02. Committee Meeting Note

Committee Meeting Note

Topic: BC Ferries Shipbuilding Contract with Chinese Shipyard

Committee: Standing Committee on Transport, Infrastructure and Communities

Date and Time: August 1, 2025 (full meeting will run from 12 p.m. to 4 p.m., with the Minister of Transport and officials appearing between 12:00 p.m. to 1:00 p.m.)

Location: Room 225-A, West Block, 3938 Wellington St, Ottawa, ON K1A 0A4

Appearing:

• Hon. Chrystia Freeland, Minister of Transport and Internal Trade
• Arun Thangaraj, Deputy Minister
• Stephanie Hébert, ADM, Programs

Current study

On June 30, 2025, Conservative and Bloc Québécois members of the Standing Committee on Transport, Infrastructure and Communities (TRAN) sent a letter to the Chair of the Committee requesting a meeting (pursuant to Standing Order 106(4)) to discuss reports that BC Ferries had signed a contract with a Chinese shipyard for the building of four new vessels, and that the Canada Infrastructure Bank (CIB) had provided $1 billion in low-interest loans for this procurement. The letter called for TRAN to be convened immediately and for the Minister of Transport and Internal Trade, the Minister of Housing and Infrastructure, the CEO of the Canada Infrastructure Bank, and the CEO of BC Ferries to be called to as witnesses. The Committee met on July 7, 2025, and adopted a motion (below) to initiate a study on the matter. 

Motion

The motion to initiate this study was adopted unanimously by the Committee on July 7, 2025. The motion was moved by Conservative Party of Canada (CPC) Member of Parliament (MP) Dan Albas and adopted by the Committee with an amendment proposed by Bloc Québécois (BQ) MP Xavier Barsalou-Duval. The text of the adopted motion, as amended is:

That, pursuant to Standing Order 108, the committee urgently undertake a study of the Canada Infrastructure Bank decision to provide $1 billion in low-interest financing to BC Ferries for the purchase of new vessels from a Chinese state-owned shipyard;

the committee hold one meeting to receive testimony from the following witnesses for an hour each, separately, and that this meeting be convened as efficiently as possible within 30 days following the adoption of this motion:  

1. The Minister of Housing and Infrastructure;
2. The Minister of Transport and Internal Trade;
3. The CEO of the Canada Infrastructure Bank;
4. The CEO of BC Ferries;

And immediately after the conclusion of the testimony, that the committee devote one hour of work to determine the follow-up it intends to give to this meeting and that the questions raised be put to a vote before the meeting is adjourned.

Rounds of questioning at committee

• Five minutes are allotted for opening remarks.  
• Questioning of witnesses:
• First round: six minutes for the first questioner of each party as follows: Conservative Party of Canada (CPC), Liberal Party of Canada (LPC), Bloc Québécois (BQ).
• For the second, and subsequent rounds, the order and time for questioning is as follows:
• CPC, five minutes
• LPC, five minutes
• BQ, two and a half (2.5) minutes
• CPC, five minutes
• LPC, five minutes
• The total time allocated per round of questioning includes the member’s questions and the witness’ responses. There is no time limit on responses from witnesses; however, succinct answers are preferred.

About TRAN 

The Committee may study any aspect of the management and operations of Transport Canada and Infrastructure Canada, as well as any legislation, programs or policy areas administered by the Minister of Transport and Internal Trade and the Minister of Housing and Infrastructure. Recent studies have focused on issues such as accessible transportation, high frequency rail, and competition between airlines in Canada. At the start of the 45th Parliament, the Committee began by studying Bill C-5, the One Canadian Economy Act, prior to it receiving royal assent on June 26, 2025.

