EVIDENCE

Standing Committee on Transport, Infrastructure and Communities NUMBER 005 1st SESSION 45th PARLIAMENT Friday, August 1, 2025 Le vendredi 1 er août 2025 Standing Committee on Transport, Infrastructure and Communities CANADA [Recorded by Electronic Apparatus] EVIDENCE August 1, 2025 Committee NUMBER 005 NUMBER 005 NUMÉRO 005 05 01 08 2025 2025/08/01 12:05:00 House Of Commons Comité permanent des transports, de l'infrastructure et des collectivités Standing Committee on Transport, Infrastructure and Communities TRAN Chair Peter Schiefke 1 45

(1205) [ English ]

The Chair (Peter Schiefke (Vaudreuil, Lib.)) :

I call this meeting to order. Welcome to meeting number five of the Standing Committee on Transport, Infrastructure and Communities. Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, July 7, 2025, the committee is commencing its study of the Canada Infrastructure Bank's financing of new vessels for BC Ferries. Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members may attend in person in the room and remotely by using the Zoom application.

Before we continue, I would like to ask all in-person participants to consult the guidelines written on the cards on the table. These measures are in place to help prevent audio feedback incidents and to protect, of course, the health and safety of all participants, including our interpreters. You will also notice a QR code on the card, which links to a short awareness video. I'd like to make a few comments before we begin for the benefit of witnesses and members. Please wait until I recognize you by name before speaking.

For those participating by video conference, please click on the microphone icon to activate your mic. Please mute yourself when you are not speaking. For those on Zoom, at the bottom of your screen you can select the appropriate channel for

interpretation—floor, English or French. For those in the room, you can use the earpiece and select the desired channel. As a reminder, all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. The clerk and I will manage the speaking order as best we can. We appreciate your patience and understanding in this regard.

Before we welcome our first witness today, I would like to express, on behalf of all members, that our thoughts are with all Canadians affected by the ongoing forest fires across the country, and express our appreciation to all the first responders and firefighters who are doing their best to manage these. Appearing before us, colleagues, for the first hour of today's five-hour meeting is the Honourable Chrystia Freeland, Minister of Transport and Internal Trade.

Gord Johns (Courtenay—Alberni, NDP) :

I have a point of order, Mr. Chair.

The Chair :

Mr. Johns is joining us today. The floor is yours, sir.

Gord Johns :

Thank you so much, Mr. Chair. I just wanted to call for a point of order. I'm seeking unanimous consent. I am one of seven Vancouver Island MPs. As you know, BC Ferries is critical to the lifeline of Vancouver Islanders. Almost 25% of Vancouver Islanders voted New Democrat. As a New Democrat, I'm hoping that this committee will support allowing me two and a half minutes of questioning at the end of each round due to the impact this has on my Vancouver Island constituents.

As someone who's met with industry and as someone who's met with BC Ferries, ENGOs, first nations, higher learning institutions, and labour, I could offer a lot in terms of my questions that would support this committee, Vancouver Islanders, British Columbians and Canadians. I hope this committee will support my request.

The Chair :

Thank you very much, Mr. Johns. I was going to ask for unanimous consent, but I see that your hand is up, Mr. Albas.

Dan Albas (Okanagan Lake West—South Kelowna, CPC) :

Mr. Chair, if Mr. Johns is given time, it should be at the expense of whichever party gives it. We have plenty of questions, and we're not prepared to share our time.

The Chair :

Thank you very much, Mr. Albas. [ Translation ] Mr. Barsalou‑Duval, please go ahead.

Xavier Barsalou-Duval (Pierre-Boucher—Les Patriotes—Verchères, BQ) :

Thank you, Mr. Chair. If any committee members wish to share a portion of their time with the NDP, I have no problem with that. However, since I don't have much speaking time of my own, I will not be sharing my time.

The Chair :

Thank you very much, Mr. Barsalou‑Duval. Mr. Lauzon, you have the floor.

Stéphane Lauzon (Argenteuil—La Petite-Nation, Lib.) :

I see no problem in granting the NDP representative some time to ask questions.

The Chair :

Are you willing to give up some of your speaking time?

Stéphane Lauzon :

No. I suggest that the committee allow the NDP to speak or that it add on enough time to give the NDP two and a half minutes of speaking time.

[ English ]

The Chair :

Unfortunately, Mr. Johns, I don't have the unanimous consent of the committee to provide you with that speaking time, and I don't have any members who are themselves coming forward to provide you with their time. Unfortunately, you will not have an opportunity to ask questions today, sir.

