Transport Committee on Aug. 1st, 2025

[The Chair, Liberal, Peter Schiefke]

I call this meeting to order.

Welcome to meeting number five of the Standing Committee on Transport, Infrastructure and Communities.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, July 7, 2025, the committee is commencing its study of the Canada Infrastructure Bank's financing of new vessels for BC Ferries.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members may attend in person in the room and remotely by using the Zoom application.

Before we continue, I would like to ask all in-person participants to consult the guidelines written on the cards on the table. These measures are in place to help prevent audio feedback incidents and to protect, of course, the health and safety of all participants, including our interpreters. You will also notice a QR code on the card, which links to a short awareness video.

I'd like to make a few comments before we begin for the benefit of witnesses and members. Please wait until I recognize you by name before speaking. For those participating by video conference, please click on the microphone icon to activate your mic. Please mute yourself when you are not speaking. For those on Zoom, at the bottom of your screen you can select the appropriate channel for interpretation—floor, English or French. For those in the room, you can use the earpiece and select the desired channel.

As a reminder, all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. The clerk and I will manage the speaking order as best we can. We appreciate your patience and understanding in this regard.

Before we welcome our first witness today, I would like to express, on behalf of all members, that our thoughts are with all Canadians affected by the ongoing forest fires across the country, and express our appreciation to all the first responders and firefighters who are doing their best to manage these.

Appearing before us, colleagues, for the first hour of today's five-hour meeting is the Honourable Chrystia Freeland, Minister of Transport and Internal Trade.

[Gord Johns, NDP, Courtenay—Alberni, BC]

I have a point of order, Mr. Chair.

[The Chair, Liberal, Peter Schiefke]

Mr. Johns is joining us today.

The floor is yours, sir.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Thank you so much, Mr. Chair. I just wanted to call for a point of order. I'm seeking unanimous consent.

I am one of seven Vancouver Island MPs. As you know, BC Ferries is critical to the lifeline of Vancouver Islanders.

Almost 25% of Vancouver Islanders voted New Democrat. As a New Democrat, I'm hoping that this committee will support allowing me two and a half minutes of questioning at the end of each round due to the impact this has on my Vancouver Island constituents. As someone who's met with industry and as someone who's met with BC Ferries, ENGOs, first nations, higher learning institutions, and labour, I could offer a lot in terms of my questions that would support this committee, Vancouver Islanders, British Columbians and Canadians.

I hope this committee will support my request.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Johns.

I was going to ask for unanimous consent, but I see that your hand is up, Mr. Albas.

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

Mr. Chair, if Mr. Johns is given time, it should be at the expense of whichever party gives it. We have plenty of questions, and we're not prepared to share our time.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Albas.

Mr. Barsalou‑Duval, please go ahead.

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

Thank you, Mr. Chair.

If any committee members wish to share a portion of their time with the NDP, I have no problem with that. However, since I don't have much speaking time of my own, I will not be sharing my time.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Barsalou‑Duval.

Mr. Lauzon, you have the floor.

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

I see no problem in granting the NDP representative some time to ask questions.

[The Chair, Liberal, Peter Schiefke]

Are you willing to give up some of your speaking time?

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

No. I suggest that the committee allow the NDP to speak or that it add on enough time to give the NDP two and a half minutes of speaking time.

[The Chair, Liberal, Peter Schiefke]

Unfortunately, Mr. Johns, I don't have the unanimous consent of the committee to provide you with that speaking time, and I don't have any members who are themselves coming forward to provide you with their time.

Unfortunately, you will not have an opportunity to ask questions today, sir.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Thank you for giving me the opportunity.

I do believe that this is an affront to democracy. It hurts Vancouver Islanders, who would expect that we'd be given a chance of two and a half minutes to question each of the panellists and bring some very important insight. As the only MP who's taken this crusade over the last month of meeting with the stakeholders, I think I have a lot to offer. I hope members will cede some of their time in consideration of the people of my riding and the benefit this would bring to the transport committee.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Johns.

I'll return to welcoming our first witness for today. Our guest is the Honourable Chrystia Freeland, Minister of Transport and Internal Trade. Joining her from the Department of Transport are Arun Thangaraj, deputy minister, and Stephanie Hébert, assistant deputy minister of programs.

Welcome to all three of you. Thank you for taking the time to appear today.

Minister, it's always a pleasure to have you here.

