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Vancouver Sun
5 days ago
- Business
- Vancouver Sun
Ottawa supporting B.C. in creating jobs in China
VICTORIA — B.C. Ferries CEO Nicolas Jimenez expects to save hundreds of millions of dollars in interest payments on the purchase of four ferries from China thanks to a low-interest loan from a Canadian government agency. 'It's a huge deal,' said Jimenez, who hailed the loan as 'an extraordinary show of support' from the Canada Infrastructure Bank. 'It provides enormous savings for us over the term of the agreement,' the Ferries boss told Gregor Craigie of CBC Victoria. 'If we fully exercise the loan, we'd be saving about $650 million in interest charges.' The $1 billion loan — $690 million for the vessels and a further $310 million for electrification infrastructure — comes with an interest rate of 1.8 per cent, significantly below the Bank of Canada rate of 2.75 per cent and the prime rate of 4.95 per cent. Stay on top of the latest real estate news and home design trends. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Westcoast Homes will soon be in your inbox. Please try again Interested in more newsletters? Browse here. The loan would appear to cover much of the cost of the purchase. While Jimenez has declined to disclose the exact price tag, he says that the rival European bids would have cost $1.2 billion more or roughly 'double' what Ferries will pay China for the four vessels. Jimenez discussed the favourable terms the same day as news of the loan was broken by Bill Curry of the Globe and Mail. The bank finally confirmed the loan, though the bank and ferries had signed the agreement on March 28 and the first of four payments was advanced on May 22. The news prompted an immediate response from federal Infrastructure Minister Gregor Robertson, whose Liberal government has been critical of the decision to purchase the ships from China as opposed to domestic shipyards. 'Robertson has asked for a briefing from the Canada Infrastructure Bank's CEO on the kind of considerations this decision raises,' said the statement from his office. Fair to ask why a federal agency for promoting Canadian infrastructure is putting up a $1 billion low-interest loan to underwrite shipbuilding jobs in China. Robertson, who represents a Vancouver riding, should also seek a full accounting from his federal cabinet colleague, Transport Minister Chrystia Freeland. Just last week Freeland expressed 'great consternation and disappointment' about the China deal in a letter to her provincial counterpart, Mike Farnworth. She sought assurances that no federal funding for B.C. Ferries would be used to fund any part of the contract with China. The letter made no mention of the $1 billion loan from the infrastructure bank. The lapse justified Premier David Eby's response to Freeland that the federal minister should 'mind your own business.' Freeland and Robertson are not the only politicians who've tried to take some distance from the B.C. Ferries purchase. When the decision to go with China was announced earlier this month, Farnworth put out a critical statement as well. He also maintained that B.C. Ferries is independent of government, a claim not supported by the evidence. The chair of B.C. Ferries is Joy MacPhail, a former NDP cabinet minister. When Premier John Horgan installed her as chair in 2022, she immediately fired CEO Mark Collins (at a severance cost in the $1 million range) and replaced him with Jimenez. The board of the B.C. Ferry Authority, which 'oversees the strategic direction of B.C. Ferries in the public interest,' includes Marie Della Mattia, who managed the NDP's re-election campaign, Claire Trevena, a former NDP transportation minister and advocate of building ships in B.C., Gary Coons, a former NDP MLA, and Laird Cronk, the former head of the B.C. Federation of Labour. The notion that they would have endorsed a strategic direction at odds with the NDP government is nothing short of preposterous. Besides, Jimenez says the New Democrats were being kept in the loop as far back as last summer. 'This is really a B.C. Ferries decision and a B.C. Ferries managed process,' Jimenez told Jas Johal of CKNW radio last week. 'But certainly we have been keeping the province aware of this procurement for well over a year — helping them understand what the timelines look like, helping them understand what criteria we're going to use to evaluate the winning bid, how we would incorporate Canadian content into our evaluation criteria. These conversations have taken place over many, many, many, many months — as far back as last summer.' Jimenez says it is too late to reverse the deal without severe penalties. 'The contract is signed,' he said. 'But the question I would put to people is what options would people say we should go with? If the option was you should just build domestically — well that's not possible. 'The (Canadian) yards themselves have told us, I'm sorry, we don't have the capability to deliver your ships in your time frame and we (B.C. Ferries) don't have the luxury of waiting.' Perhaps the need for a fifth, backup ship provides a way out for senior governments. The request was turned down by the independent ferry commissioner. But the federal and provincial governments could ask for bids to construct the fifth ship with as much Canadian content as possible. It could then be leased to B.C. Ferries as a replacement vessel. vpalmer@