Gord Johns :

Thank you for giving me the opportunity. I do believe that this is an affront to democracy. It hurts Vancouver Islanders, who would expect that we'd be given a chance of two and a half minutes to question each of the panellists and bring some very important insight. As the only MP who's taken this crusade over the last month of meeting with the stakeholders, I think I have a lot to offer. I hope members will cede some of their time in consideration of the people of my riding and the benefit this would bring to the transport committee.

The Chair :

Thank you very much, Mr. Johns. I'll return to welcoming our first witness for today. Our guest is the Honourable Chrystia Freeland, Minister of Transport and Internal Trade. Joining her from the Department of Transport are Arun Thangaraj, deputy minister, and Stephanie Hébert, assistant deputy minister of programs. Welcome to all three of you. Thank you for taking the time to appear today. Minister, it's always a pleasure to have you here. You have five minutes for your opening statement. You now have the floor.

Hon. Chrystia Freeland (Minister of Transport and Internal Trade) :

Thank you very much, Chair—Peter—and thank you to everyone who is here working so hard. I also really want to thank Arun Thangaraj, the deputy minister of transport, and Stephanie Hébert, assistant deputy minister of transport. Thank you for all your hard work and for being here with me today. I also want to join you, Mr. Chair, in recognizing that this is a time when wildfires are raging in many parts of our country. I know that it touches some of the MPs here very close to home.

It's a good opportunity to thank all the first responders and to let Canadians know that on this issue, certainly, we're all in it together to support them. As we all know, BC Ferries is an independent, privately operated organization regulated by the Province of B.C. This is not an entity under the authority of Transport Canada. I share the committee's disappointment with this procurement. [ Translation ] This decision comes at a time when the Government of Canada is making record investments in rebuilding Canada's marine sector.

The National Shipbuilding Strategy has created and maintains over 20,000 jobs annually, while contributing over $2.3 billion a year to the GDP, supplying critical resources to the Royal Canadian Navy and the Canadian Coast Guard, and strengthening national sovereignty and economic resilience. [ English ] In line with a 1977 agreement, Transport Canada does provide funds, strictly for operations, to the Province of B.C. This includes nearly $38 million in federal support that will go to the province in the fiscal year 2025-26. The province uses that funding to provide operating support for ferry services.

I am troubled by the procurement. I strongly believe in supporting Canada's shipbuilding capacity, supporting middle-class jobs and supporting our economy. We all recognize that this is a critical moment, particularly to support our steel and aluminum sectors, given the tariffs that Canada is facing. (1210) [ Translation ] I've asked every organization under Transport Canada's authority, including ports, airports and marine services, to give preference to Canadian products whenever possible when they make major purchases, and that includes Canadian steel and aluminum.

When Canadian options are unavailable, our next preference is to buy from countries that have signed reciprocal procurement-related trade agreements with Canada, to make sure that our investments support fair and open trade practices. Last June, I sent out 71 letters containing that instruction. [ English ] In line with the need now to support the Canadian economy, I have directed all organizations under the Transport Canada umbrella, including ports, airports and marine services, to prioritize Canadian content in their major procurements, particularly Canadian steel, aluminum and lumber wherever feasible.

When Canadian options are not available, our next preference is to buy from countries with whom we have reciprocal procurement agreements in our trade deals, ensuring that our investments support fair, open and rules-based trade. In June I sent out 71 letters with this instruction. I have been an advocate of reciprocal procurement for Canada for some time. I first put forward the idea as finance minister in the 2021 budget, and I advanced it further in the 2023 budget and 2023 fall economic statement.

In fact, in 2023 the Department of Finance published a policy statement outlining a plan to go forward with reciprocal procurement. This June the federal government put in place a reciprocal procurement policy. I'm also glad to announce today that Transport Canada will be convening a meeting with the provinces and territories as well as ferry owners, operators, shipyards, labour representatives and the steel and aluminum industry. I spoke this morning about the meeting with the CEO of Seaspan.

This meeting will be a chance for us to work together—the federal government, the provinces, shipbuilders, labour, and steel and aluminum—to talk about how we can buy Canadian. I will be convening a similar meeting, including the steel sector, for the rail industry and all rail operators. [ Translation ] Right now I'm convening a meeting with the provinces and territories, along with ferry owners and operators, shipyards, representatives of labour and members of the steel, aluminum and softwood lumber industries. This meeting will allow us to work together on addressing Canada's ferry procurement challenges.