You have five minutes for your opening statement. You now have the floor.

[Chrystia Freeland, Liberal, Minister of Transport and Internal Trade]

Thank you very much, Chair—Peter—and thank you to everyone who is here working so hard.

I also really want to thank Arun Thangaraj, the deputy minister of transport, and Stephanie Hébert, assistant deputy minister of transport. Thank you for all your hard work and for being here with me today.

I also want to join you, Mr. Chair, in recognizing that this is a time when wildfires are raging in many parts of our country. I know that it touches some of the MPs here very close to home. It's a good opportunity to thank all the first responders and to let Canadians know that on this issue, certainly, we're all in it together to support them.

As we all know, BC Ferries is an independent, privately operated organization regulated by the Province of B.C. This is not an entity under the authority of Transport Canada. I share the committee's disappointment with this procurement.

This decision comes at a time when the Government of Canada is making record investments in rebuilding Canada's marine sector. The National Shipbuilding Strategy has created and maintains over 20,000 jobs annually, while contributing over $2.3 billion a year to the GDP, supplying critical resources to the Royal Canadian Navy and the Canadian Coast Guard, and strengthening national sovereignty and economic resilience.

In line with a 1977 agreement, Transport Canada does provide funds, strictly for operations, to the Province of B.C. This includes nearly $38 million in federal support that will go to the province in the fiscal year 2025-26. The province uses that funding to provide operating support for ferry services.

I am troubled by the procurement. I strongly believe in supporting Canada's shipbuilding capacity, supporting middle-class jobs and supporting our economy. We all recognize that this is a critical moment, particularly to support our steel and aluminum sectors, given the tariffs that Canada is facing.

I've asked every organization under Transport Canada's authority, including ports, airports and marine services, to give preference to Canadian products whenever possible when they make major purchases, and that includes Canadian steel and aluminum. When Canadian options are unavailable, our next preference is to buy from countries that have signed reciprocal procurement-related trade agreements with Canada, to make sure that our investments support fair and open trade practices. Last June, I sent out 71 letters containing that instruction.

In line with the need now to support the Canadian economy, I have directed all organizations under the Transport Canada umbrella, including ports, airports and marine services, to prioritize Canadian content in their major procurements, particularly Canadian steel, aluminum and lumber wherever feasible. When Canadian options are not available, our next preference is to buy from countries with whom we have reciprocal procurement agreements in our trade deals, ensuring that our investments support fair, open and rules-based trade. In June I sent out 71 letters with this instruction.

I have been an advocate of reciprocal procurement for Canada for some time. I first put forward the idea as finance minister in the 2021 budget, and I advanced it further in the 2023 budget and 2023 fall economic statement. In fact, in 2023 the Department of Finance published a policy statement outlining a plan to go forward with reciprocal procurement. This June the federal government put in place a reciprocal procurement policy.

I'm also glad to announce today that Transport Canada will be convening a meeting with the provinces and territories as well as ferry owners, operators, shipyards, labour representatives and the steel and aluminum industry. I spoke this morning about the meeting with the CEO of Seaspan. This meeting will be a chance for us to work together—the federal government, the provinces, shipbuilders, labour, and steel and aluminum—to talk about how we can buy Canadian. I will be convening a similar meeting, including the steel sector, for the rail industry and all rail operators.

Right now I'm convening a meeting with the provinces and territories, along with ferry owners and operators, shipyards, representatives of labour and members of the steel, aluminum and softwood lumber industries. This meeting will allow us to work together on addressing Canada's ferry procurement challenges. I plan to hold a similar meeting with the rail industry as well.

I want to thank the deputy minister of transport for working hard with me to organize these meetings.

The response we've received from our provincial and territorial counterparts and from industry has been very positive. I think there's a lot of goodwill to do that.

Let me conclude by saying that I'm grateful for the work of the committee. I hope we can spend some time looking ahead to ways that we can support Canadian shipbuilders and Canadian steel and aluminum producers. That's something that I am certainly focused on.

I look forward to answering your questions.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Minister.

We begin our line of questioning today with Mr. Albas.

Mr. Albas, the floor is yours. You have six minutes, sir.

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

Thank you, Mr. Chair.

Thank you, Minister, and thank you, Deputy Ministers, for the work you do.