The scope of issues related to transport, infrastructure and communities is quite broad and includes: 

• federal programs and policies for air, rail, road and marine transportation; 
• federal infrastructure funding such as the New Building Canada Fund, and the Gateways and Border Crossing Fund; 
• Crown corporations (e.g., VIA Rail Canada Inc., pilotage authorities and the Jacques Cartier and Champlain Bridges Incorporated), administrative tribunals and agencies (i.e., Transportation Appeal Tribunal and the Canadian Transportation Agency), and shared governance organizations (e.g., port and airport authorities) within the Transport and Infrastructure ministers’ portfolios; and 
• a range of issues affecting productivity and quality of life in Canadian cities and communities (e.g., traffic congestion and community infrastructure). 

Parliamentary Analysis – House of Commons

Study: The CIB’s decision to provide $1 billion in low-interest financing to BC Ferries for the purchase of new vessels from a Chinese state-owned shipyard.

Members of Parliament have expressed significant concern about this issue since BC Ferries’ announcement of the contract on June 10, 2025. CPC MPs from British Columbia such as Dan Albas (Okanagan Lake West—South Kelowna), Jeff Kibble (Cowichan—Malahat—Langford) and Tamara Kronis (Nanaimo—Ladysmith) have been amongst the most vocal critics. In a statement defending the contract, BC Ferries Executive Director of Communications Jeff Groot said the decision came down to “a rigorous, transparent procurement process,” adding that it was “based on technical strength, safety and quality standards, experience with Transport Canada requirements, ability to deliver on time, and overall value for customers.” He further referenced that around 100 vessels had been built by CMI Weihai Shipyard and later acquired by Canadian entities, including one in 2024 by Marine Atlantic.

Early criticism from opposition parties focused on the Government of Canada’s yearly subsidy to BC Ferries, calling for stricter parameters on the use of federal funding. However, since the CIB announcement of a $1 billion loan to BC Ferries for the purchase of these new vessels, criticism from various opposition MPs has shifted to the CIB – including that the CIB and federal Government are betraying Canadian workers and industry in a time of economic crisis.

During the study, questions are likely to center around the operations and transparency of the CIB, which has been a frequent pressure point amongst many MPs (during the last two Parliaments), especially from within the CPC. At the TRAN meeting on July 7, 2025, CPC MP Leslyn Lewis spoke to the effects of U.S. tariffs on Canadian industry and criticized the Minister of Transport for “hiding” this $1 billion CIB investment in her letter to B.C.’s Transportation Minister Mike Farnsworth. She questioned the outsourcing of Canadian jobs and pointed to the low 1.8% interest rate on the loan from the CIB.

Other questions may touch on:

• the parameters attached to direct federal funding;
• the decision not to abolish the CIB following a report presented by TRAN in the 44th Parliament;
• further threats posed by U.S. tariffs and negotiations with President Trump;
• a perceived disparity in federal support of marine transportation in Quebec when compared to British Columbia;
• the need for a federal budget, and
• the extent to which federal Minister’s communicate with their provincial counterparts.

Finally, MPs from Quebec and Atlantic Canada have been generally critical of the Government of Canada’s management of ferries, especially since the COVID-19 pandemic, and could raise issues about the domestic industry for ferry construction and the need of more government support.

Previous TRAN reports:

Since the 44th Parliament, TRAN has adopted several reports relating to the Canada Infrastructure Bank.

• Report 2: The Erie Lake Connector: A Project in the Best Interest of the Public? (45th Parliament)
• Report 4: The Role of McKinsey & Company in the Creation and the Beginnings of the Canada Infrastructure Bank (45th Parliament)
• Report 3: The Canada Infrastructure Bank (44th Parliament)

Upcoming TRAN Business:

No motions have been adopted by the Committee regarding its planned agenda for studies in the Fall 2025; however, the Committee had several planned studies prior to the prorogation of the 44th Parliament which may be brought back, including:

• The role of the transportation sector on the tourism industry in Canada;
• Safety concerns related to the operation of small towing vessels on Canada’s west coast; and
• The Canada Infrastructure Bank.

At its meeting on June 16, 2025 the committee ordered the re-tabling of four reports from the 44th Parliament and requested Government Responses for all four.

