Benefits to Building Ferries in B.C.: Study

BC Ferries’ procurement policy | BCBusiness
BC Ferries’ “new build” program could see as many as 26 vessels replaced over the next 15 years—at an estimated $2.5 billion according to the agency’s VP for fleet operations, Jamie Marshall.

Report touts the benefits of a B.C.-first procurement policy, as the crown corporation nears awarding its largest contract in a decade 

The labour-friendly Columbia Institute released a report Monday that argues for a new made-in-B.C. procurement policy at BC Ferries.
The study, which examined the question of public contract shipbuilding in B.C., points to $378 million in economic growth, $100 million in tax revenues for the federal and provincial governments, and 1,100 new manufacturing jobs as being among the key benefits.
Published by the Columbia Institute, which has ties to several major unions, the study looks to reignite the debate around the B.C. government’s procurement policy, by comparing it to the federal government and Washington State’s “build local” policies.
“Just as the federal government has done with National Defence and Coast Guard procurement, and just as is done by law in Washington State, the BC government and its entity BC Ferries can ensure the province benefit from the good quality manufacturing jobs that come with the building of new ferries,” concludes the report.
The province should implement a policy similar to the national shipbuilding procurement strategy, states the report. As part of a long-term plan to revitalize Canada’s marine industry, the federal government has awarded $11-billion in contracts to local shipyards.
The study comes as BC Ferries is close to awarding contracts for three new intermediate class ferries. Seaspan, B.C.’s biggest shipbuilder, withdrew its proposal because its contracts with the federal government, worth nearly $11 billion in total, have pushed it to capacity.
Fast Cats and Foreign Contracts
It’s been a decade since BC Ferries last awarded a major shipbuilding contract. In 2004, the winning bid for the $325-million contract for four Coastal class ferries went to German shipbuilder Flensburger Schiffbau-Gesellschaft. No local company submitted a serious bid at the time.
While the corporation reported that the Coastal class ferries came under budget, it was only because of favourable exchange rates at the time the contract was completed, according to the Columbia institute study.
The Columbia Institute report takes aim at the $800 million pricetag for those three ferries, and policies which push BC Ferries to buy from overseas: in 2006 and again in 2010, the federal government waived a 25 per cent import duty on foreign-built ferries, which the report argues sent money out of B.C.
Local manufacturers and the B.C. government have been reticent to commit to a B.C.-only procurement policy, although both are supportive of made-in-B.C. ferries. Seaspan president Jonathan Woodworth told the Sun in 2012 that future ferries could be built at its shipyards because of increased capacity from its federal shipbuilding contracts. Cabinet minister and North Vancouver MLA Naomi Yamomoto told the Sun that if the industry proves it is competitive, “we may see BC Ferries built in British Columbia.”
Memories from the much-politicized failure of the B.C.-built PacifiCats, which cost $270 million before massive cost overruns, has largely stymied the province’s appetite for a made-in-B.C. procurement policy.
But as BC Ferries’ “new build” program could see as many as 26 vessels replaced over the next 15 years­­–at an estimated $2.5 billion according to the agency’s VP for fleet operations Jamie Marshall–the Columbia Institute sees potential for a change in policy.