China-built major ships for BC Ferries draw mounting backlash, spark calls for contract cancellation

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The winning bid marks a clear departure from BC Ferries’ practice over the past two decades of awarding its major contracts to European shipyards.

However, in the wake of the pandemic, the global shipbuilding industry is facing a record backlog, driven by a surge in orders for new and converted vessels. In addition, pandemic-related impacts combined with the influx of orders have pushed global shipbuilding costs up by 40 per cent in recent years.

Overall, the shipbuilding industry has undergone major shifts. Even the two major European shipyards that BC Ferries had previously relied on for its largest contracts over the past two decades are now facing significant uncertainty and scrutiny.

BC Ferries’ previous European shipyards facing big challenges

Netherlands-based Damen Shipyards has been awarded nearly all of BC Ferries’ shipbuilding contracts for the past decade, including including the first six small Island-class vessels built between 2019 and 2021. Damen is currently in the process of building an additional four Island-class vessels, which will enter service in 2027.

Damen has various shipyard locations in Europe, including Romanian facilities of Damen Mangalia shipyard, which previously built the first batch of Island-class vessels, and the Damen Galati shipyard, which is currently building the second batch.

As of 2024, Damen no longer operates the Mangalia shipyard, following the facility’s insolvency and the dissolution of the facility’s joint venture with the Government of Romania, effectively substantially reducing Damen’s shipyard capacity in the country to only the Galati facility.

In August 2024, Damen published its 2023 annual report, sharing that its shipbuilding order backlog had risen from €8.8 billion in 2022 to €11.3 billion in 2023 — drastically up from €3.7 billion in 2023

“Unfortunately, even though Damen is doing well overall, there are still business units facing exceptionally challenging conditions,” reads the report, which notes the company recently successfully sought refinancing.

More recently, Damen has come under fire in its home country, with Dutch authorities initiating criminal proceedings against the Netherlands’ largest shipbuilder for allegedly violating international sanctions against Russia following the invasion of Ukraine. The charges against Damen in April 2025 relate to corruption, forgery, and money laundering, with the company accused of supplying goods and technology that boosted the Russian military over the last three years.

Another major European shipyard that BC Ferries previously worked with is Flensburger Schiffbau-Gesellschaft (FSG) in Germany, which built the fleet’s three large Coastal-class vessels in the late 2000s. However, FSG has faced financial difficulties since 2019, culminating in bankruptcy in late 2024, with new ownership being sought in early 2025.

No Canadian bids amid fierce competition

Although Canadian shipyards were invited to bid on BC Ferries’ new major vessel contract, none ultimately submitted a bid. However, there was interest: in 2024, B.C.-based Seaspan led a campaign urging BC Ferries to build the new major vessels locally.

In direct response to this domestic-build campaign, BC Ferries stated at the time that such an approach would require substantial funding support from both the provincial and federal governments, as building large ships in Canada could cost hundreds of millions — or even billions — more than constructing them internationally.

But this is not an outlier. Over the past two decades, Canadian shipyards have not participated in the vast majority of BC Ferries’ new ship procurements, largely due to their expectation that they cannot compete on price with international shipyards.

But there are now also major cost pressures with international shipyards, never mind Canadian shipyards.

While traditional European shipyards with experience in building large ferries are shrinking, there has been an explosive growth in the size and output of Chinese shipyards, which are now responsible for over 50 per cent of the world’s shipbuilding in terms of tonnage.

The exact field of competition for the contract to build the four new major vessels is not publicly known, but BC Ferries has essentially painted the decision as being caught between a rock and a hard place. Ultimately, the ferry corporation determined that CMI Weihai was not only price-competitive, but also possessed the industrial and technological capacity, a proven track record in constructing large ferry vessels, and the ability to meet the required delivery schedule.

Daily Hive Urbanized first reported on BC Ferries’ new major vessels program in 2018, when the ferry corporation signalled its intention to replace all five aging C-class vessels. At the time, the goal was to have the first new replacement vessel in service by 2024.

However, the pandemic delayed the start of the program, forcing BC Ferries to extend the use of vessels that have already reached the end of their intended lifespan — resulting in reduced reliability and escalating maintenance requirements with each passing year.

Under the current contract order of four vessels to the Chinese shipyard, the first ship will enter service in Spring 2029 and the fourth ship will enter service in Summer 2031. The steel cutting process for the vessels will begin in Fall 2026.

