NEWS RELEASE June 22, 2007
BC Shipyard Workers’ Federation says federal Conservative government wrong in granting $13 million duty remission for BC Ferries purchase of Greek-built MV Sonia – now named Northern Adventure - BC Ferries should pay duty on Sonia and nearly $1 billion spent on foreign-built replacement ferries
VANCOUVER – The federal Conservative government was wrong in its decision today to waive a 25% duty worth $13 million that BC Ferries should have paid on the purchase of the Greek-built MV Sonia, the replacement for the sunken Queen of the North, says the BC Shipyard General Workers’ Federation.
Federation President George MacPherson said today that the federal government is rewarding BC Ferries for buying replacement ferries off shore in foreign shipyards instead of building them in BC and Canada.
“Why would the federal government actually reward BC Ferries for exporting jobs and investment to a foreign country when BC shipyards and workers could have built a new ferry right here at home?” MacPherson asked. “BC Ferries could have leased a ship temporarily and built a new ferry in BC and named it the Spirit of Hartley Bay but it was intent on buying another foreign-built ship.”
“The entire purpose of the 25% duty on foreign-built ships is to encourage shipbuilding and job creation in Canada. If BC Ferries can end run that duty, it defeats the entire purpose of the duty and betrays the Canadian industry and Canadian workers,” MacPherson said.
And MacPherson said the federal decision means the Canadian shipbuilding industry and its workers are at even greater risk of being eliminated because it may mean the Conservative government will end the 25% duty on foreign-built ships altogether.
“BC Ferries is spending nearly $1billion on foreign built ferries, meaning nearly $1 billion in investment and 5,000 direct and indirect jobs are leaving the province,” MacPherson said. “If BC Ferries and other ship owners can avoid paying the existing duties, Canada’s shipbuilding industry is at risk of complete collapse.”
MacPherson said the BC Shipyard General Workers’ Federation and other unions and industry groups will need to increase pressure on the federal government not to grant duty remission to BC Ferries on the three Super-C class ferries worth $542 million that are currently being constructed in Germany.
The duty on the three ships amounts to about $82 million, MacPherson said, and BC Ferries is lobbying the federal Conservatives to waive that duty also. But MacPherson said the case against duty remission on the German-built ships is a stronger one.
“The three Super-C class ferries were contracted to Flensburger Shipyard in Germany without allowing Vancouver Shipyards to even make a final bid on the job and we believe that should disqualify BC Ferries from winning duty remission,” MacPherson said.
MacPherson said the federal duty works to encourage ship building in Canada instead of foreign countries, which often have government subsidies and low-cost labour and lax environmental standards. The duty paid by any company that imports ships helps offset the cost of national shipbuilding research and development and the Structured Financing Facility, a loan program that reduces costs for Canadian purchasers of ships built here.
The BC Shipyard General Workers’ Federation represents about 1,600 workers in the shipbuilding, repair and maintenance industry.