Transport Minister Chrystia Freeland told MPs Friday she is "dismayed" by a $1 billion federal loan for BC Ferries' purchase of four new electric-diesel ships from a Chinese shipbuilder - but did not call for the contract's cancellation.
The House of Commons transport committee launched a study of the Canada Infrastructure Bank loan today.
BC Ferries announced in June that it had hired China Merchants Industry Weihai Shipyards to build the new ships after a five-year procurement process that did not include a Canadian bid.
The Canada Infrastructure Bank contributed $1 billion to the deal and said in June that the new ferries "wouldn't likely be purchased" without this financing.
In her opening remarks before the committee Friday, Freeland said she was troubled by the planned purchase and she believes in supporting Canadian jobs.
She said she has sent 71 letters directing all organizations under the Transport Canada umbrella to prioritize Canadian content in their major procurements where feasible, particularly Canadian steel, aluminum, and lumber.
When Canadian options aren't available, she said, the preferred option is to buy from countries with trade deals that include reciprocal procurement agreements.
Freeland also said Transport Canada will be convening a meeting with provinces and territories, ferry owners and operators, shipyards, labour representatives and the steel industry. She said she's also assembling a second meeting with major rail operators.
Freeland did not directly respond to questions from MPs about whether she would reject the loan. She said she agrees that this is a moment of crisis for the steel and aluminum sectors and they need the government's support.
Housing and Infrastructure Minister Gregor Robertson and the CEOs of BC Ferries and the Canada Infrastructure Bank are set to testify at the meeting later today.
The Canada Infrastructure Bank is accountable to Parliament through Robertson.
Jeff Groot, executive director of communications for BC Ferries, said the company signed the loan with the bank before the contract with the Chinese shipyard was finalized.
Dan Albas, Conservative transport critic and committee co-chair, requested the study and has asked questions about why $1 billion in public funds was earmarked to finance overseas shipbuilding in the middle of a trade war with the U.S.
Freeland sent her B.C. counterpart, Mike Farnworth, a letter in June saying she was disappointed that BC Ferries would choose a Chinese state-owned shipyard "in the current geopolitical context," and asking him to confirm that no federal funding would be diverted to purchase the ferries.
Before Friday's meeting began, Bloc MP Xavier Barsalou-Duval said he'd like to see an apology from the government and from the Canada Infrastructure Bank.
He said it's "unacceptable" and "problematic" that the government plans to invest in foreign infrastructure when Canada's steel industry is facing tariffs from the United States.
The new vessels are expected to join the BC Ferries fleet between 2029 and 2031.
Picture Courtesy: THE CANADIAN PRESS/Darryl Dyck
