Evidence of meeting #8 for Transport, Infrastructure and Communities in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was vessels.
A recording is available from Parliament.
Liberal
The Chair Liberal Peter Schiefke
Thank you very much, Mr. Warren. Perhaps another member will provide you with an opportunity to finish your response.
Thank you very much, Mr. Muys.
Next we'll go to Mr. Greaves.
Mr. Greaves, the floors is your. You have five minutes, sir.
Liberal
Will Greaves Liberal Victoria, BC
Thank you, Mr. Chair.
Good morning to all of the witnesses. Thank you for joining us. As a member from British Columbia—I represent Victoria—I very much appreciate the time of day that you've joined us out there, in Pacific time.
My question is for Mr. McNeely.
As a member of this committee who regularly rides the ferries and whose constituents rely upon BC Ferries every day, I'm wondering if you could speak to the perspective that you and your members have on the current state of ferry service in B.C. As you mentioned, it's your team that sails and maintains these ferries. Can you speak to how well ferry service levels are currently serving coastal communities in B.C.?
President, BC Ferry and Marine Workers' Union
The number of ferries that have been serving the coast of B.C. hasn't changed in decades, while the population has grown. That means that the capacity on those vessels has been getting more and more dramatic or full, if you want to put it that way. The system hasn't been planned for the future in the way that it probably should have been. The population increase hasn't been a surprise, and vessels get older every year. This isn't a crisis of vessel age; it's a shortfall with regard to planning. To suggest that we are now at a crisis point is only highlighting the failure of the leadership of the quasi private-public BC Ferries model. It has been more than 20 years since it has been a public-private process, and it hasn't benefited British Columbians in the way that it should. That doesn't mean that we should quickly run away from domestic production in favour of quick and cheap.
Liberal
Will Greaves Liberal Victoria, BC
Thank you for that answer.
Would you then agree with the basic proposition that BC Ferries does, in fact, need to procure new vessels and expand the size of its fleet in order to maintain and improve the quality of ferry service in British Columbia?
President, BC Ferry and Marine Workers' Union
Yes. There needs to be investment in ferries in Canada, and that includes the west coast and BC Ferries.
Liberal
Will Greaves Liberal Victoria, BC
Thank you.
Some members of this committee have called for the Canada Infrastructure Bank to reverse the loan that was offered to BC Ferries to support this procurement. This is something that has been discussed already by other witnesses, and I'm sure we'll revisit it again.
From your perspective and from that of your members, can you speak to what impact the cancellation of the existing contract would have on your members and on BC Ferries' capacity to meet its customers' needs in the medium term?
President, BC Ferry and Marine Workers' Union
What I hear from my members is that we want to see public money not being sent overseas when it could help rebuild a Canadian industry. If this was really about urgency, BC Ferries would have acted when this process began in 2017.
Our ask, again, is simple. If taxpayers are paying for it, the benefits should stay here. Good jobs, technical skills and local supply chains will deliver parts quickly and more effectively. This means that, in the long term, there will be a better service for British Columbians, and repairs on ships and ship consistency will be better over the duration. We're looking at vessels that have been running for, right now, 40 to 60 years in the water. Those are British Columbia-made vessels. If we want vessels that are going to last a long time, we would continue to build them in British Columbia and in Canada.
Liberal
Will Greaves Liberal Victoria, BC
Thank you for that.
Let's talk about Canadian shipbuilding for a moment. I think everybody on this committee certainly agrees that we would like to see vessels built in Canada and Canadian public money going towards supporting the Canadian jobs that would benefit from those investments being made domestically.
Over the last 15 years, Canada's shipbuilding strategy has sent a significant amount of business to Canadian domestic shipyards. I'm wondering if you could speak to how that federal government support for the shipbuilding industry in Canada has affected the capacity for shipbuilding in British Columbia, and how your members and those you represent may have benefited from that federal support for the Canadian domestic shipbuilding industry.
President, BC Ferry and Marine Workers' Union
I will try not to speak too much about shipyards, since my members don't work at them. What I will say is that when we look back over the past couple of years, when Seaspan said they had the capacity and when Davie said they had the capacity, I think that's a testament to ongoing federal investment.
To continue with domestic production and domestic shipbuilding, there needs to be a plan in place. Continued lack of investment means the capacity is a challenge. There's a real opportunity to look at how we build ships in Canada and how to move forward in a way that works for all Canadians.
Liberal
The Chair Liberal Peter Schiefke
Thank you very much, Mr. Greaves.
Mr. Barsalou‑Duval for two and a half minutes.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
Thank you, Mr. Chair.
Gentlemen, this summer, the committee had the opportunity to meet with Ehren Cory, chief executive officer of the Canada Infrastructure Bank, about funding it allocated for the purchase of Chinese vessels. I asked him whether he had received guidelines from the government on the importance of buying locally. He actually manages $35 billion at the Canada Infrastructure Bank, which is a lot of money. He responded that, essentially, he hadn't, that it was business as usual and that nothing had changed in the last six months.
