Why Is Canada Funding Jobs in China Instead of at Home?

B.C. Ferries' Controversial Deal with China Sparks Debate

B.C. Ferries CEO Nicolas Jimenez has announced significant savings on the purchase of four ferries from China, thanks to a $1 billion low-interest loan from the Canada Infrastructure Bank (CIB). The loan, with an interest rate of 1.8%, is expected to save the company $650 million in interest charges over the term of the agreement.

The Deal Breakdown

• $690 million for the vessels
• $310 million for electrification infrastructure

Jimenez highlighted the cost-effectiveness of the deal, noting that European bids would have cost $1.2 billion more. However, the decision to outsource shipbuilding to China has drawn criticism from federal and provincial officials.

Political Backlash

• Federal Infrastructure Minister Gregor Robertson has requested a briefing from the CIB CEO, questioning why a federal agency is funding jobs in China instead of supporting Canadian infrastructure projects.
• Transport Minister Chrystia Freeland expressed "great consternation and disappointment" over the deal, though her letter to B.C. Public Safety Minister Mike Farnworth made no mention of the CIB loan.
• Premier David Eby dismissed federal concerns, telling Freeland to "mind your own business."

B.C. Ferries' Independence Questioned

Despite claims of independence, B.C. Ferries' board includes several NDP-affiliated members, raising questions about the government's influence on the decision. CEO Jimenez confirmed that the province was kept in the loop throughout the procurement process.

What’s Next?

Jimenez insists it’s too late to reverse the deal without severe penalties. However, the federal and provincial governments could explore options to build a fifth, backup ship in Canada, incorporating as much domestic content as possible.

Key Takeaways:

• The CIB’s loan to B.C. Ferries is a rare instance of federal funds supporting foreign shipbuilding.
• The deal highlights tensions between cost-saving measures and domestic job creation.
• Political leaders are divided on whether to prioritize affordability or local industry support.