I plan to hold a similar meeting with the rail industry as well. I want to thank the deputy minister of transport for working hard with me to organize these meetings. The response we've received from our provincial and territorial counterparts and from industry has been very positive. I think there's a lot of goodwill to do that. (1215) [ English ] Let me conclude by saying that I'm grateful for the work of the committee. I hope we can spend some time looking ahead to ways that we can support Canadian shipbuilders and Canadian steel and aluminum producers. That's something that I am certainly focused on.

I look forward to answering your questions.

[ Translation ]

The Chair :

Thank you very much, Minister. [ English ] We begin our line of questioning today with Mr. Albas. Mr. Albas, the floor is yours. You have six minutes, sir.

Dan Albas :

Thank you, Mr. Chair. Thank you, Minister, and thank you, Deputy Ministers, for the work you do. Minister, the ink isn't even dry on President Trump's latest executive order, basically targeting Canada for 35%. Our steel and aluminum workers are scared, yet here we have an opportunity to fund, here in Canada, the elbows-up and Canada-strong rhetoric that your government has been putting out. We can stop this loan by the Canada Infrastructure Bank, and we can go to the table with BC Ferries and plan to do it and support our steel and aluminum workers and shipbuilders here in this country. Are you standing by the loan?

Hon. Chrystia Freeland :

Thank you, Mr. Albas, for your question. I want to start by saying that I know the wildfires are touching your constituency and that I support you and your constituents. The federal government is here to provide any support they need. I totally agree with you that this is a moment of crisis for the Canadian steel and aluminum sectors and they need our government's support. They need our country's support. I was on the phone this morning with the CEO of one of our steel companies and was in touch with one of our union leaders. As well, I was talking to the CEO of Seaspan.

My approach right now is to ensure that in the areas under my control, in the areas that Transport Canada has responsibility for, we are pushing for Canadian workers in the manufacturing sector and for the use of Canadian steel and aluminum. That's why I sent out 71 letters in June to all the agencies I'm responsible for. That's why I'm convening a meeting specifically ensuring that we are building ferries in Canada using Canadian steel, and it's why I will be convening a meeting to do the same thing with the rail sector.

Dan Albas :

Minister, it sounds like you're comfortable with the loan going out and supporting, effectively, the outsourcing of Canadian jobs, to subsidize them over in the People's Republic of China at a Chinese state-owned shipyard. Speaking of letters, I have your letter here dated June 16, 2025.

It says, “I am dismayed that BC Ferries would select a Chinese state-owned shipyard to build new ferries in the current geopolitical context, and I ask that you verify and confirm with utmost certainty that no federal funding will be diverted to support the acquisition of these new ferries.” Did you know when you wrote this letter that the Canada Infrastructure Bank was going to be funding $1 billion of taxpayers' money to the acquisition of these vessels?

Hon. Chrystia Freeland :

Let me first take issue, if I may, with your opening comment. I am dismayed by this procurement. I have made that very, very clear. It's not just rhetoric. I have acted. I'm the transport minister. I was and am aware that money goes from Transport Canada in operating support for the operation of ferries in British Columbia. It was very important to me to make formally clear an insistence that none of that operating money be used for this procurement. I have received those assurances.

Second of all, as importantly, I am taking active steps to ensure that in going-forward purchases of anything Transport Canada has control over, we are putting a priority on Canadian manufacturing jobs, on Canadian steel and on Canadian aluminum. We are not just talking about it. We are actually working to do it. That is really important. I have to say that I was very encouraged by the conversation I had today with Seaspan. They're excited to be part of this work.

Dan Albas :

Minister, I think any accountant will tell you that an operating budget will have a payment down of debt. BC Ferries will be using some of the federal monies it will have in its operating budget for servicing the debt to the Canada Infrastructure Bank. That's superfluous to this. You are the senior minister, between you and Minister Robertson. Are you going to say in cabinet that, number one, we should cancel this loan in favour of steel and aluminum and shipbuilding here in Canada—yes or no?

Hon. Chrystia Freeland :

I have been very clear in my testimony today before the committee, in the House of Commons and in all my opportunities to speak formally about this that I am disappointed by this procurement. In fact, I think there is widespread disappointment across Canada with this procurement. In the areas that I'm responsible for as transport minister, I am ensuring that our procurement is favouring Canadian manufacturers and favouring Canadian steel and Canadian aluminum. That's why I sent out 71 letters in June to the agencies under my authority, saying that this is what we'll be doing.

