Transport Committee on Feb. 25th, 2026

[Will Greaves, Liberal, Victoria, BC]

Thank you, Mr. Chair.

Good afternoon to our witnesses.

Minister, thank you so much for joining us today, sir.

As the member of Parliament for Victoria, as you know, I represent constituents who rely on BC Ferries. This is critical infrastructure in our part of the country. It's necessary for daily life, for economic growth, for vitality and for all manner of services and connectivity throughout our province and, indeed, the entire west coast of Canada.

People in my community know first-hand that the aging of BC Ferries' fleet is creating real challenges and that it is a drag on our economic productivity and the diversification of our economy on the west coast. From our perspective, new ferries are necessary, and to be honest, they can't come quickly enough.

In this vein, knowing as we do that the shipyard in China that was selected by BC Ferries for the construction of these new vessels has also produced ferries in use by many of our allied countries—notably, France and Denmark, as well as others—I'm wondering whether we could clarify the record. I'll ask you a very direct question: Does Public Safety Canada have any reason to believe that this procurement of new vessels by BC Ferries poses a national security risk for this country?

[Gary Anandasangaree, Liberal, Scarborough—Guildwood—Rouge Park, ON]

Thank you for the question.

Let me just comment, at the outset, on the need for increased ferry services in British Columbia. I've tried to go to Victoria and Nanaimo, from Vancouver, on a number of occasions, and I've sometimes had difficulty attaining a ferry in a timely manner. Other modes of transportation, as you know, are weather-dependent in many cases, and we often find ourselves washed out and not able to travel. I fully recognize the needs of your community, of British Columbians, as well as of those in Victoria, Nanaimo and other major areas where these ferries will be utilized.

Having said that, I think it's appropriate for our national security officials to answer the question vis-à-vis the vessel itself.

We'll start with Ms. Lloyd and then go to Mr. Bilodeau.

[Vanessa Lloyd, Deputy Director, Canadian Security Intelligence Service]

Thank you very much for the question.

Through the chair, perhaps I'll start by offering to reassure the committee members that the national security community writ large, including CSIS, takes the ongoing investigation, monitoring and, when appropriate, mitigation of threats seriously every single day.

As the minister said, in this case, the procurement of the vessels was not subject to a review. I think the committee would understand that, given the concerns raised by the former Minister of Transport that there could be national security concerns, we are alert to that potential.

I can explain to the committee what we do in those cases. We make sure to engage with our stakeholders at the provincial level and at all levels of government, as well as with industry partners. This is to make sure, going forward in the building and engagement under this contract, that those entities have the opportunity to engage—for example, with the Canadian Security Intelligence Service—and to report any concerns they have.

I will also highlight, as the minister mentioned, connected vehicles. These ferries are not connected vehicles, so some of the concerns the committee might have with respect to data sovereignty or other concerns around EVs, in my current understanding, don't apply in this case—although I would defer to Transport Canada to speak specifically to the technology in these particular ferries.

[Richard Bilodeau, Senior Assistant Deputy Minister, National and Cybersecurity Branch, Department of Public Safety and Emergency Preparedness]

Thank you very much, Chair.

One thing I will add, just in terms of the tool kit, is about a bill that's before Parliament and in committee right now, Bill C-8, which contains some provisions in part 2 that would address critical cyber systems in federally regulated sectors—transport being one of them. This will increase the protections in place for that and other sectors as well, such as energy, telecommunications and finance. Those important tools are being studied right now and will be relevant to the transportation sector.

[Will Greaves, Liberal, Victoria, BC]

Thank you very much for those responses, Minister and officials.

Minister, you stated in your opening remarks that Public Safety Canada does not review provincial procurement decisions. I'm wondering whether you could tell us this: From the perspective of your department and the public servants who work in service of our country, would it be feasible and legal for the federal government to intrude on provincial jurisdiction by having that kind of involvement in what is ultimately, under our federal system, provincial decision-making?

[Gary Anandasangaree, Liberal, Scarborough—Guildwood—Rouge Park, ON]

Right now, the mandate to undertake such reviews is within the Investment Canada Act. This is an area in which we routinely review the circumstances of each transaction and comment on it.

It is essentially led by Industry Canada, but Public Safety has a very important role. If there are security concerns, we can extend the time of the reviews. We can come back with a fulsome response that will enable the government to make a decision accordingly: to block a transaction, to ask for a wind-down of an entity. A range of options are available, including mitigation, which happens in many cases, when we try to mitigate any impacts on national security if there are reasons to believe that there could be some opening. We attempt to mitigate cases where we can.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Minister, and thank you, Mr. Greaves.

Mr. Barsalou‑Duval, you have the floor for six minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

Thank you, Minister Anandasangaree, for joining us.

I would like some clarification.

You told us that no security review was carried out in connection with the contract awarded to BC Ferries. I understand that BC Ferries is a British Columbia entity. However, the loan wasn't provided by a British Columbia entity. The Canada Infrastructure Bank, or CIB, is a federal institution. Loans totalling close to $1 billion were provided.

Is there no national security review process for investment decisions made by the Canada Infrastructure Bank?

[Gary Anandasangaree, Liberal, Scarborough—Guildwood—Rouge Park, ON]

Thank you for the question, Mr. Barsalou‑Duval.

Let me just say that the Investment Canada Act is the vehicle by which we can review transactions that are of concern. They are mandated; they're very strict in scope, and this is a referral that we get from Industry Canada.