• Report 2: The Erie Lake Connector: A Project in the Best Interest of the Public?
• Report 3: Towards Accessible Air Transportation in Canada
• Report 4: The Role of McKinsey & Company in the Creation and the Beginnings of the Canada Infrastructure Bank
• Report 5: Issues and Opportunities: High-Frequency Rail in the Toronto to Quebec City Corridor

Parliamentary scan

Question Period

June 11, 2025 – Jeff Kibble (Cowichan-Malahat-Langford, CPC)

Question:  Mr. Speaker, BC Ferries just announced that it will purchase four new full-sized ferries from a Chinese state-owned company rather than from a proven Canadian shipbuilder, such as Seaspan in North Vancouver. The Liberals are set to hand over $30 million to BC Ferries, while BC Ferries hands over critical jobs and investment in industry to China. Will the Liberals attach a common-sense condition of buying Canadian-built ships to BC Ferries in order to receive its $30-million subsidy?

Response: Mr. Speaker, I absolutely share the member opposite's concern when it comes to government procurement at all levels. Now is a time when we need to support Canadian workers and Canadian industries, and we need to work closely with our allies and trade partners. That project was not a federal government project. 
June 12, 2025 – Dan Albas (Okanagan Lake West-South Kelowna, CPC)

Question: Mr. Speaker, despite having world-class shipbuilders such as Seaspan in Vancouver, BC Ferries has chosen a Chinese state-owned enterprise to build four new ships, even though the Prime Minister has declared China the biggest security threat to Canada. Meanwhile, the Liberals are providing BC Ferries with $36 million, with no conditions to protect Canadian workers.

Will the minister grow a spine of Canadian-manufactured steel and make Canadian jobs a requirement for this funding, or will she side with Premier Eby in selling out our ship- and steel-building industries?

Response: Mr. Speaker, our government will always side with Canadian workers, particularly in our steel and aluminum sectors, which are being battered right now. I was disappointed and concerned when I learned of this procurement, particularly at this moment, when Canadian workers need our support. BC Ferries is entirely under provincial jurisdiction. The support BC Ferries receives from Transport Canada is entirely for operations, and there is no capital expenditure.

June 12, 2025 – Jeff Kibble (Cowichan-Malahat-Langford, CPC)

Question: Yesterday the Minister of Transport refused to act on my concern over BC Ferries' buying four ships from a Chinese state-owned shipyard. She used the excuse that it was not a federal project, which was not the question that I asked. The Liberals should be supporting Canadian shipyards and our economy instead of supporting CCP-owned shipyards and their economy. Again, I ask this: Will the Liberals attach the obvious condition of buying Canadian-built ships in order for BC Ferries to get their over $30-million Liberal subsidy?

Response: Mr. Speaker, I absolutely agree that we need to be supporting Canadian shipbuilders. That is why we have a national shipbuilding strategy. I absolutely agree that we need to be supporting Canadian steel and aluminum workers, and further, I agree that we need to be alive to national security challenges and bear those in mind when it comes to procurement. I have spoken to my B.C. counterpart about this issue, and I would underscore that BC Ferries is entirely under provincial jurisdiction. I do not think any B.C. MPs would challenge federal support for operations of ferries.

June 18, 2025 – Dan Albas (Okanagan Lake West-South Kelowna, CPC)

Question: Mr. Speaker, David Eby, the Premier of British Columbia, has doubled down and made the plan for BC Ferries to purchase four new vessels from a Chinese state-owned enterprise his own. The Minister of Transport has said she will give BC Ferries $36 million this year. Will the minister commit today that she will personally guarantee that not one cent of this transfer will go to the Chinese shipyard? Will she stand up against David Eby's moral failure, support Canadian jobs in steel and shipbuilding and make this transfer conditional on BC Ferries supporting jobs here in this great country?