(1220) Dan Albas :

Minister, you have an opportunity to say no to this loan and to say yes to those conversations and put some heft behind it. It sounds to me like you're like a ship sailing at night and seeing another one sail by, except those are our jobs going to China, to a shipyard that's owned and managed by the state. Minister, why aren't you saying, no, you won't support this loan? It's contrary to what the government's intentions are and what Canadians are asking for. Why are you picking the loan over your own letter?

Hon. Chrystia Freeland :

I've been in politics for 12 years now, and I've been compared to many different things, but I think it's the first time I've been compared to a ship. I've been compared to worse. Let me just say, Mr. Albas, that I am disappointed by this procurement. In the areas under my control as transport minister, I can assure you that I am doing everything in my power to ensure that the agencies that Transport Canada is responsible for put a priority on Canadian manufacturing workers and Canadian steel and aluminum. I want to add that it's not just about statements.

We have to work together—industry, all levels of government and unions—to be sure that we have the capacity to use Canada's steel and aluminum. I am totally devoted to doing that.

The Chair :

Thank you very much, Minister. Next we'll go to Ms. Nguyen. Ms. Nguyen, the floor is yours. You have six minutes.

Chi Nguyen (Spadina—Harbourfront, Lib.) :

Thank you very much, Mr. Chair. Hello, Minister Freeland, and hello to my colleagues. Thanks, everyone, for being here for an important conversation. Minister, let me start by saying that my riding is home to key transport corridors. Our community knows that Canada-first procurement is all about ensuring that federal dollars can support Canadian workers, Canadian steel and Canadian infrastructure that will benefit local communities. You were made aware of this issue. You started to share a little bit of detail in your opening remarks about the steps.

Could you explain to us and to Canadians watching at home some of the steps you took to address this issue around making sure that we were showing up as Canada first?

Hon. Chrystia Freeland :

Thank you very much, Ms. Nguyen, and congratulations on your pretty recent election. You and I were in your riding together this morning. It is indeed a place where transport infrastructure is important. This may be an opportunity for me to offer a quick shout-out to the excellent airport you and I both used to get to Ottawa today: the island airport, or Billy Bishop airport. It's an example of how important good transport infrastructure is. As we've been discussing, I am disappointed with this procurement. I think that is a view shared by all members of this committee.

My view is that this needs to serve as a wake-up call, and what we need to do is work very hard to ensure that we are buying Canadian. Where we have major procurement, we need to work hard to ensure that we're using Canadian steel, Canadian aluminum and Canadian lumber. There are two very specific steps that I've taken to make that a reality. First of all, I've sent out a letter. There are actually 71 letters, and we worked on them together.

They were sent to all of the entities that are under the control of Transport Canada, making it clear to them, in writing, my expectation that they will put a priority on Canadian jobs and Canadian workers. In that letter, I specifically instructed them to focus on using Canadian steel, Canadian aluminum and Canadian lumber. I want to emphasize that point. These are absolutely essential sectors of the Canadian economy, and we—collectively, as a country—need to be finding projects to use that steel, aluminum and lumber here in Canada. The second thing I've done—and this is really important—is convene two meetings.

One is for the shipbuilding and ferry-operating sector. We'll have the federal government, provincial representatives, shipbuilders, publicly and privately owned ferry operators, labour and the steel sector, in particular. We're going to work together and talk about what we need to do to ensure that, going forward, we are making decisions that support our shipbuilding sector and our steel sector. We are going to be doing the same thing with the major rail operators when it comes to light rail.

I had a conversation today with Rob Prichard about ways in which the high-speed rail project can be one that fills up the order books of our steelmakers going forward. I also spoke to the CEO of a steel company this morning about exactly that issue, as well as the issue of ferries. We should use this committee meeting to look ahead and say this is a moment when, as a country, we have an opportunity to help ourselves. It's going to take a lot of hard work. I think it's work that is very important to do.

(1225) Chi Nguyen :

Thank you. I'll keep this one brief. Some things we are seeing in our economy are challenges around youth unemployment and access to great jobs. Can you tell me a bit about how taking a buy Canada approach through this work will help us on those fronts?