National Observer
5 days ago
- Business
- National Observer
Federal bank is loaning $1B for BC Ferries to buy Chinese-made ships
A federal Crown corporation is loaning BC Ferries $1 billion to help buy four Chinese-made ships, a purchase that federal Transport Minister Chrystia Freeland recently said was dismaying and should involve no federal funds. Freeland had written to the province on June 16, asking BC to confirm "with utmost certainty" that no federal funds would be "diverted" to the purchase from China Merchants Industry Weihai Shipyards. Canada Infrastructure Bank confirmed the loan on Thursday, saying the new electric ferries "wouldn't likely be purchased" without the financing. Jeff Groot, executive director of communications for BC Ferries, said the company signed the loan with the bank before it was finalized that the Chinese shipyard would win the contract, and before Freeland's letter to her provincial counterpart, Mike Farnworth. He also said there were no Canadian bidders for the contract. BC Ferries CEO Nicolas Jimenez said in an interview Thursday that he "was surprised and disappointed" by Freeland's letter. "I think it was the general tone and direction of the letter," he said. "What we would look to the federal government is to be a partner in the delivery of ferry renewal in British Columbia. I didn't feel that or see that in the letter, and I would hope to be looking to work with the federal government and the provincial government." He said he would "have expected more engagement and dialogue" from Ottawa to build vessels for a provincial ferry system that had "really outgrown itself." Freeland's letter expressed "great consternation and disappointment" with the ferry operator over the purchase. The bank said the low-cost loan consists of up to $690 million to buy the vessels and up to $310 million for electrification infrastructure. Jimenez said the full loan would save BC Ferries about $650 million in interest. He said "commercial realities" for both BC Ferries and the shipyard prevent him from talking about the full size of the agreement, but added that the loan would cover a "substantial" part of the deal. "It is, in our view, a game-changing financial arrangement that has allowed us to make this significant investment in fleet renewal," he says. He added that it would also improve affordability. BC Ferries said the vessel portion of the bank's loan would represent a maximum of 42.5 per cent of the total purchase price. That would suggest that if the maximum $690 million were spent on the new ferries, their minimum cost would be about $1.6 billion. But Groot said that was "not representative" of the cost, and there was "flexibility to repurpose" unspent amounts on the vessel side of the loan to cover infrastructure costs. Jimenez also said it was impossible to "reverse engineer" the cost of the ships from the loan amounts. BC Ferries also plans to issue bonds later this year to help pay for the ferries, but Jimenez declined to give details about how much of the purchase these would cover. Groot had said in a previous statement that the contracted Chinese shipyard had "the strongest bid by a significant margin." Jimenez said BC Ferries was held to what he called a "double-standard" when it came to purchasing ferries abroad. He said that in the last 10 years, Canadian companies had hired Chinese shipyards to build about 100 ships. Marine Atlantic, a federal Crown corporation, was one of the companies. Through an arrangement with Stena RoRo, it hired the same shipyard building the new vessels for BC Ferries to build one ship. "But somehow, when it comes to building a vessel, and particularly a ferry, there is an expectation that that is really the responsibility of BC Ferries to do this single-handedly, when, in fact, it's much more complicated than that," he said. "An industrial strategy requires much more than just putting an order into a local shipyard." BC's Ministry of Transportation said in a statement Thursday that the province had no role in the funding arrangement between BC Ferries and the Canada Infrastructure Bank. "As such, it's for the federal government and the BC Ferries to comment," it said. The Canada Infrastructure Bank is accountable to Parliament through the federal Minister of Housing, Infrastructure and Communities, former Vancouver mayor Gregor Robertson. Mohammad Hussain, a spokesperson for Robertson's office, said Robertson has asked for a briefing from the bank's CEO "on the kind of considerations this decision raises." Hussain called BC Ferries' procurement decision "extremely disappointing." "The Canada Infrastructure Bank supports key infrastructure projects that are needed in our communities," he said. "While our government had no influence or participation in this procurement decision, we will still emphasize once again the importance of supporting domestic industry." BC Conservative Harman Bhangu, transportation critic for his party, said in a statement that Freeland needs to "immediately" reconsider the terms of the loan to protect Canadian jobs, businesses and security interests. This report by The Canadian Press was first published June 26, 2025.