Response: Mr. Speaker, I share the concern and anger of other members of this House about the purchase of Chinese ferries. I have written to the Province of B.C. to make clear that the federal government's support for BC Ferries, which is explicitly for operating support, must not be used for anything other than the operation of ferries. We owe it to the people of B.C. to support the operation of their ferries. We also owe it to the people of Canada to support Canadian shipbuilding, Canadian steel and Canadian—

Question: Mr. Speaker, she is just going to write a cheque to them with no conditions. During the election, the Liberals were all elbows up and talking about team Canada in the face of unjustified American tariffs on steel and aluminum, and I thought it was bad enough that the government has been elbows down since the election on protecting Canadian jobs. Now, does the government not see that by going along to get along with David Eby, it is not on team Canada, but on team China?

Response: Mr. Speaker, my answer was very clear, as have been my previous answers on this question: Federal government support goes only to operating costs; the federal government has no authority over BC Ferries. However, I want to object, in the strongest possible terms, to the insult to a premier of a Canadian province and a suggestion that a Canadian premier would act in the interests of China and not of Canada. All of our premiers are patriots, as are all members of this House.

June 18, 2025 – Tamara Kronis (Nanaimo-Ladysmith, CPC)

Question:  Mr. Speaker, the BC Ferries deal did not sink Canadian shipbuilders; Ottawa did.

Our shipbuilding unions say Canadian companies could not bid because federal policies stack the deck against them. It is the federal government's job to set fair conditions so provinces can build at home, but all the government does is rearrange Liberal deck chairs. What I want to know is this: Will the Liberals fix their broken policies or are we going to just keep waving goodbye to good Canadian jobs from the dock?

Response: Mr. Speaker, there seems to be some confusion among the Conservative MPs about what is provincial jurisdiction and what is federal jurisdiction. There is no such confusion on this side of the House. Having said that, I want to inform all members of this House that I have instructed all the entities under control of Transport Canada to buy Canadian and, where that is not possible, to buy reciprocally from free trade partners that give Canada access to their government procurement. That is what we should all be doing at all levels of government.

Statements by Members

June 20, 2025 – Jeff Kibble (Cowichan-Malahat-Langford, CPC)

Mr. Speaker, last week B.C. Ferries announced that it will purchase four new full-sized ferries from a Chinese Communist Party state-owned shipyard rather than a Canadian shipyard. Indeed, our shipyards cannot compete with China's cheap labour, lower safety standards and poor environmental regulations. Canadian union workers, industries and shipyards all feel betrayed. The Minister of Transport stated that this is not a federal issue, despite the Liberals subsidizing B.C. Ferries to the tune of $36 million a year. The fact remains that hundreds of millions of dollars will be sent to a Chinese state-controlled shipyard, supporting China's economy and its workers.

Earlier this week, the Minister of Transport stated that she shared her concerns in a letter sent to B.C. Will the Minister of Transport please share specifically who she sent the letter to in B.C.? Will she make the letter public for all to see? Will the Minister of Transport withhold the $36-million subsidies unless the B.C. government puts Canada first and invests in Canadian shipyards?

Related Written Questions – 45th Parliament

Q-206 — Gord Johns (Courtenay-Alberni, NDP) — With regard to federal funding for ferries, broken down by fiscal year since 2015-16: what are the details of all federal grants, contributions and loans related to capital or operating costs for ferries, including the (i) name of the recipient, (ii) province or territory in which the recipient is located, (iii) date the funding was received, (iv) amount received, (v) department or agency that provided the funding, (vi) program under which the grant, contribution or loan was made, (vii) nature or purpose of the funding?  

Status: not yet tabled.