Hon. Chrystia Freeland :

Absolutely. These areas we're talking about, whether they're shipbuilding, the rail sector, steel, aluminum or lumber, are industries that provide great jobs for Canadians. They are quite literally engines of our economy. It is essential that we maintain the jobs we have now and that we continue to provide opportunities for young Canadians.

The Chair :

Thank you very much, Minister. Thank you, Ms. Nguyen. [ Translation ] Our next speaker is Mr. Barsalou‑Duval. You have six minutes.

Xavier Barsalou-Duval :

Thank you, Mr. Chair. Thank you, Minister, for joining us today at this important meeting. Last June 2, the Minister of Industry , Mélanie Joly, said that Ottawa was committed to using Canadian steel and aluminum for its national infrastructure and defence projects. Those announcements flooded the media. She toured a large number of steel mills across the country, with lots of photos and press conferences along the way.

Two weeks later, we found out that the Canada Infrastructure Bank had provided $1 billion to have ships built at a Chinese shipyard, by Chinese workers and using Chinese steel, but paid for with Canadian money. In your opinion, has your government betrayed Canadian steelworkers?

Hon. Chrystia Freeland :

Thank you for your question. As I said at the beginning of my remarks, I am deeply disappointed by this decision. In my opinion, this is a critical moment in time for Canada and Quebec, and our government must support our steel, aluminum and softwood lumber sectors because they are under attack. I'm also in the process of making—

Xavier Barsalou-Duval :

You say you're disappointed, Minister, but it was your government that made this decision. So you're disappointed in your government's actions. Is that what you're saying? I would agree with you. However, I want to clearly understand your position. You're the one in charge, so you're disappointed in yourself? That seems a strange answer and a bit glib.

Hon. Chrystia Freeland :

No, I reject the suggestion that my answer is glib. As I said in my speech, the agency in question is not part of the federal government. I know that the Bloc Québécois understands the importance of provincial jurisdictions, and we need to be mindful of the division of federal and provincial jurisdictions. However, I share the concern—

Xavier Barsalou-Duval :

Considering that federal funds are being invested in this project, I'm sure you can understand that workers feel betrayed.

(1230) Hon. Chrystia Freeland :

I understand and I share that concern, That's why, as Minister of Transport and Internal Trade, I'm doing everything in my power to put Canadian workers, including workers in the aluminum, steel and softwood lumber sectors, first. As I've already explained, I've written—

Xavier Barsalou-Duval :

Okay. I have another question for you.

Hon. Chrystia Freeland :

—a letter to each agency that I'm inviting to attend.

Xavier Barsalou-Duval :

You said so a few times, though. In the letter you wrote to B.C.'s minister of transportation and transit, Mike Farnworth, you raised concerns about security risks. You also asked him to confirm that no federal funding would be used for ferry procurement. However, we don't know happened after that letter was sent. Did you receive a reply to your letter?

Hon. Chrystia Freeland :

We are having good discussions with the province of British Columbia. I'm here as the Minister of Transport and Internal Trade, and I can tell you that I received assurances that Transport Canada's funding would go to British Columbia exclusively to support travellers. That's why we're providing this funding, which will be used just to—

Xavier Barsalou-Duval :

I understand that you received these assurances regarding Transport Canada. However, your letter stated that no federal funding should be used for ferry procurement, and that this was not limited to Transport Canada. I assume you wrote that letter unaware that a portion of this federal funding would be used to build ferries in China. I would therefore like to know, first of all, why were you not aware of this funding, and second, when did you find out about it?

Hon. Chrystia Freeland :

Again, I am here as Canada's Minister of Transport and Internal Trade, and as such, I am doing everything in my power to support workers in the steel, aluminum, and softwood lumber sectors. I sent a letter with very specific instructions to all of the agencies under my authority. I'm in the process of convening a meeting with stakeholders to support shipbuilders—

Xavier Barsalou-Duval :

So you ministers don't talk to each other about decisions, upcoming announcements or major investments? There's no back and forth among the ministers, no discussion at the Council of Ministers? I'm a bit surprised that, just a few weeks after I requested confirmation that no federal funds would be spent on this project, we heard that the project would receive federal money after all. It seems to me that something went wrong. Is there no coordination between departments? You don't talk to each other. Is that it?

Hon. Chrystia Freeland :

As I said, as far as my jurisdictional powers go, I think that prioritizing the steel, aluminum and softwood lumber sectors is very important. It's fine to talk about making these critical sectors a priority. Now, it's time to do the work needed to get us there. That's what I'm doing in the ship and rail sectors.