Toronto Star
6 days ago
- Business
- Toronto Star
Federal bank loaning $1B for BC Ferries to buy Chinese-made ships
VICTORIA - A federal Crown corporation is loaning BC Ferries $1 billion to help buy four Chinese-made ferries, a purchase that federal transport minister Chrystia Freeland recently said was dismaying and should involve no federal funds. Canada Infrastructure Bank confirmed the loan on Thursday, saying the new electric ferries 'wouldn't likely be purchased' without the financing.
Winnipeg Free Press
6 days ago
- Business
- Winnipeg Free Press
Federal bank loaning $1B for BC Ferries to buy Chinese-made ships
VICTORIA – A federal Crown corporation is loaning BC Ferries $1 billion to help buy four Chinese-made ferries, a purchase that federal transport minister Chrystia Freeland recently said was dismaying and should involve no federal funds. Canada Infrastructure Bank confirmed the loan on Thursday, saying the new electric ferries 'wouldn't likely be purchased' without the financing. It says the low-cost loan consists of up to $690 million to buy the vessels and up to $310 million for electrification infrastructure. Freeland wrote to the province on June 16, asking B.C. to confirm 'with utmost certainty' that no federal funds would be 'diverted' to the purchase from China Merchants Industry Weihai Shipyards. Jeff Groot, executive director of communications for BC Ferries, says in an interview that BC Ferries signed the agreement with the bank before Freeland's letter to her provincial counterpart, Mike Farnworth. Monday Mornings The latest local business news and a lookahead to the coming week. BC Ferries CEO Nicolas Jimenez says in a news release that the full loan would result in expected savings of about $650 million in interest. This report by The Canadian Press was first published June 26, 2025.
Yahoo
6 days ago
- Business
- Yahoo
Federal bank loaning $1B for BC Ferries to buy Chinese-made ships
VICTORIA — A federal Crown corporation is loaning BC Ferries $1 billion to help buy four Chinese-made ferries, a purchase that federal transport minister Chrystia Freeland recently said was dismaying and should involve no federal funds. Canada Infrastructure Bank confirmed the loan on Thursday, saying the new electric ferries "wouldn't likely be purchased" without the financing. It says the low-cost loan consists of up to $690 million to buy the vessels and up to $310 million for electrification infrastructure. Freeland wrote to the province on June 16, asking B.C. to confirm "with utmost certainty" that no federal funds would be "diverted" to the purchase from China Merchants Industry Weihai Shipyards. Jeff Groot, executive director of communications for BC Ferries, says in an interview that BC Ferries signed the agreement with the bank before Freeland's letter to her provincial counterpart, Mike Farnworth. BC Ferries CEO Nicolas Jimenez says in a news release that the full loan would result in expected savings of about $650 million in interest. This report by The Canadian Press was first published June 26, 2025. Wolfgang Depner, The Canadian Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