Related Written Questions – 44th Parliament

Q-1413 – Stephen Ellis (Cumberland-Colchester) – With regard to Marine Atlantic's decision to have its new ferry built at a shipyard in China: (a) what is the value of the contract for the new ship; (b) did Marine Atlantic study the economic impact of choosing a shipyard in China as opposed to a Canadian shipyard, and, if so, what is the impact, including the (i) number of jobs created overseas as opposed to in Canada, (ii) approximate dollar value of economic benefits, both direct and indirect, for the economy in China as opposed to the Canadian economy; (c) did Marine Atlantic invite Canadian shipbuilders to submit proposals related to the construction of these vessels, and, if so, which shipbuilders submitted proposals and why were those proposals not accepted; (d) does Marine Atlantic plan on altering its procurement processes in the future to ensure that it purchases vessels built in Canada, and, if so, what are the details of such a plan; (e) what action, if any, has the minister responsible taken to ensure that future vessel procurement involves construction at Canadian shipyards; and (f) will Marine Atlantic be required to pay import duties on the vessel, and, if so, what is the dollar value and percentage that is expected to be paid in duties?

Response:

Transport Canada

Part (e) Marine Atlantic Inc. is an independent Crown corporation that operates at arm's length from the Government of Canada and is responsible for managing its business decisions and operations, including those related to procurement.

For the capital work that is done for its vessels, Marine Atlantic continues to conduct its refits and maintenance in Canada, as operationally feasible, to support the regional economy.

Marine Atlantic

Part (a) The bare boat charter has a cost of approximately $100 million.

Part (b) Marine Atlantic pursued a competitive procurement process open to domestic and international bidders for the five-year charter of a newly constructed vessel. Stena North Sea Ltd. was the highest ranked proponent. The economic impact of the shipyard selected by Stena to construct the vessel was not considered within the competition.  

Part (c) The competition was open to domestic and international suppliers experienced in the operation and chartering of Ro-Pax vessels. Stena North Sea Ltd. was the highest ranked proponent based on the established evaluation criteria.

Part (d) Marine Atlantic’s procurement processes are subject to domestic and international trade treaties.

Part (f) Marine Atlantic does not anticipate being required to pay import duties.

Q-2713 – Michael Barrett (Leeds-Grenville-Thousand Islands and Rideau Lakes) – With regard to government support for Eastern Canada ferry services and the Wood Islands-Caribou route: (a) what is the total cost to date for the design and construction of the new ferry; (b) what are the details of all contracts over $1,000 entered into by the government related to the new ferry since November 4, 2015, including, for each, the (i) date, (ii) vendor, (iii) amount, (iv) description of the goods or services provided; (c) what is the launch date for the new vessel; (d) how far behind schedule is the design and production of the new vessel; (e) since November 4, 2015, what has been the total cost for maintenance and repair of the MV Holiday Island and MV Confederation vessels; (f) of the vessels in (e), how many hours of downtime did each vessel have during the season; (g) how many crossings were lost due to vessel downtime; (h) what is the total loss of revenue due to vessel downtime; and (i) what is the total cost to secure interim ferries for the route, including the (i) purchase, (ii) lease, (iii) rental, (iv) maintenance, (v) repairs, (vi) retrofit?

Response: Transport Canada

a) As of May 31, 2024, Canada has spent approximately $28.55 million (M) (including taxes) on the project.    

(b) There are two contracts associated with the design and construction of the two new ferries for Transport Canada:

Ancillary Contract with Chantier Davie Canada Inc.

• Date of Contract Award – November 27, 2019
• Current Total Contract Amount – $25.3M including taxes
• Description – The contractor is required to perform specific tasks related to the design of two new ferries such as engineering studies, including identifying the preferred type of propulsion system to meet the Government of Canada’s environmental objectives, developing Concept and Preliminary Designs for the vessels, engaging a Classification Society and other key subcontractors to support design activities, and developing substantive cost estimates.

Contract with Joint Venture of Lengkeek Vessel Engineering and Knud E. Hansen A/S - External Expert Advisors to Support Transport Canada

• Date of Contract Award – November 14, 2019
• Current Total Contract Amount – $7.23M including taxes
• Description – Provision of expert advisor services in marine engineering and naval architecture to support Transport Canada’s activities related to the design and construction of the two new ferries. Key activities include supporting the development of: the statement of operational requirements; technical statement of operational requirements; the interior layout of the vessels; changes to the shore-based infrastructure to accommodate the new vessels; project risk management; and the development of cost estimates for the new ferries, including life cycle costs.

