As he was granting wishes in the new federal government’s first budget, Finance Minister Bill Morneau waved his magic wand over B.C. Ferries. And the corporation saved $50 million.
Ferries is having three intermediate-class vessels built at the Remontowa shipyard in Poland, and it faced a tariff bill of $50 million to import them into Canada. Thanks to lobbying by the corporation, B.C. Transportation Minister Todd Stone and others, that bill has vanished, cutting a $250-million project to $200 million.
The cost-saving won’t translate into lower ferry fares, but it will mean that some other projects will be done sooner. If you think your job jar is full, check out the one at B.C. Ferries. It has about 700 capital projects, from ships to terminals to new computer systems.
With an average age of 33 years, the fleet needs a new ship every year for about 12 to 15 years, says Ferries CEO Mike Corrigan.
Corrigan gives full marks to Stone for helping turn the tide on the tariff issue. In December, the minister was one of many supplicants who journeyed to Ottawa with wish lists for Infrastructure Minister Amarjeet Sohi and Transportation Minister Marc Garneau.
His was not the only voice on tariffs. B.C. Ferries, the Newfoundland government, other ferry systems and the Canadian Ferry Operators Association have been pushing for the change for years. Corrigan says the former Conservative government was also looking favourably on the request.
There is a precedent.
When the three Coastal-class vessels and Northern Expedition were built in Germany in 2007 and 2008, the federal government gave B.C. Ferries a break on $119 million in tariffs. Building those ships offshore was a contentious issue because shipyards in B.C. didn’t get the contracts. Granting Ferries relief from the tariffs that were supposed to protect Canadian industry added insult to injury.
This time around, most of Canada’s shipyards have as much work as they can handle, thanks to the federal government’s program of building new navy, coast guard and fisheries vessels. For example, a $140-million upgrade contract announced Thursday for the Spirit-class ships will also go to Remontowa; Seaspan’s Vancouver yard pulled out of the bidding because it has so much work.
The argument, Corrigan says, is that since Canadian shipyards are running close to capacity, the tariff is just a penalty that ends up being passed on to ferry passengers. He is making a similar argument in lobbying to get relief from the tariff that will be due on the Spirit upgrades, which will convert the ships to run on liquefied natural gas, as well as diesel.
In Ottawa, Stone raised some other longstanding issues about ferries. He asked Garneau to look at the crewing levels that are mandated by Transport Canada. Corrigan points out that a new Remontowa-built ship similar to the intermediate vessels is in service in Denmark, using a crew of eight, compared with the 14 to 15 that will be required by Transport Canada.
When it comes to building ferries, Stone asked to have construction of ships and terminals made eligible for federal infrastructure funding under the New Canada Building Fund. Since roads and bridges get such cash, why wouldn’t ferries qualify?
The feds also have to do something about the persistent injustice in the support for the West Coast compared with the East Coast. The Atlantic ferry system gets $120 million a year from Ottawa, while B.C., with one of the largest ferry services in the world, gets only $30 million.
Fair treatment for B.C.’s ferry system is the kind of magic we have awaited for decades.
