Fury grows at shipping new ferry contracts to Europe

U.S. operator of privatized British Columbia ferry system purchasing
new vessels overseas with approval of Gordon Campbell's Liberals

Victoria - Fury is escalating over the decision by B.C. Ferries, a private company created by Premier Gordon Campbell, to outsource the multi-billion-dollar construction of new West Coast ferries to Europe rather than having the vessels built by Canadian shipyards and workers.

"I've got to ask, what on earth are they thinking that they won't even allow a B.C company to put the bid in."  - North Vancouver Mayor Barbara Sharp

B.C. Ferries is preparing to award billions in contracts for new ferries to European shipyards rather than give  the jobs and economic benefits to Canadian shipyards and workers. The company is run by an American named David Hahn. With the blessing of Premier Gordon Campbell and his Liberal cabinet, Hahn is also demanding that the Canadian government  subsidize the massive outsourcing project by waiving potential billions in duties normally applied to foreign built ships.

Snubbing Canada

The privatization of the B.C. ferry system, rammed through the legislature by Campbell over widespread public protest, has been described as a "legalized theft." What does the term mean?

Robin Mathews, a West Coast writer and professor, defines "legalized theft" as follows:

"It is, briefly, the use of laws to further immoral acts, the use of political and other pressure and power to have immoral acts passed (like the new B.C. 'Coastal Ferry Act', Bill 18), or to prevent moral laws from being passed and - in the case of governments like the Gordon Campbell Liberal government in B.C. – it is the active practice of breach of trust outside of any of the laws that presently can be invoked that cover breach of trust."

Specifically, Bill 18 exempts B.C. Ferries from complying with the B.C. Labour Relations Code, thereby allowing the company to declare war on employees - which it has done with abandon. The legislation also exempts the company from the province's Ombudsman Act, Freedom of Information law, and from oversight by the Auditor General. The privatized company is also - for all intents and purposes - free to set tolls as it likes without interference from the government to protect the interests of citizens.



An American buccaneer

After Hahn became president of B.C. Ferries (May 2003), the company quickly established itself as vehemently anti-labour, aping standards already well established by Campbell and his cabinet. The company is now extending its hostile attitude beyond workers to the province as a whole by choosing foreign shipbuilders to replace aging vessels in its fleet.

In July, Hahn announced that three new Super "C" class ships, worth about $500 million, will be built in Europe. A further 19 vessels will be constructed over the next 15 years.

No Canadian company was deemed good enough by B.C. Ferries to make its "shortlist" for the first three ships and there is little hope that any of the other vessels will be built in Canada either, despite statements by Hahn that no final decision has been made.

Outrageous demand

The company says publicly that Canadian companies will be allowed to bid on contracts for the remaining vessels. But few are betting on it. In fact, reports are already circulating that the fix is in to send the next major contract to Poland. Indeed, Hahn has confirmed he is negotiating with a Polish shipbuilder.

Meanwhile, to make it easier to contract out the work to foreign shipbuilders, B.C. Ferries - with the obvious blessing of the Campbell Liberals - has had the audacity to ask the federal government to waive a 25% duty normally charged to foreign built ships.

Applied to all 22 ships that will eventually be built, such a waiver would translate into a multi-billion-dollar incentive by Ottawa to move Canadian jobs overseas and deprive Canadian workers and communities of benefits that would otherwise remain at home.

The B.C. Ferry and Marine Workers Union (BCFMWU) has already written to David Emerson, the new federal industry minister, appealing to him to use his influence to keep Canadian shipbuilding strong and to encourage employment at home rather than abroad. The union is affiliated with the B.C. Government and Service Employees' Union (BCGEU), a component of the National Union.

'Alarmed and concerned'

Jackie Miller, president of the BCFMWU, told Emerson in the letter she is "alarmed and concerned" that B.C. Ferries has decided to build its first three new ferries in a foreign shipyard.

"This move will cost Canadians 2,000 jobs and half-a-billion dollars in investment. With the potential for a further 19 ships to be constructed over the next 15 years, these figures will escalate exponentially with the resultant loss of thousands more jobs and billions of taxpayer dollars," she wrote.

"Regardless of the façade of the Coastal Ferry Act, the ferry service in British Columbia is still a vital public transportation system and should partner with Canadian companies whenever possible. The province’s shipyards that have historically built our vessels should be a part of that partnership for renewal of the fleet and the second generation of BC’s ferries," she added.

"I am asking you to keep the customs duties on imported large ferry vessels in place," Miller wrote.

"This duty is a disincentive to throwing away Canadian jobs and investment and ensures that BC Ferry Services, Inc., the private company, competes fairly with all others in private industry.

"Both Finnish and German shipyards are highly subsidized and that advantage, combined with waiving the 25% customs duty, puts our shipyards in a dilemma that could lead to a total failure of the industry and a continued disincentive for young people to join the ranks of skilled trades’ workers in this province."

Three mayors

Three mayors in Vancouver area communities - representing residents of North Vancouver, West Vancouver and the District of North Vancouver - have now joined the BCFMWU in campaigning to keep the lucrative contracts in Canada.

North Vancouver Mayor Barbara Sharp says B.C. Ferries is being unfair. "I've got to ask, what on earth are they thinking that they won't even allow a B.C company to put the bid in. I mean, to me, it's just beyond my imagination what's going on in their particular process to disallow that.

"It's not that they're awarding the bid. It's just they want the opportunity to put the bid in – which is just shocking that they won't allow them to do that," says Sharp.

The Shipyard General Workers Federation of B.C. (SGWFBC) says no one can trust Hahn or the secretive group that now runs the company with full Liberal support.

Drop the pretense

"If B.C. Ferry Services would give a $500 million job to Germany or Finland without any regard to the lost investment and jobs here at home, why wouldn't they also give away smaller projects that could be built in British Columbia, too?" asks SGWFBC president George MacPherson. "It's time the B.C. government stopped pretending it has nothing to do with B.C. Ferry Services and started demanding some fairness and accountability in the tendering process before the B.C. shipyard industry disappears to Europe," he added.

Gordon Campbell

More information:
• The Theft of B.C. Ferries, David Hahn, Globalization, and Corporate Crime

Web posted by NUPGE: 8 August 2004

More News
News Archive
Media releases