  (c) The new ferry to replace the MV Holiday Island is expected to enter into service in late 2028, but this date is contingent upon the achievement of key project milestones associated with the finalization of design work, costing for the new vessel, as well as the timing of a construction contract.    

  (d) In May 2019, the Government of Canada released an Advance Contract Award Notice that indicated that the MV Holiday Island replacement would be ready for delivery 60 months after contract award. The Government of Canada entered into contract with Chantier Davie Canada Inc on November 27, 2019, meaning that the original delivery date for the vessel was approximately late 2024 or early 2025.

  (e) The total cost to maintain and repair the MV Holiday Island and the MV Confederation from the 2015 operating season to the 2023 operating season (inclusive), was approximately $36.8M. It should be noted that the MV Holiday Island was removed from service in summer 2022 due to an onboard fire and has been disposed of in an environmentally conscious manner.

  (f) Northumberland Ferries Ltd. is not required to report the hours of downtime to the Government of Canada – service delivery is reported based on the number of crossings made and the number of crossings cancelled.

  (g) Service on the Wood Islands, Prince Edward Island – Caribou, Nova Scotia, route is seasonal. Service begins on May 1st and ends in mid-December.

Northumberland Ferries Ltd. reported a total of 1,541 cancelled crossing during the 2015 to 2023 operating seasons, out of a total of 23,432 scheduled crossings (i.e., approximately 6.6% of all sailings were cancelled).

Crossings are cancelled for a number of reasons, including inclement weather (especially in December), mechanical issues, or any other conditions that would make sailing unsafe such as  
ultra-low tides.

The annual breakdown of cancelled crossings is provided in the following table.

Operating Season	Number of Crossings Made	Number of Crossings Cancelled	Total Schedule
2015	2,816	159	2,975
2016	2,211	143	2,354
2017	2,825	111	2,936
2018	2,790	146	2,936
2019	2,766	196	2,962
2020	1,756	84	1,840
2021	2,054	98	2,152
2022*	2,139	289	2,428
2023**	2,534	315	2,849

 * On July 22, 2022, the former MV Holiday Island was removed from service due to an onboard fire. The MV Saaremaa I, entered into service on August 20, 2022 as an immediate replacement vessel and was in service until approximately October 14, 2022.

**The MV Confederation was out of service for approximately 22 days due to unexpected mechanical issues.

(h) Under the Ferry Services Contribution Program, the Government of Canada provides funding to Northumberland Ferries Ltd. (NFL) to cover the service’s operating deficit (i.e., operating costs, less revenues) and expenditures related to maintaining and repairing Transport Canada’s vessels and terminals. The funding is provided through monthly payments in accordance with an annual budget.

The ferry operator does not provide Transport Canada with estimates for revenue losses due to cancelled sailings, regardless of the cause.

  (i) (i) (ii) (iii) (iv) (v) (vi) After the MV Holiday Island was removed from service in July 2022, Northumberland Ferries Ltd. chartered the MV Saaremaa I from the Société des Traversiers du Québec as an immediate-term replacement. The cost to charter the vessel for the 2022, 2023 and 2024 operating seasons is expected to be around $10M, with the precise figure to be determined by the number of days the vessel is ultimately chartered in 2024. The MV Saaremaa I is currently in service and will be used to provide two-vessel service that meets traffic demand for the 2024 operating season. The vessel will be used until the MV Fanafjord is ready for service.

  On November 16, 2023, the Minister of Public Services and Procurement announced that the Government of Canada awarded a contract to Nye Fanafjord AS to acquire the MV Fanafjord as an interim solution for the former MV Holiday Island until the new replacement ferry is ready for service. The initial contract value was approximately $38.6M. The final cost, reflecting additional work required to comply with regulatory and operational requirements and the purchase of critical spare parts will be known once all work is completed and the vessel is delivered. The total cost of the vessel is expected to be approximately $43.5M.