Transport Committee on Aug. 1st, 2025

[Nicolas Jimenez]

I'm not sure I understand your question.

[Aaron Gunn, Conservative, North Island—Powell River, BC]

You would have received the billion-dollar loan, or subsidy, regardless of whether you went with the state-owned shipyard in China or a shipyard in Germany or somewhere like that?

[Nicolas Jimenez]

That's correct.

[Aaron Gunn, Conservative, North Island—Powell River, BC]

Okay.

In addition to being the CEO of BC Ferries, you're also a taxpayer. Do you think it makes sense for taxpayer money, including from those who are struggling right now from unjust American tariffs, working in the steel and aluminum industries, to go towards subsidizing the purchase of ships from a state-owned shipyard in an adversarial nation and creating jobs in their country instead of our own?

[Nicolas Jimenez]

Well, I can tell you that my job is to make sure that we have a ferry system that works for British Columbians. We move almost 23 million people a year and 8 billion dollars' worth of goods into B.C.'s economy. We are in many cases the fulfillment of supply chains, and it's our job to provide a reliable, safe and affordable system. The process that we went through and the decisions that we made were with that singular focus on getting the best deal for British Columbia as possible.

[Aaron Gunn, Conservative, North Island—Powell River, BC]

Are you aware or able to estimate how many jobs this contract will create in communist China?

[Nicolas Jimenez]

I can tell you how many jobs and the economic impact we're going to have here in British Columbia, because this investment isn't just about ships—

[Aaron Gunn, Conservative, North Island—Powell River, BC]

Do you know how many shipbuilding jobs are being created in China as a result of this contract?

[Nicolas Jimenez]

I think you'd have to direct that to the shipyard itself.

[Aaron Gunn, Conservative, North Island—Powell River, BC]

You're not sure. Okay.

What message do you think it sends to Canadian workers and manufacturers? I have lots of small businesses in my riding that would love a below-market interest rate loan to allow them to hire Canadians and create economic wealth here in Canada. You're also a taxpayer, as I mentioned. Do you think it's an appropriate use of taxpayer money to send it to a foreign country?

[Nicolas Jimenez]

Again, I would say my job is to make sure that I'm standing up a reliable, safe and affordable ferry system in British Columbia.

We have vessels, Chair, that are well past their design life. The process that we went through was open and competitive. Regrettably, no Canadian shipyards submitted bids. What we did was essentially follow that process to get the best value in order to get ships into our system as quickly as possible.

[Aaron Gunn, Conservative, North Island—Powell River, BC]

Would the ferries have been more affordable to procure had they not been hybrid electric and if they were simply powered by diesel or LNG?

[Nicolas Jimenez]

It's hypothetical, because we put out the bid that we did. However, I would say the proposals that we received reflected where the market is at internationally. Again, we—

[Aaron Gunn, Conservative, North Island—Powell River, BC]

You're head of a giant ferry corporation. Would it have been cheaper if it were diesel or LNG ships and you weren't going full electric?

[Nicolas Jimenez]

What we saw in the market was what we expected, so whether it was LNG, battery or electric, the value of these ships is what we saw in the proposals. Those were the evaluations we went through. The decision led us to the yard that we selected, so, no, I think we saw what we saw.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Gunn, and thank you, Mr. Jimenez.

Next, we'll go online, to Mr. Greaves. The floor is yours. You have six minutes, sir.

[Will Greaves, Liberal, Victoria, BC]

Good afternoon. Thank you, Mr. Chair, and good afternoon, Mr. Jimenez. Thank you so much for joining us today.

As the only regular member of this committee who resides in coastal B.C., I know and my constituents know full well that ferries are a crucial part of our transportation infrastructure. They're absolutely critical to life on the coast. It's we who feel the effects of delayed and reduced service on our families and businesses and across the community as a whole.

Can you please speak to what the service conditions are, or what the levels of service are, that BC Ferries is currently providing and that motivated the procurement of these new vessels?

