A commentary by the chairman of the Canadian Marine Industries and Shipbuilding Association.
We are disappointed in B.C. Ferries once again.
Some of our members tried to respond to the request for a proposal regarding the four major vessels B.C. Ferries is having built. They concluded, however, that the competition was skewed toward Asian and European builders.
In our opinion, it could never have been a Canadian shipyard or supplier.
During the prolonged process — the second tendering attempt by B.C. Ferries for these vessels — some of our members suggested ways to level the playing field for Canadian suppliers, such as:
• Mandate and rate a requirement for Canadian and B.C. content in the build strategy
• Reduce the contractual guarantees needed, since most offshore builders have a high degree of foreign government ownership/sponsorship or subsidy, which renders Canadian shipyards at a disadvantage.
• Rate elements for economic benefit to B.C.
• Reduce the impact of lowest price on the selection criteria (offshore shipyards often work to lower safety and environmental standards, don’t allow unions and have heavy labour subsidies or incentives from their governments meaning much lower wages) and consider alternative service delivery. That way, a Canadian company could offer a turnkey solution to B.C. Ferries, meaning that B.C. Ferries would charter the vessels rather than building and owning them.
This last suggestion would significantly de-risk the procurement, as well as eliminate any burden to B.C. Ferries and taxpayers, who would have little or no outlay of capital.
This is a common practice among large ferry operators around the world who see the economic and operational advantage of chartering over owning their fleets of large, expensive vessels. Essentially, B.C. Ferries would be chartering out the service route and allowing the charterer to take full responsibility for delivering the service to the schedule established by B.C. Ferries.
No Canadian shipyard bid, but some tried to participate in the process and our marine suppliers were interested to support bids.
By not giving Canadian suppliers any realistic opportunity at billions of dollars in Canadian/B.C. taxpayer-funded business, it further harms our industry as the 40-50% of the build costs related to material will be sourced offshore.
That has a huge life-cycle impact whereby spares, specialized technical support and logistic costs will come from overseas for the 25- to 30-plus year life of these vessels.
Therefore, B.C. and Canadian taxpayers will never get back the economic benefit multiplier — up to three to four times — that would be associated with Canadian-sourced material and services.
It is essentially money lost forever, at the expense of the B.C. taxpayers. While B.C. Ferries often likes to say that B.C. marine suppliers benefit because they will do the hull and machinery repairs over the life cycle of the vessels, this is not relevant since they would do that work no matter where the ship is built.
The other huge loss, in addition to the economic benefits, is to the B.C. and Canadian labour force, who will miss out on millions of hours of work and skills development.
The B.C. marine industry, through the innovative build strategy used to construct the successful Spirit-class ferries, has proved that it can build excellent ferries when given an opportunity.
However, B.C. Ferries has missed a huge opportunity to truly commit to the Canadian and B.C. marine industry, provide real long-term economic benefits to the province and contribute to the development of the skills that they will need to depend on in the coming years.
Instead, it has opted to use their default offshore procurement build strategy and leave the B.C. taxpayer to see money sail overseas.
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