Federal infrastructure bank to provide BC Ferries with $1-billion loan toward China-built ships
These four ships will be BC Ferries’ new largest ships, slightly exceeding the size of the Spirit of British Columbia and Spirit of Vancouver Island. All four ships are scheduled for delivery between 2029 and 2031, with the vessels dedicated to running on the busy routes linking Metro Vancouver with Vancouver Island and the Sunshine Coast.
Moreover, these new ships will replace aging vessels that are now between five and six decades old and are facing growing reliability issues. These new-generation ships will also have a substantially larger capacity, accommodating up to 2,100 passengers and 360 vehicles — representing an average capacity increase of 52 per cent and 24 per cent, respectively, compared to the ships entering retirement.
“The CIB’s partnership with BC Ferries further helps to improve one of the world’s largest ferry networks,” said Ehren Cory, CEO of Canada Infrastructure Bank, in a statement today.
“In addition to their environmental benefits, the new larger vessels will have the capacity to transport more people and vehicles on some of its marquee routes, extending the network’s capacity. This CIB financing will enable residents and visitors to have earlier access to more reliable, environmentally conscious and cost-effective service.”
This repayable loan from the federal infrastructure bank with lower interest rates than typical market rates will help reduce pressure on future fare increases to help cover BC Ferries’ major capital costs. In November 2024, BC Ferries indicated that its growing capital and operating costs would equate to a steep 30 per cent fare hike in 2028.
According to Nicolas Jimenez, the President and CEO of BC Ferries, the loan of CIB will avoid about $650 million in debt interest charges over the life of repaying such a loan, compared to market interest rates.
“This investment is about more than replacing aging vessels — it’s about ensuring that our coastal ferry system will have the capacity to meet the needs of the people, goods, and communities that depend on it,” said Jimenez.
“We believe that this partnership with the CIB will make a big impact in avoiding additional pressures on fare increases for our customers compared with borrowing from private markets… It’s a smart, long-term partnership that advances our operational, environmental, and financial goals.”
Preliminary conceptual artistic rendering of the New Major Vessels. (BC Ferries)
The loan of up to $1 billion is in addition to CIB’s May 2024 announcement of providing BC Ferries with a loan of up to $75 million to support the cost of buying four new Island Class battery-electric vessels and the installation of the associated charging infrastructure for such ships. These small ships serving minor routes are currently being built by the Netherlands-based Damen Shipyards Group — the same shipyard that built the original Island Class vessels about five years ago — with delivery scheduled for 2027.
The contracted cost of building the new major vessels and Island Class ships has not been released to protect BC Ferries’ price competitiveness for future vessel procurements.
But ever since BC Ferries announced its decision to award the historic new major vessels contract to the shipyard owned by the Government of the People’s Republic of China, there has been immense public and media criticism of the decision.
This includes continued calls from the opposition Conservative Party of BC calling on the BC NDP-led provincial government to intervene in the ferry corporation’s decision and cancel the contract, as well as a condemnation from federal Minister of Transport and Internal Trade Chrystia Freeland over national security and trade implications.
“This deal is an insult to British Columbia workers and a direct threat to Canadian economic interests. Minister Freeland herself expressed serious concerns about choosing a Chinese state-owned shipyard. It’s time for clarity: will the federal government continue to finance the outsourcing of Canadian shipbuilding jobs, effectively subsidizing Premier Eby’s betrayal of Canadian workers, values, security, and industry?” said Harman Bhangu, the MLA for Langley-Abbotsford and the B.C. Conservatives’ Official Opposition Critic for Transportation, in a statement today, reacting to CIB’s loan announcement.
“We demand immediate transparency and urge Minister Freeland to commit to renegotiating or withdrawing this funding to ensure it supports Canadian industry, not foreign competitors.”
However, Premier David Eby has maintained that while he is disappointed by the decision, he will not intervene as the provincially owned private ferry company is an entity independent of government, and that there is a real urgency to improve the capacity and reliability of the services. Moreover, the premier emphasized that cancelling the contract and restarting the procurement process will not only create delays in improving the services, but also lead to significantly higher costs.
The premier has instead suggested that he will try to work with Prime Minister Mark Carney to develop a strategy to ensure future additional orders for new major vessels in the 2030s are built at B.C. shipyards to support the local industry, economy, and jobs. BC Ferries has long maintained that domestically built ships would cost substantially more and require subsidies from the provincial and federal governments.
For the current order, domestic shipyards not only did not submit a bid — continuing a decades long practice of generally not participating in BC Ferries’ procurement process — but some also could not meet the ferry corporation’s delivery schedule due in large part to their existing commitments with the federal government in fulfilling the National Shipbuilding Strategy’s orders of new combat and non-combat ships for the Royal Canadian Navy and Canadian Coast Guard.
Preliminary conceptual design of BC Ferries’ new major vessels. (BC Ferries)
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