[Nicolas Jimenez]

There are two or three issues at play here. One is the age of the ships. The class of ships that we're going to replace are between the ages of 48 and 61. They are well past their design lifespan. These ships aren't just old; they're at the end of life.

The other challenge we have is the fact that our ferry system has reached capacity. I mentioned in my opening remarks that on our major routes—these are the larger routes servicing the Lower Mainland and southern Vancouver Island—in our peak season, including this weekend, which will be our busiest, ferries run at around 92% capacity. We leave hundreds of thousands of people.... Last year alone, 250,000 people were left behind, simply because the system had reached capacity. We literally could not take enough people who wanted to travel back and forth. The system is stressed; the vessels are old, and we have to move forward with renewal.

It's not just our vessels; it's our terminals, as well. We're spending significant amounts to invest in and renew our terminals to make sure we can move safely, affordably and reliably.

[Will Greaves, Liberal, Victoria, BC]

Thank you for that.

The opposition members have called for the cancellation of this contract, both interfering in BC Ferries' procurement decision and also calling for the cancellation of the loan from the Canada Infrastructure Bank.

Can you please speak to the effect that the cancellation of either the procurement or the loan would have on BC Ferries' service levels and the critical infrastructure that you provide to British Columbians?

[Nicolas Jimenez]

Again, I would go back to the comments I made in terms of the stresses on our system right now. Running with old ships, ships that are past their design life, puts us at serious risk. We saw this last summer when the propeller sheared off our 61-year-old Queen of New Westminster, one of the oldest ships in our fleet. There was metal fatigue as well as other reasons for that. That ship was out 200 days. That is a huge hit in the system. We don't have reserve vessels, so we don't have extra ships waiting to be deployed when there's a problem inside the system.

Every time a ship goes down, the system suffers. This is particularly acute, obviously, on our busiest routes. Our major routes consume about 80% of the entire movement in the system. That has a huge impact on communities, and it's not just people travelling for vacations. In fact, the vast majority of people move in our system for other reasons, for employment, to fulfill supply chains, to take care of family and to attend medical appointments. It's pretty profound when people can't move the way they need to in our coastal regions.

[Will Greaves, Liberal, Victoria, BC]

Thank you for that.

In the interest of clearing up some of the uncertainty that has been introduced into the meeting today, could you please respond to whether or not the federal government oversees the operations of BC Ferries or has any direct role in decision-making at BC Ferries?

[Nicolas Jimenez]

The federal Department of Transport is a regulator. In that sense, there is a regulatory relationship between my company—all ferry companies—and the department, but there's no active operational relationship. We don't report to or regularly have conversations with senior federal officials. Our on the ground teams do interact with local Department of Transport teams when there are regulatory matters that have to be enforced and dealt with.

[Will Greaves, Liberal, Victoria, BC]

Thank you.

To my final question, can you also speak to the benefits that the procurement of these new vessels will lead to on the B.C. coast in terms of opportunities for Canadian workers to engage in maintenance and other activities in relation to the newly procured vessels?

[Nicolas Jimenez]

I guess there are two ways to answer that.

We spend about $130 million a year on maintenance, refits and upgrades for our vessels, and that's in all of British Columbia, with local B.C. shipyards. Over the course of their lives, these ships alone will see about 1 billion dollars' worth of investment in terms of that maintenance-refit-upgrade component.

In addition, we would expect to see other effects in the economy. We had an independent study that suggests there's going to be something like 4 billion dollars' worth of economic impact as a result of these ships. These ships are bigger. They're going to be more reliable. They can travel in more adverse weather. They're going to be able to move more vehicles, people and cargo. That's a significant contribution, again, to local economies, tourism and other aspects of the social and economic fabric of coastal British Columbia.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Jimenez.

Thank you, Mr. Greaves.

Mr. Barsalou‑Duval, you have six minutes.