On the one hand, the bank didn't receive any guidelines; on the other, it didn't see the need to proactively change how it operates, despite the fact that the political planets had moved and, above all, despite the many announcements by the government according to which it intended to support local industries, particularly the steel sector, affected by U.S. tariffs.
In your view, do you think it's normal that the government didn't issue guidelines on this, and that none of the senior officials, who are quite well paid, thought of it? I'm convinced that Mr. Cory makes a good living. Shouldn't those managing public funds and making these kinds of decisions bear some responsibility?
My question goes to Mr. McNeely first, but Mr. Warren is welcome to respond as well if he likes.
National Director, United Steelworkers Union
I'll say this, because I know we're running out of time. BC Ferries is a problem. It's a disaster, but it's been years in the making—where it's always been the cheapest source to get the goods. There's a cost to Canadian autonomy and to Canadian security, and we're seeing it now as we're getting shut out of the U.S. market and we are scrambling in a lot of our sectors.
I'll send it over to Brother McNeely.
President, BC Ferry and Marine Workers' Union
Thank you.
Frankly, I think everyone here is surprised that there wasn't a buy local or buy Canadian directive. Yes, we do think that is a leadership responsibility. We have been clearly raising the alarm about offshore builds for years. Ship procurement isn't decided by unions. It's decided by BC Ferries, its board, and the government. That's where the money comes from. They control the timeline. They need to choose where the work goes. I'm a bit stunned that there wasn't a Canadian content requirement. We're here now because the people in charge didn't act when it mattered for Canadians.
Liberal
The Chair Liberal Peter Schiefke
Thank you very much, Mr. McNeely.
Thank you, Mr. Barsalou‑Duval.
Next, we'll go to Mr. Gunn.
The floor is yours. You have five minutes, sir.
Conservative
Aaron Gunn Conservative North Island—Powell River, BC
Thank you, Mr. Chair.
Mr. McNeely, do you think workers in the People's Republic of China make better workers than Canadians?
President, BC Ferry and Marine Workers' Union
Canadian workers, Canadian shipbuilders and mariners are some of the best in the world. I think if the ships are built in Canada, they would continue to be sailed by Canadians for decades.
Conservative
Aaron Gunn Conservative North Island—Powell River, BC
Do you think China can make higher-quality ships than we can here in Canada?
President, BC Ferry and Marine Workers' Union
I know that the steel we produce here in Canada is some of the highest quality in the world. I have no reason to believe that the shipyards wouldn't produce some of the highest-quality ships in the world for us to sail on and move millions of people safely on an annual basis.
Conservative
Aaron Gunn Conservative North Island—Powell River, BC
I want to ask you now the same question I asked the CEO of BC Ferries, which he struggled to answer.
Do you think the state-owned shipyards in China follow the same level of safety, labour and environmental standards as the shipyards here in Canada do?
President, BC Ferry and Marine Workers' Union
I will be more succinct than the CEO of BC Ferries—no.
Conservative
Aaron Gunn Conservative North Island—Powell River, BC
To follow up on that, why do you think, at the end of the day, this contract was awarded to a state-owned shipyard in China and not one here in Canada? What was the so-called competitive advantage in your opinion that the shipyard in China had?
President, BC Ferry and Marine Workers' Union
The competitive advantage that shipyard has is twofold. One, they have a country that has been investing in their domestic ship capacity through a hybrid civil-military process, meaning that shipyard is funded and the work there is done at a cut rate because their government invests in it. Also, their steel is heavily subsidized. That makes it more challenging on a cost basis. In Canada, we pay a bit more for what we get. The quality we get is much higher and will last forever, and that is something we can be proud of. We're looking at billions of dollars of potential knock-on impacts to the industry in British Columbia and Canada if we build large vessels here. Now we're looking at hundreds of millions of dollars over the lifetime of the vessel just for the repair and refit. That's the scraps, not the pie.
Conservative
Aaron Gunn Conservative North Island—Powell River, BC
I know Seaspan mentioned they would have liked to build the ships here, but they couldn't compete with the state-owned shipyard in China, which, I think, were paying their workers about seven times less. Is it essentially the case, in your view, that we are offshoring these critical shipbuilding jobs to an adversarial regime because they're willing to pay their workers less and have them work in harsher conditions?
President, BC Ferry and Marine Workers' Union
We've been offshoring shipbuilding for decades, unfortunately, through BC Ferries and others. We could have started building smaller vessels—medium, minor and intermediates—and then built toward large vessels. Over the last 20 years, that hasn't occurred. Now we're at an inflection point where I think the decision to go with a Chinese shipbuilder has highlighted that failure of leadership and of long-term planning.