Building new ferries in B.C. would cost more. Is it worth it?

Click to play video: 'Should BC Ferries’ future ships be built locally?'
Should BC Ferries’ future ships be built locally?
WATCH: Seaspan Shipyards is leading an industry campaign calling on BC Ferries to pick local companies to build the next generation of vessels for its fleet. Aaron McArthur reports. – Jun 12, 2024

A BC Ferries vessel hasn’t been built in British Columbia since the start of the century, but later this month, the ferry company is slated to put out a competitive call for builders of its next seven major vessels.

B.C. shipbuilding giant Seaspan along with unions and suppliers have launched a new campaign dubbed Build Ferries BC that aims to have those vessels built here.

Click to play video: 'BC Ferries starts vessel replacement process'
BC Ferries starts vessel replacement process

“We’ve built up this tremendous capability to build what are very, very complicated and large vessels for the Canadian Navy and the Coast Guard,” said Dave Hargreaves, Seaspan’s senior vice-president of strategy, business development and communications.

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The last BC Ferries vessels built in B.C. were its two Spirit Class ferries and the infamous three PacifiCat fast ferries that were in service for just a year before being put out to pasture. Hargreaves acknowledges the fast cat debacle has left the province with some hesitancy about building more ferries at home, but said things have changed since they were built.

Click to play video: 'BC Ferries launches plan to avoid cancelled sailings'
BC Ferries launches plan to avoid cancelled sailings

At the time, no major shipbuilders existed in B.C. ready or willing to take the project on, meaning BC Ferries had to create its own company to manage the project.

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The industry has changed radically since then, Hargreaves said, pointing to the multi-billion dollar contracts Seaspan has inked with the federal government to build dozens highly complex Canadian Navy and Coast Guard vessels.

“What had to happen is all of this had to be built, which was really hard. It’s taken us 10 to 12 years to build this. Now we have it,” he said.

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Hargreaves conceded that building new ferries in British Columbia will cost more than if the job is done overseas. Skilled trades workers are paid more in B.C. than they are in Poland, Romania and parts of Asia where the B.C. industry’s primary competitors are located. Hargreaves argues the trade-off is worth it.

Click to play video: 'BC Ferries to be fined over staff-related cancellations'
BC Ferries to be fined over staff-related cancellations

“Do you flow $2 billion to $3 billion overseas with no benefits, or do you keep that money here and reap a whole bunch of benefits in terms of high-quality jobs, in terms of the supply chain, in terms of what’s built up in competitive capability?” he asked. “There are tremendous benefits, economic benefits, innovation benefits, expertise benefits.”

He added that building the vessels in B.C. would mean the province has domestic expertise to help with repairs and refits through the life of the vessels.

It’s a position supported by organized labour. Phil Vernoit, chair of the IBEW local 230 electrical workers union, said the higher cost of building at home doesn’t factor workers’ income taxes.

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“We’ve never considered the taxation that the government would receive back in consideration of the labour being performed in British Columbia, he said. “(By building overseas,) We could actually be going for the more expensive version of that vessel.”

He said the union had conducted its own economic study that found shipbuilding jobs are well enough paid to support two spinoff jobs outside the industry.

“The workers made enough money they would support the barbershop, the Starbucks barista, the White Spot because they would take their families out for dinner,” he said.

Click to play video: 'BC Ferries community engagement struggles'
BC Ferries community engagement struggles

B.C.’s labour minister was non-committal when asked about the concept on Wednesday.

“We should be proud of all the workers and the skills that they bring to workplaces, and build the product that we use and provide the services that we all rely on,” he said. “And I am sure that we have expertise in British Columbia and I am sure that all of those things are considered, making sure that the taxpayers get the best deal possible, at the same time creating local jobs as much as we can.”

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BC Ferries, meanwhile, appeared outright cool to the concept.

“Our customers have highlighted affordability as one of their top priorities,” the company said in a statement. “We simply cannot tell them they need to pay higher fares because it potentially costs us hundreds of millions – or even billions – more just because we built these ferries in B.C.”

BC Ferries does spend a considerable amount of money at B.C. shipyards, with $14.5 million earmarked over the next decade for repair and maintenance work. That figure, however, pales in comparison to the potential scale of a new shipbuilding deal.

The company is expected to award the contract for the new vessels in December.

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