Minister, the ink isn't even dry on President Trump's latest executive order, basically targeting Canada for 35%. Our steel and aluminum workers are scared, yet here we have an opportunity to fund, here in Canada, the elbows-up and Canada-strong rhetoric that your government has been putting out. We can stop this loan by the Canada Infrastructure Bank, and we can go to the table with BC Ferries and plan to do it and support our steel and aluminum workers and shipbuilders here in this country.

Are you standing by the loan?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Thank you, Mr. Albas, for your question.

I want to start by saying that I know the wildfires are touching your constituency and that I support you and your constituents. The federal government is here to provide any support they need.

I totally agree with you that this is a moment of crisis for the Canadian steel and aluminum sectors and they need our government's support. They need our country's support. I was on the phone this morning with the CEO of one of our steel companies and was in touch with one of our union leaders. As well, I was talking to the CEO of Seaspan. My approach right now is to ensure that in the areas under my control, in the areas that Transport Canada has responsibility for, we are pushing for Canadian workers in the manufacturing sector and for the use of Canadian steel and aluminum. That's why I sent out 71 letters in June to all the agencies I'm responsible for. That's why I'm convening a meeting specifically ensuring that we are building ferries in Canada using Canadian steel, and it's why I will be convening a meeting to do the same thing with the rail sector.

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

Minister, it sounds like you're comfortable with the loan going out and supporting, effectively, the outsourcing of Canadian jobs, to subsidize them over in the People's Republic of China at a Chinese state-owned shipyard.

Speaking of letters, I have your letter here dated June 16, 2025. It says, “I am dismayed that BC Ferries would select a Chinese state-owned shipyard to build new ferries in the current geopolitical context, and I ask that you verify and confirm with utmost certainty that no federal funding will be diverted to support the acquisition of these new ferries.”

Did you know when you wrote this letter that the Canada Infrastructure Bank was going to be funding $1 billion of taxpayers' money to the acquisition of these vessels?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Let me first take issue, if I may, with your opening comment.

I am dismayed by this procurement. I have made that very, very clear. It's not just rhetoric. I have acted. I'm the transport minister. I was and am aware that money goes from Transport Canada in operating support for the operation of ferries in British Columbia. It was very important to me to make formally clear an insistence that none of that operating money be used for this procurement. I have received those assurances.

Second of all, as importantly, I am taking active steps to ensure that in going-forward purchases of anything Transport Canada has control over, we are putting a priority on Canadian manufacturing jobs, on Canadian steel and on Canadian aluminum. We are not just talking about it. We are actually working to do it. That is really important.

I have to say that I was very encouraged by the conversation I had today with Seaspan. They're excited to be part of this work.

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

Minister, I think any accountant will tell you that an operating budget will have a payment down of debt. BC Ferries will be using some of the federal monies it will have in its operating budget for servicing the debt to the Canada Infrastructure Bank. That's superfluous to this. You are the senior minister, between you and Minister Robertson. Are you going to say in cabinet that, number one, we should cancel this loan in favour of steel and aluminum and shipbuilding here in Canada—yes or no?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

I have been very clear in my testimony today before the committee, in the House of Commons and in all my opportunities to speak formally about this that I am disappointed by this procurement. In fact, I think there is widespread disappointment across Canada with this procurement. In the areas that I'm responsible for as transport minister, I am ensuring that our procurement is favouring Canadian manufacturers and favouring Canadian steel and Canadian aluminum. That's why I sent out 71 letters in June to the agencies under my authority, saying that this is what we'll be doing.

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

Minister, you have an opportunity to say no to this loan and to say yes to those conversations and put some heft behind it. It sounds to me like you're like a ship sailing at night and seeing another one sail by, except those are our jobs going to China, to a shipyard that's owned and managed by the state.

Minister, why aren't you saying, no, you won't support this loan? It's contrary to what the government's intentions are and what Canadians are asking for. Why are you picking the loan over your own letter?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

I've been in politics for 12 years now, and I've been compared to many different things, but I think it's the first time I've been compared to a ship. I've been compared to worse.

Let me just say, Mr. Albas, that I am disappointed by this procurement. In the areas under my control as transport minister, I can assure you that I am doing everything in my power to ensure that the agencies that Transport Canada is responsible for put a priority on Canadian manufacturing workers and Canadian steel and aluminum.

I want to add that it's not just about statements. We have to work together—industry, all levels of government and unions—to be sure that we have the capacity to use Canada's steel and aluminum. I am totally devoted to doing that.