These four vessels will replace the Queen of New Westminster, which was built in 1964, and the Queen of Alberni, Queen of Coquitlam, and Queen of Cowichan, which were built in 1976.

With these vessels well past their intended lifespan, there is a clear priority not only for a cost-competitive contract but also for selecting a shipyard capable of delivering the new vessels on schedule — minimizing the need to further extend the use of the aging ships. Moreover, with growing demand on the busy routes, the new vessels will significantly enhance both reliability and capacity, with each ship designed to carry approximately 52 per cent more passengers and 24 per cent more vehicles than the average capacity of the four aging vessels being retired.

“CMI Weihai is a global leader in passenger ferry construction, and shipbuilding more broadly,” said Nicolas Jimenez, CEO of BC Ferries, during the announcement.

“It was the clear choice based on the overall strength of its bid, including its technical capabilities, high-quality and safety standards, ferry-building experience, proven ability to deliver safe, reliable vessels on dependable timelines, and the overall cost and value it delivers for our customers — all essential as we continue to experience growing demand and the urgent need to renew our aging fleet.”

Although its numerous shipyard facilities are located across Mainland China, CMI is headquartered in Hong Kong.

The seaport city of Weihai, the location of of the shipyard that will build the BC Ferries order, is located on the Yellow Sea coast in Shandong province — directly west of South Korea, and southeast of Beijing and Tianjin.

The CMI Weihai shipyard spans a land area of 1.4 sq. km. and a usable sea area of 1.65 sq km., with 2.5 km of coastline, including 1.2 km of outfitting quays.

BC Ferries maintains that it conducted thorough due diligence in selecting CMI Weihai, noting that its team — sent to inspect the shipyard as part of the selection process — was impressed by the facility’s capabilities.

BC Ferries concluded that CMI Weihai has proven experience meeting Transport Canada standards. It also consulted some of CMI’s previous major ferry customers.

The shipyard built modern ferries for operators such as Canadian federal Crown corporation Marine Atlantic’s services in the Maritime provinces, and Swedish giant Stena Line, which is one of the world’s largest ferry operators, with major routes spanning northern Europe.

“Stena RoRo has contracted CMI Weihai Shipyards to build 15 vessels, delivering ferries for both Stena Line and other operators around the world, including in Canada,” said Per Westling, the Managing Director of Stena RoRo, in a testimonial for BC Ferries.

“We continue to partner with this shipyard because they have the scale, technical expertise, and consistent ability to deliver complex passenger and vehicle vessels safely, on time, and to the highest quality standards.”

BC Ferries further noted that during the forthcoming construction process, the ferry corporation will have a full-time professional team based in Weihai to monitor the entire shipbuilding process, including the activities of subcontractors and suppliers. To help protect the ferry corporation, the payments to CMI will be made in various instalments, based on the progress, quality, and full delivery, and the contract includes fixed-price terms and refund guarantees.

“I have shared these concerns with BC Ferries,” says B.C. transportation minister

While BC Ferries cites cost, capacity, and delivery timelines as the drivers of its decision — focusing on improving services without putting even greater pressure on fare increases to cover the cost — the optics of relying on China for core public assets are proving politically controversial. The move to award the ferry corporation’s largest-ever contract to a state-owned Chinese shipyard is drawing political and public scrutiny due to concerns over national security, economic sovereignty, and geopolitical optics.

Critics argue that entrusting a foreign government-owned entity — especially one from China, amid continued strained Canada–China relations — with the construction of critical transportation infrastructure could introduce risks ranging from supply chain dependencies to potential cybersecurity vulnerabilities.

Some concerns have also been raised about the potential risks to BC Ferries, specifically regarding how shipbuilding in China could be disrupted by a possible China–Taiwan conflict, amid a growing international consensus that military confrontation later this decade is increasingly plausible.

Additionally, the move raises questions about a publicly-supported entity supporting a Chinese state enterprise, rather than fostering Canadian or allied shipbuilding capacity. The move also contradicts recent calls from the provincial and federal governments to “Buy Canada” amid growing trade tensions with the United States and the increasingly unstable global economic climate.

There are also broader ethical considerations, given China’s human rights record and concerns over fair labour and environmental practices in state-controlled industries.

The decision has drawn widespread criticism across the political spectrum.

