Federal minister 'dismayed' by BC Ferries' decision to build ships in China | Daily Hive

Federal minister Chrystia Freeland 'dismayed' by BC Ferries' decision to build ships in China

Coastal Renaissance ship of BC Ferries. (AnnaC17/Shutterstock)

Federal Minister of Transport and Internal Trade Chrystia Freeland has issued a rare sharply worded formal letter to B.C. Transportation Minister Mike Farnworth, denouncing BC Ferries’ decision to award a major shipbuilding contract to a Chinese state-owned shipyard, citing serious concerns over national security, trade relations, and the use of taxpayer funds.

In the letter, dated June 16 and released to media yesterday evening, Freeland said she was filled with “consternation and disappointment” upon learning that BC Ferries had selected China Merchants Industry Weihai (CMI Weihai) to construct four new major ferries, which will be BC Ferries’ new largest vessels — operating on the busy routes linking Metro Vancouver with Vancouver Island and the Sunshine Coast.

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The decision comes at a time when Canada-China relations remain deeply strained — marked by what Freeland described as “unjustified” recent Chinese tariffs on key Canadian agricultural exports, and persistent concerns over cybersecurity threats and foreign influence.

“It is dismaying that BC Ferries would select a Chinese state-owned shipyard to build new ferries in the current geopolitical context,” wrote Freeland.

“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.”

Chrystia Freeland. (Drop of Light/Shutterstock)

She also questioned why the historic contract did not appear to include a requirement for Canadian content, especially in light of the extensive federal government support BC Ferries has received — including $308 million in pandemic-time operating budget relief, and nearly $38 million in continuing annual operating subsidies based on a 1977 agreement.

Freeland highlighted the $75-million Canada Infrastructure Bank loan to BC Ferries, approved in 2024, to help support the separate order for four new additional Island Class battery-electric ships serving minor routes and the installation of charging infrastructure. It should be noted that the contract for these small Island Class vessels was previously awarded to a European shipyard, with construction currently well underway and delivery of all vessels slated for 2027.

Construction on the exponentially larger new major vessels by the Chinese shipyard is scheduled to begin in 2026, with the first ship expected to be delivered in 2029. Subsequent vessels will follow at approximately six-month intervals, with the final ship slated for delivery in 2031.

bc ferries island class daymen shipyard may 2025 f1

BC Ferries’ seventh new Island Class vessel launched into the water at the Damen Galati Shipyard in Romania on May 22, 2025. (Damen Shipyards)

Conceptual artistic rendering of the New Major Vessels that will be built by CMI Weihai in China. (BC Ferries)

“There is significant investment being made to help rebuild Canada’s marine industry and support middle-class jobs,” Freeland stated.

“I am surprised that BC Ferries does not appear to have been mandated to require an appropriate level of Canadian content.”

The letter also raises direct national security concerns. Freeland requested detailed assurances that BC Ferries conducted a “robust risk assessment” and will engage with Canada’s security agencies to mitigate threats — particularly in relation to cybersecurity vulnerabilities, spare parts supply chains, and potential foreign influence over long-term vessel maintenance.

The backlash from the public, media, opposition B.C. Conservative party, trade unions, and now Ottawa adds new political pressure on BC Ferries and the provincial government just weeks after the ferry corporation announced that CMI Weihai had won the contract.

Earlier this week, Premier David Eby shared that BC Ferries informed Minister Farnworth of the contract award decision 30 days prior to the public announcement, and that the provincial government had already communicated its concerns to the ferry corporation.

The Premier emphasized he was “not happy with the result” and that this was “not my preferred outcome.” But Eby ruled out any measures to force BC Ferries to cancel the contract, emphasizing that the ferry corporation is independent of government, and that reopening the bidding process would significantly increase costs and result in lengthy delays to achieve much-needed service improvements.

“We don’t leave families sitting on the tarmac waiting for a ferry, because the propeller fell off because it’s 50 years old,” said the Premier, referencing the Queen of New Westminster’s recent 200-day unscheduled maintenance work after its propeller detached and caused an oil spill.

“We need the ferries urgently, and we’ve got to go. I won’t ask families to sit around with the dog sweating in the car for a four-sailing wait, because the ferries are down on a long weekend for the amount of time that’s required to get a 50-year deficit in ferry building reconstructed,” continued Eby.

“I want ferries built here at home in Canada. But I also know that we need ferries built right away for families that are ferry dependent here on Vancouver Island and across the province. It’s urgent, and I treat that with urgency. And so, we’re going to make sure that families are supported, businesses are supported… we’re ferry dependent.”

Conceptual artistic rendering of the New Major Vessels that will be built by CMI Weihai in China. (BC Ferries)

The large shipyard in the Shandong province in the Yellow Sea has a track record of delivering vessels to international clients, but its state ownership and ties to the Chinese government and navy have sparked controversy amid heightened geopolitical tensions.

BC Ferries has defended its decision by citing the urgent need for timely and cost-effective delivery of new vessels to replace rapidly aging major ships with falling reliability levels, and meet growing transportation demand.

The Chinese shipyard, CMI Weihai, was selected through an open and competitive procurement process, with BC Ferries asserting that the yard demonstrated the best combination of price, experience, capacity, and delivery timelines.

The ferry corporation also emphasized that it will deploy an on-site team at the shipyard to oversee quality control, and that stringent monitoring mechanisms will be in place throughout the construction process. BC Ferries maintains that the decision prioritizes fiscal responsibility to reduce the upward pressure on fare increases, as well as timely fleet renewal and long-term service reliability.

When asked by media last week, Farnworth revealed that the lowest-cost bid submitted by a European shipyard was $1.2 billion higher than the winning bid from the Chinese shipyard.

“When it comes to things like trade policy, industrial policy, [and] geopolitics, I think we would really defer that to the federal and provincial governments and expect them to manage and work those issues,” said Nicolas Jimenez, president and CEO of BC Ferries, during the June 10 announcement on the contract award, when asked by media about these potential concerns.

In recent years, BC Ferries had considered building Island Class vessels domestically and unsuccessfully attempted to pursue significant additional funding from the provincial and federal governments to do so.

And in 2024, local shipyards and trade unions called for the procurement process to require the vessels to be built in the province to help support local jobs and the economy.

However, the ferry corporation argued that doing so would be significantly more expensive — potentially costing hundreds of millions or even billions of dollars more — due to the much higher costs associated with Canadian shipyards and a 40 per cent increase in global shipbuilding costs since 2020.

Although Canadian shipyards were invited to participate in the international bidding process, none submitted proposals — reflecting a two-decade trend in which domestic shipyards have generally opted out, primarily because of their inability to compete on price globally. Before awarding this latest contract to a Chinese shipyard, BC Ferries had primarily turned to European shipbuilders for its vessel procurements in recent decades.

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