Transport Committee on Aug. 1st, 2025

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Jimenez.

Thank you, Mr. Gunn.

Mr. Lauzon, you have the floor for five minutes.

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

Thank you, Mr. Chair.

Thank you for being here, Mr. Jimenez.

In one of your responses, you talked about the process dating back six, seven or eight years, meaning before the COVID‑19 pandemic. That surprises me. It seems like a long process. How could there have been more planning done to ensure the use of Canadian products or Canadian companies? Was this process already under way eight years ago, or did you just realize, during the bidding process, that Canadian companies couldn't bid?

[Nicolas Jimenez]

I can provide a little clarification.

The initial process was started in about 2018, and it shut down in 2020 when the pandemic hit. The company simply ran out of money to fund capital programs—ship, terminal or otherwise. It was restarted in late 2021, and we spent a number of years designing the ship that we would need to be part of an evaluation package. Then, again, the RFP began in probably late 2023, early 2024. I would say that it has been very planful, and it's been very thoughtfully organized and run.

I hope that answers the member's question.

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

Yes, that's a good answer.

I'm talking about all your preparatory work, including the plans and specifications, the application, the pre‑qualification, and so on. Was all the preparatory work carried out by Canadian or Quebec workers, by local workers?

[Nicolas Jimenez]

I would say yes. It was done by internal teams at BC Ferries. We essentially manage and organize procurements ourselves. We obviously have external assistance through brokers and whatnot, but the vast majority of the work to think about, run and execute the procurement is done by local teams—a small number of people, but local folks to BC Ferries.

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

I gather that the Chinese company was never involved in drawing up the plans and specifications for the required vessel. You issued a call for bids with only Canadian documents.

[Nicolas Jimenez]

I want to make sure I understand the question.

The materials that constitute the procurement process are built, constructed and designed, obviously, by BC Ferries, and they're put out into the market for anyone to review and to decide to make a proposal on. Whether you're from Europe, South America or Asia, you're looking at the same set of documents that are prepared in British Columbia at BC Ferries.

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

Using these documents, tell me about the pre‑qualification. You talked about a key step. You included planning time, price and construction standards.

Explain how you proceeded until you learned that Canadian companies couldn't submit bids.

[Nicolas Jimenez]

Sure. I think I'm just going to clarify something.

There are three stages, I said. There's an expression of interest, there's pre-qualification, and then there's the actual bid process itself.

The pre-qualification, which I think is what the member is asking, essentially sets out a number of minimum criteria. You have to have built a ship of a certain size in the last number of years. You have to have certain standards. They're very high-level criteria. They're not the criteria that we would use in the ultimate evaluation of a bid. Separate and apart, once those shipyards have met those minimum criteria, such as to say that they're financially solvent, have built a ship in the last 10 years, etc., it's at that point that we say, “Okay, these yards are interested.” They say, “When you are ready to provide a bid package to us, please let us know.” At that point, in the third stage of our process, when we have the design ready and the form of the contract ready, we put it out in a formal RFP process. It's at this point that the yards make an independent decision on whether they will submit a bid.

Hopefully that answers the question.

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

Thank you very much.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Lauzon.

Thank you once again, Mr. Jimenez.

We have another lightning round of two minutes for Mr. Albas followed by two minutes for Mr. Kelloway.

Mr. Albas, the floor is yours, sir.

[Dan Albas, Conservative, Okanagan Lake West—South Kelowna, BC]

Thank you, Mr. Chair.

I just have a quick question. You said you'd save $650 million if BC Ferries were to go to another lender, but it sounds like you went only to the Canada Infrastructure Bank.

What do you base that on? Are you basing it on the loan you got, say, at prime?

If you went to only one source for investment, you weren't testing the market.

[Nicolas Jimenez]

I'm going to clarify that there will be multiple sources of funding for this program. The CIB is one portion of the funds we're going to access in order to pay for this particular investment. We will also be issuing bonds and—

[Dan Albas, Conservative, Okanagan Lake West—South Kelowna, BC]

Where did you get that figure of $650 million if the CIB loan was cancelled?

[Nicolas Jimenez]

The number is actually up to $650 million. What this represents is the difference in the interest charges that would otherwise be applied in—

[Dan Albas, Conservative, Okanagan Lake West—South Kelowna, BC]

However, you didn't go to the market to compare that. Is this correct?

[Nicolas Jimenez]

I want to clarify this. I said a couple of seconds ago that we will be going to the market to issue bonds and—

[Dan Albas, Conservative, Okanagan Lake West—South Kelowna, BC]

Then it could be considerably less. That is what you're saying, because it's “up to”. That's what it means.

Is that right?

[Nicolas Jimenez]

That's correct.

[Dan Albas, Conservative, Okanagan Lake West—South Kelowna, BC]

Okay.

You also said the closest bid was up to $1.2 billion or more.

Is that correct?

[Nicolas Jimenez]

I said that if we'd gone with a yard that isn't in China, we would have paid up to $1.2 billion for—

[Dan Albas, Conservative, Okanagan Lake West—South Kelowna, BC]

Regarding the one you settled on with the PRC, what was the difference between that and the next closest bid?

[Nicolas Jimenez]

Those are the kinds of numbers we're not going to be able to provide inside of the requirements we've set for ourselves and inside—

[Dan Albas, Conservative, Okanagan Lake West—South Kelowna, BC]

Is it $200 million?

[Nicolas Jimenez]

It's around commercial sensitivity and—