When asked to comment by Daily Hive Urbanized, B.C. Minister of Transportation and Transit Mike Farnworth said he is disappointed in the contract award to CMI Weihai, but distanced the provincial government from the decision as the ferry corporation is an independent private company.

“BC Ferries is an independent company responsible for its own operational decisions. While BC Ferries has made its decision to purchase new vessels offshore, I am disappointed more involvement from Canadian shipyards was not part of the contract. That said, the four new vessels are clearly needed, and this contract will allow them to be in service more quickly and affordably than other shipyards could have delivered. They will increase BC Ferries reliability on major routes,” said Farnworth.

“I do have concerns around procuring services from any country that is actively harming Canada’s economy through unfair tariffs or other protectionist trade practices. I have shared these concerns with BC Ferries.”

Daily Hive Urbanized also asked the Minister whether the provincial government provided any funding to help cover the cost of the new major vessels, and whether it supports the independent BC Ferries commissioner’s March 2025 decision to approve an order of four new major vessels — rather than the five ships requested by the ferry corporation to further enhance capacity, reliability, and redundancy, and to capitalize on lower construction costs through economies of scale.

“We understand how vital a safe, efficient, and affordable ferry service is for coastal British Columbia. Like other transportation services, BC Ferries is experiencing rising costs and needs to factor that into its plans moving forward. Our government has demonstrated unprecedented support for people and coastal communities who rely on the ferry service,” Farnworth told Daily Hive Urbanized.

“The BC Ferries Commissioner serves an important role of taking a critical look at BC Ferries requests, their ability to cover costs, and the impact on the sailing public. BC Ferries isn’t a Crown corporation. They are independent and the Commissioner is also independent. That said, we agree that we need to ensure BC Ferries’ capital planning will continue to best serve people on the coast now and for years to come.”

It is also worth noting that for the past quarter century, BC Ferries has operated as a private company — albeit wholly owned by the provincial government, which remains its sole shareholder — since it ceased functioning as a provincial Crown corporation. Previously, under former Premier John Horgan’s leadership, the BC NDP-led provincial government had also vowed to boost B.C.’s shipbuilding industry through strategies such as sending BC Ferries shipbuilding work their way, and also changed the leadership of the ferry corporation.

“Stop this deal before it’s too late,” says BC Conservatives’ transportation critic

The decision was particularly criticized by the Conservative Party of BC, which asserts it is within the provincial government’s powers to direct BC Ferries to cancel the contract.

“Premier Eby put on a big show of not stopping in China on his trade mission to Asia. Then the NDP sends billions of dollars to a state-owned shipyard in China,” said Harman Bhangu, MLA for Langley-Abbotsford and the Conservative Official Opposition Critic for Transportation and BC Ferries, in a statement.

“The government appoints most of the BC Ferries board, including the board chair, who is a former NDP cabinet minister. This deal is fully within the government’s control. Transportation Minister Mike Farnworth needs tell his old friend Joy MacPhail to stop this deal before it’s too late,” he continued, charging that MacPhail, currently the chair of BC Ferries’ board of directors, was previously the Minister in charge of BC Ferries during the fast ferries controversy.

Bhangu argued that amid ongoing trade tensions with China — including tariffs imposed on B.C. seafood since March 2025, a retaliatory measure against Canada’s tariffs on some Chinese good — it makes little sense to award a shipbuilding contract of this scale to China. But currently, there are no tariffs for the import of such vessels into Canada.

“China’s tariffs are putting B.C. jobs at risk, and the answer from BC Ferries is to hand China the biggest ferry contract in a generation,” said Bhangu.

According to Bhangu, CMI also maintains close ties to China’s military.

There have also been numerous international media reports highlighting China’s rapid expansion of its domestic shipbuilding capacity — including the absorption of private contracts — as part of efforts to bolster naval shipbuilding infrastructure in preparation for a potential invasion of Taiwan.

Bhangu cited a report from the Canadian Communications Security Establishment, published shortly after the October 2024 provincial election, which stated that Chinese state-sponsored actors routinely conduct cyber espionage targeting federal, provincial, territorial, municipal, and Indigenous government networks in Canada.

“As recently as last October, the federal government called China’s military a threat to our province’s communication networks, including provincial agencies such as BC Ferries. I wonder what the federal government has to say about this new deal,” he said.

The BC Conservatives are calling on Prime Minister Mark Carney’s federal government to conduct a national security review of BC Ferries’ contract if the provincial government does not swiftly move to cancel the deal.

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