NEWS RELEASE August 10, 2004
BC Ferry Services is forfeiting $200 million by building 3 Super C Class ships in foreign shipyard, Shipyard Workers' Federation reveals: losing $75 million federal contribution for building in Canada and paying $125 million in duty to import foreign-built ferries for $200 million total
Federation says ferry customers, taxpayers will be on hook for unnecessary $200 million expense
VANCOUVER – BC Ferry Services is forfeiting $200 million by building three new Super-C Class ferries in a European shipyard, including a federal government contribution worth up to $75 million, says the BC Shipyard General Workers' Federation.
A federal non-repayable contribution of up to 15% of the purchase price is payable for ships built in Canada, meaning that up to $75 million could be saved on the reported cost of $500 million, says George MacPherson, president of the Federation. The federal Structured Financing Facility program of Industry Canada makes the contribution to encourage Canadian shipbuilding, he said.
At the same time, BC Ferry Services will have to pay the federal government a 25% import duty on the foreign-built ships, which would amount to an additional $125 million, MacPherson said.
“How much clearer can it be? BC Ferry Services can build three ships in BC, create 2000 direct jobs, keep a $500 million investment here at home and get the federal government to pay us $75 million for building them in Canada . That means we get three new built-in-BC ferries worth $500 million for $425 million,” MacPherson said.
Or, BC Ferry Services can foolishly spend $500 million creating thousands of jobs in Germany or Finland and then pay an additional $125 million duty on top of that for importing foreign-built ships, for a total cost of $625 million. It's easy math, even for the BC government: $425 million versus $625 million. Jobs in BC or jobs in Europe , take your pick,” MacPherson said.
“But one thing is very clear: if BC Ferry Services sticks to its plan to build new ships in Europe, BC Ferry Services' customers and BC taxpayers will be stuck paying an extra $200 million for creating jobs in a foreign country,” MacPherson said. “And the $200 million will all stay in Ottawa . How brilliant is that idea?”
MacPherson said it is extremely unlikely that BC Ferry Services will have its request for federal import duties to be waived because of the precedent it sets for other Canadian companies, including Canada Steamship Lines, owned by Prime Minister Paul Martin.
Information on the Structured Financing Facility can be found online at: http://strategis.ic.gc.ca/epic/internet/insim-cnmi.nsf/en/uv00003e.html
The federal aid has been available since 2001 and $150 million has been allocated for the program over five years. At least four BC shipyards have benefited from the program to date, according to Industry Canada .
For more information : Call George MacPherson at 604-254-8204 or cell 604-220-3291 or Bill Tieleman, West Star Communications, at 604-844-7827 or cell 778-896-0964.