries to reopen the procurement process given the urgent need for new vessels and the costs and time involved. He has said his government will work to ensure the next round of ferries are built in Canada.
Eby has also pointed to what he describes as an “unequal” ferry system, arguing that users in Atlantic Canada are “heavily subsidized” by Ottawa compared to BC Ferries users.
The office of the minister of housing and infrastructure, which oversees the CIB, has not responded to a request for comment.
In her June 16 letter, Freeland also urged Farnworth to outline steps BC Ferries would take to mitigate security risks, given the “ongoing concerns regarding threats to security, including cybersecurity, from China.”
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The Conservatives have also raised concerns over the security threats involved, saying that while Carney has called China the “biggest security threat to Canada,” the funding provided by the federal bank will be directed to a company controlled by the Chinese Communist Party.
These concerns have been echoed by the B.C. Conservatives, with transportation critic MLA Harman Bhangu saying that building the new vessels in China poses a national security threat.
“What happens when these vessels are operational? What kind of data will they quietly be collecting? Passenger movement, travel patterns, operational systems? We’ve seen how embedded technology can be exploited,” he wrote in a July 6 social media post.
The parent company of the Chinese shipyard hired by BC Ferries, the China Merchants Group Limited, describes itself as a “key state-owned enterprise directly administered by the central government.”
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That company has faced international scrutiny due to its alleged use of debt-trap diplomacy through China’s Belt and Road Initiative, as well as for global activities seen as advancing Beijing’s strategic interests, including support for the naval expansion of the People’s Liberation Army.
A 2024 U.S. government report on Beijing’s strategic investments in the U.S. maritime industry raised concerns over the use of equipment and technology originating from China, citing a case in which port cranes bound for the United States were found to contain “unauthorized cellular modems” used to collect data on certain equipment.
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