Five realities necessary to responsibly build ferries in Canada

1. Local options that can deliver
2. Fixed costs
3. Guaranteed delivery dates
4. Assured vessel and shipyard performance and quality
5. An open and competitive procurement process

• Replacing a ferry is rare – on average about once every 40 years for BC Ferries. The bigger economic benefit (pdf) comes from the 40-plus years of refits, conversions and upgrades that take place overwhelmingly in BC. This effort sees BC Ferries spend more than $130 million every year right here in BC.
• BC Ferries’ recent new build programs that were conducted abroad (Coastal, Salish, Island class ferries) were delivered on time and on budget. The last BC-built ferry – the Baynes Sound Connector – experienced significant delays.
• More than 90% of BC Ferries’ company-wide annual expenditures are already spent here in Canada with Canadian companies.

• Design costs can vary significantly based on the project. For example, BC Ferries’ NMV design phase cost a small fraction of what has been allocated for the new Coast Guard vessels.
• Canadian shipyards have a long history of building navy and coast guard vessels, as well as tugboats. Outside of the National Shipbuilding Strategy projects, no Canadian shipyard has built and delivered a ship even one-tenth the gross tonnage of BC Ferries’ New Major Vessels since at least 2018, which is the same year that Davie Shipyard last completed a new build vessel of any size, including its 2019 contract to deliver two ferries.
• Canadian shipyards face significant workforce shortages. In 2024, 86% of marine employers reported difficulty recruiting, with more than 3,600 vacancies across the sector and training programs projected to supply only 40% of needed workers over the next five years.

• According to data from a leading global shipbroker, CMI Weihai – where BC Ferries is building its first four NMVs – alone accounts for more than half of the global orderbook for large ferries.
• BC Ferries is one of many operators to build in China:
  • Just last month, Seaspan Corporation ordered 12 containerships from the China State Shipbuilding Corporation (CSSC), building on the 55 it ordered from China in 2021 alone.
  • Seaspan Energy has recently received three new LNG bunker vessels from CIMC Sinopacific Offshore & Engineering.
  • Marine Atlantic, a federal Crown corporation, received its newest ferry from CMI Weihai just last year.
  • Algoma Central Corporation has also ordered and received seven new build vessels from three different Chinese shipyards in recent years.
• Canada is home to just 1.7% of the world’s ferries, while China builds (or has orders for) about half of all large ferries in the world, followed by South Korea and Japan.

• View more detail on the five realities that must exist for BC Ferries to responsibly build in Canada in the backgrounder below.
• Learn more about BC Ferries’ New Major Vessel Program: www.bcferryiess.top/in-the-community/projects/new-major-vessels

BACKGROUNDER: Five realities to enable Canadian ferry building 

BC Ferries has identified five realities that it believes must exist to responsibly build future ferries in Canada. These reflect lessons learned from past builds, as well as best practice from international shipbuilding.

1. Local options must exist: Canadian shipbuilders must submit firm proposals so they can be considered and assessed. Those proposals would have to include sufficient detail to enable a complete assessment of the shipyard’s build strategy, firm costs, and delivery dates. Canadian shipyards could also be involved through participation as part of a national or international coalition proposal.
2. Costs must be fixed: BC Ferries' customers can't be burdened with unaffordable fare increases because of unexpected cost increases or project costs that weren't guaranteed. Fixed price contracts are generally the norm in international commercial shipbuilding.
3. Delivery date(s) must be guaranteed: BC Ferries' customers can't be asked to wait years longer than necessary for the vessels that are needed to keep them moving.
4. Vessel and shipyard performance and quality must be assured: the successful shipyard(s) must agree to international commercial shipbuilding contract standards, that include damages or termination rights for non-performance, and late or deficient delivery, backed by financial guarantees from independent banks. These standards will ensure the ferries are of high-quality and will be suitable, safe and protect the financial interests of the company and our customers. Shipyards must also meet BC Ferries’ high environmental, safety and workplace standards.
5. An open and competitive procurement process must be conducted: the approach must be compliant with all national and international trade and procurement laws and should demonstrate that it delivers the best overall value for BC Ferries' customers. This includes being able to understand and have confidence in the shipyard's ability to secure and manage suppliers at scale.

• Customers already fund about 75% of BC Ferries’ operating costs. Without these safeguards, any additional costs would fall directly to ferry users.
• Affordability and timeliness are essential for maintaining public confidence and avoiding a repeat of past shipbuilding missteps.
• With the next round of New Major Vessel procurement potentially beginning within two years, Canadian yards and policymakers need to act now to create conditions that allow Canadian bids to succeed.

FORWARD LOOKING STATEMENTS 

This press release contains certain “forward looking statements”. These statements relate to future events or future performance and reflect the Company’s expectations regarding growth in demand for ferry services, future performance of our contracted shipbuilder, financial and operational risks for our business, our operational performance and industry performance and trends. They reflect management’s current internal projections, expectations and beliefs, and are based on information currently available to management. Some of the market conditions and factors that have been considered in formulating the assumptions upon which forward looking statements are based include population and demand growth estimates, shipbuilding demand and cost projections, ship reliability estimates, ship builder past performance, traffic trends, inflation, interest rates, fuel costs, construction costs and timelines, the state of the economy, tariff impacts and fluctuating financial markets. A number of factors could cause actual events or results to differ materially from the results discussed in the forward looking statements. Although we believe that the forward looking statements contained in this press release are based upon reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward looking statements. These forward looking statements are made as of the date of this press release and British Columbia Ferry Services Inc. assumes no obligation to update or revise them to reflect new events or circumstances except as may be required by applicable law.