【By Observer Net, Ruan Jiaqi】

According to China Central Television, the United States has announced that it will increase tariffs on Canada to 35% from August 1. After being hit hard by Washington, some Canadian politicians have bizarre thinking and instead started targeting Chinese enterprises.

At the beginning of June, the Canadian ferry operator "BC Ferries" had announced that it would use a 1 billion CAD loan obtained from the Canadian Infrastructure Bank to purchase four new hybrid oil-electric ships from a Chinese shipbuilding company. This move was met with public opposition from many Canadian politicians.

Soon after, Dan Albas, a member of the Conservative Party and co-chair of the House of Commons Committee on Transportation, demanded an investigation hearing on the transaction. He claimed that during the ongoing Canada-US trade war, the federal government needs to explain how it is using one billion in public funds to fund overseas shipbuilding projects.

On Friday local time (August 1), the Canadian House of Commons Committee on Transportation launched an investigation into this loan. During the opening speech at the committee meeting, Canadian Transport Minister Chrystia Freeland said she felt "uncomfortable" about this procurement plan, and she was "very disappointed" with BC Ferries' decision to purchase ships made in China.

In her speech, Freeland repeatedly emphasized that public funds should be used to support local employment. She claimed that she had sent 71 letters, instructing all organizations under the Department of Transportation to prioritize Canadian products in major procurement, especially Canadian steel, aluminum, and wood.

She also insisted that even if there were no Canadian alternatives, priority should be given to trade partners with which Canada has reciprocal procurement agreements.

Freeland stated that the Canadian Department of Transportation will soon hold meetings with provinces and regions, ferry owners and operators, shipyards, labor representatives, and the steel industry. She also mentioned that the second meeting with major railway operators is being prepared.

According to reports, Freeland had written to the British Columbia provincial government in June, criticizing the province's transportation minister, Mike Farnworth, saying that "in the current geopolitical context, BC Ferries' choice of a Chinese shipbuilder disappointed me." She asked them to verify and confirm that "no federal funds would be used to support the purchase of new ferries."

However, when asked by MPs whether the government would push to cancel the loan, Freeland did not give a direct answer, only vaguely stating that she agreed that the steel and aluminum industries are in a crisis and need government support.

BC Ferries passenger ferry. Screenshot from video

On June 10 local time, BC Ferries disclosed on its website that after a five-year procurement process, the company had selected China's China Merchants Industry Group Weihai Shipbuilding Co., Ltd. to build four large passenger ferries for its fleet. The new ferries will replace four aging vessels that are due to retire, and are expected to be put into service between 2029 and 2031.

According to reports, the Canadian Infrastructure Bank provided a 1 billion CAD loan for the transaction, and noted that without this funding, "BC Ferries would likely not have been able to purchase" these new ferries. According to the bank's statement, 690 million CAD of the low-interest loan will be used for ship purchases, while the remaining 310 million CAD will be used for electrical infrastructure development.

However, as soon as the news broke, it caused a big uproar. Some Canadian politicians again raised the clichés of "unfair trade" and "economic security."

The meeting on Friday passed a motion requiring the Canadian Infrastructure Bank, BC Ferries, and the federal government to submit documents to the committee by the end of August, including the complete bond purchase agreement and records of all ship procurement proposals.

According to reports, during the meeting, Canadian Infrastructure Minister Robertson and the CEO of the Canadian Infrastructure Bank, Cory, testified that ordering ships from a Chinese shipbuilder was a decision made by BC Ferries, and that the federal government and the bank did not participate in their procurement decision. Cory added that the bank had no authority to require project partners to choose components from anywhere.

Robertson claimed that he was "disappointed" with BC Ferries' decision, and he hoped to see more ships built in Canada, as well as more opportunities for domestic industries to participate in major infrastructure projects. However, he also admitted that BC Ferries did not receive bids from Canadian shipbuilders during the procurement process.

He also stated that this procurement was a "critical investment," and that the construction of these ferries was crucial.

Robertson promised the MPs that the operation and maintenance of the ferries and docks would create local jobs in Canada. The government is closely studying how to better coordinate industrial policy, procurement tools, and investment incentives to "support and expand Canada's capacity in important sectors such as shipbuilding."

BC Ferries' CEO Jimenez explained that the company received six bids that met the requirements, but all came from foreign shipbuilders. Although two Canadian shipbuilders passed the pre-qualification, they did not submit formal bids.

"The only option was to accept foreign bids, otherwise there would be no new ferries," Jimenez said. BC Ferries ultimately chose the bid with the best overall value.

He further explained that the cost of other options outside of Chinese shipbuilders would increase by 1.2 billion CAD, and "even if there were Canadian bids, the cost would be higher, and the shipbuilding time would be extended by 10 years."

"Residents of British Columbia urgently need safe, economical, and reliable new ferries to ensure travel and economic operations. Making this choice was to avoid imposing unaffordable and unnecessary fare increases on our passengers and residents of British Columbia," Jimenez said.

He also mentioned that during the entire construction process, BC Ferries will send a Canadian expert team to China to ensure that the quality and safety of the ships meet high standards.

For the endless political debates in parliament, some regional leaders who rely on ferries feel helpless. They told Canadian media that residents don't care where the new ships are built, as long as they provide more reliable services and affordable fares.

Sicamous is the administrative center of the Sunshine Coast region in southwest British Columbia. Local leader Henderson expressed his dissatisfaction, saying that for community residents, ferries are as important as the highway system, but these politically motivated statements completely ignore the needs of the community.

"We need these ships, we wish they were already built yesterday," Henderson said. "As heavy users of ferries, we really don't care where they are built, because we need them so much."

"If we stop this and start over, we won't wait just a few months, but several years, and we don't have that much time," he said.

Local leader of Sicamous, Henderson

Andrew Leonard, the leader of Bowen Island in the southwest of British Columbia, also angrily said that the political controversy over the location of ferry construction is completely "out of touch" with the needs of local residents.

He said that when the aging ships operated by BC Ferries break down and stop operating, his residents are affected. "If Canada can't build these ships, what's the problem with building them in China?"

Trevor Heaver, a professor of transport economics at the University of British Columbia, pointed out that insisting on building ships in Canada even if it costs more violates the principles of global free trade.

"It's very Trump-like to think that the ships operated by BC Ferries should be built in Canada," Heaver sarcastically said. "We must fundamentally accept the fact that we can't do everything ourselves. We must rely on competitive mechanisms to efficiently use resources and benefit consumers."

This article is an exclusive article by Observer Net. Reproduction without permission is prohibited.

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