The Infrastructure Bank is an arm's-length entity of the government. There is no direct link between the Infrastructure Bank and Canadian review of procurement. It is there in order to leverage, and it allows jurisdictions such as provinces and territories, as well as municipalities, to leverage their dollars.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Okay. I understand.

So you're more or less confirming what I said in my question. In other words, your department doesn't carry out a security review of investment decisions made by the Canada Infrastructure Bank. Even if it decides to invest, for example, in an economic partnership with Iran or North Korea, the CIB would be free to do so.

Is that right?

I find this quite surprising, given that the investment was made with federal money. This entity falls under federal jurisdiction. I even think that a former head of the CIB is very close to the Prime Minister. We're told that the CIB is an independent body. However, we sometimes see surprisingly close relationships, especially when we see that the former head of the CIB is now in the Prime Minister's Office.

Don't you find this surprising?

[Gary Anandasangaree, Liberal, Scarborough—Guildwood—Rouge Park, ON]

I would correct you with respect to such countries as North Korea and China. They're not countries that we do business with. We don't have diplomatic relations with them. They're not necessarily part of our trading bloc, and there's no reliance on trade with either one of those countries. Frankly, those scenarios are absurd, but I would suggest—

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

I'm asking because you told me that no security review is carried out when the bank makes investments. You said that this wouldn't happen. This may be the case, but there's nothing to prevent it from happening.

Honestly, I don't think that we should overlook the investments in China and economic relations with that country either.

I'm not saying that we shouldn't have them. However, I'm concerned that no security review process is in place for decisions made by crown corporations, which fall directly under federal government jurisdiction.

Don't you find that worrying?

[Gary Anandasangaree, Liberal, Scarborough—Guildwood—Rouge Park, ON]

We go back to the procurement itself, which is undertaken by the province. I'm going to use the example of Quebec as illustrative. If, for example, we undertake a review of a procurement that's undertaken by the Province of Quebec or the Government of Quebec, I think there would be a bit of outrage. We are at different levels of government, and in this instance—

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

I didn't mean for you to interfere in provincial jurisdictions. By saying that, you know perfectly well that you're provoking us, to some extent. I would never want to see federal institutions blocking a transaction with Quebec or a Quebec government investment.

That said, we're talking about Canada Infrastructure Bank investments. This isn't a British Columbia investment. I understand that this is the basic idea. I don't see how you could say no to the Canada Infrastructure Bank. That wouldn't necessarily or automatically compromise the transaction. We could find other financial partners in Quebec.

It seems logical that it should work this way. I find the situation worrying.

Was either your department or your office told, at any point, that the CIB planned to make this investment?

Were you ever informed in any way?

[Gary Anandasangaree, Liberal, Scarborough—Guildwood—Rouge Park, ON]

Well, the CIB's decisions are independent of government. The CIB reports through the government, but it is, by all means, independent—like the Business Development Bank of Canada, for example. It's an independent Crown corporation.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

When were you informed of this?

Did anyone inform you of this at any point?

Did you hear about it in the media? Did you find out from the committee here?

[Gary Anandasangaree, Liberal, Scarborough—Guildwood—Rouge Park, ON]

Let me ask Mr. Bilodeau to answer that question.

[Richard Bilodeau]

The department was made aware sometime towards the end of April or in early May that BC Ferries was going to select, or had selected, a Chinese—

We learned in late April, early May, that the entity in British Columbia had decided to purchase these vessels. In May and June, we had discussions, as you could see from the documents. I can't say when the minister was informed. However, we were informed at that point, in the department.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Barsalou‑Duval.

Thank you very much, Minister.

Next we'll go to Mr. Muys.

Mr. Muys, the floor is yours. You have five minutes, sir.

[Dan Muys, Conservative, Flamborough—Glanbrook—Brant North, ON]

Thank you.

Minister, to me it seems like a bit of a cop-out to say that this is a provincial procurement decision. I mean, obviously, these are not just hulls. These are floating IT systems with all sorts of capabilities. Is that not a national security concern?

[Gary Anandasangaree, Liberal, Scarborough—Guildwood—Rouge Park, ON]

Essentially, this was a decision made by the Government of British Columbia. It is able to make these decisions. When vehicles or vessels come into Canada, they need to be in compliance with Canadian laws. This is expected of anyone bringing transportation vehicles—of all sorts—into Canada. There are regulations in Canada that dictate a range of issues. That is what our regulatory process does.

In terms of a review from a security perspective, it's not something that is required or routine. In my opinion, this was somewhat of a routine exercise by the Government of British Columbia.

[Dan Muys, Conservative, Flamborough—Glanbrook—Brant North, ON]

Even though this is a Chinese state-owned corporation and we know there have been issues with Chinese foreign interference, not just politically but economically, that didn't raise any alarm bells at Public Safety Canada.

[Gary Anandasangaree, Liberal, Scarborough—Guildwood—Rouge Park, ON]

Well, I would say that the matter came into the public domain sometime in late June. I think I took the office sometime in mid-May. I was made aware of it. It was after the fact; the procurement was completed. In any event, there was no mechanism for us to undertake such a review. Again, it is the prerogative of the Government of British Columbia to undertake a procurement of this sort.

[Dan Muys, Conservative, Flamborough—Glanbrook—Brant North, ON]

There's no mechanism for Public Safety Canada to undertake a review in this circumstance. Okay.

If we accept that—and I don't think that we do—is there any effort to change the procedures? I mean, this is obviously of concern. We're bringing this to your attention now. You've now been the minister for nine months. Is this something you're going to look at going forward?