The Chair :

Thank you very much, Minister. Thank you very much, Mr. Barsalou‑Duval. [ English ] Next we'll go to Mr. Lawrence. Mr. Lawrence, the floor is yours for five minutes, sir.

Philip Lawrence (Northumberland—Clarke, CPC) :

Thank you, Mr. Chair. Thank you, Minister, for being here. I want to just take a moment and think about the folks who are struggling right now. There will be husbands or wives who go home to their kids this evening who say, “You know what? We were expecting to go to hockey this year. We can't.” There will be workers who go home and say, “We can't make the mortgage payment this week because of the tariffs that were imposed.” There was an opportunity for this government to give relief to some of those families—families in British Columbia, in Quebec, and elsewhere.

There was an opportunity to have really a generational investment that would have given jobs for years, if not decades, to families. That didn't happen, because of your government. Now you say you're dismayed. You have consternation. You have 71 letters that are out there. Will any of those letters provide any relief to the families I've been talking about?

Hon. Chrystia Freeland :

Yes, absolutely they will. I want to thank you for the way you framed the issue, because I am so concerned about the workers in our steel sector, in our aluminum sector and in softwood lumber. These are very important Canadian industries. I've spent a lot of time in steel mills, in aluminum smelters and in pulp mills. When we fought the

section 232 tariffs in 2018, we worked really hard with steel and aluminum, so I know who you're talking about. I think that we as Canadians need to recognize that these essential industries, and the people who work there—often generations of families working there—are under attack. They need our support. That's what I'm working hard to do. These 71 letters to the agencies I control are about saying this to them: When you are looking at your procurement, you need to put a priority on Canadian manufacturing jobs, steel, aluminum and softwood. I want to point to this meeting that we're going to hold with the shipbuilders, with steel and aluminum and with the ferry operators.

(1235) Philip Lawrence :

Thank you, Minister. The reality, though, is that the dismay and the consternation and the letters won't put food on the table of our aluminum and steel workers. The contract with BC Ferries could have done just that. I want to get into the facts. Will you call today, unequivocally, for the cancelling of the CIB, Canada Infrastructure Bank, loan that underpins this contract between BC Ferries and the Chinese shipyard? Will you call for it?

Hon. Chrystia Freeland :

You know that I have a lot of respect for you, but I disagree that instructing all the Transport Canada agencies to procure from Canada won't help. Of course it will help. This means that, going forward, they will be using steel, using aluminum and using lumber. The meetings of the shipbuilders and of the rail sector are really significant. For example, speaking this morning with John McCarthy, the CEO of Seaspan, we had a very substantive conversation about what it will take for him and his workers to be able to build ferries for Canada and what it will take for them to use Canadian steel.

I congratulated him on an MOU that he signed with Algoma in the middle of July to use Canadian steel in icebreakers. This is the kind of work we need to do—

Philip Lawrence :

You didn't answer my question. I'll give you the opportunity again to call unequivocally for the cancelling of the CIB loan.

Hon. Chrystia Freeland :

I have been compared to a ship, so I'll use a transport metaphor. I'm here as Minister of Transport and Internal Trade. I'll stay in my lane and answer the questions about the areas that I have responsibility for.

Philip Lawrence :

One more time: You are a high-ranking minister, and you've been in politics, as you said, for 12 years. You were the deputy leader and finance minister during the time when the CIB operated and when mandates were created. Will you call today, as a member of the government, as a senior minister, for the cancelling of the CIB loan?

Hon. Chrystia Freeland :

I have long been an advocate for buying Canadian and reciprocal procurement. I pointed to a policy statement that I published as finance minister in 2023. I published a reciprocal procurement approach in the fall economic statement of 2023, the budget of 2023 and the 2021 budget. I've been working on this for a long time. It's important.

The Chair :

Thank you very much, Minister. Thank you, Mr. Lawrence. [ Translation ] Mr. Lauzon, you have five minutes.

Stéphane Lauzon :

Thank you, Mr. Chair. Thank you to our witnesses for being here today. Minister Freeland, you've often spoken of your support for steel, aluminum and softwood lumber workers, but you also said in your presentation that this support would be provided to the extent possible. I have a question about that. When we talk about ferry transportation, the discussion primarily centres on British Columbia and the Atlantic provinces. In fact, Quebec also relies on ferries. Ferry services are extremely important and depend on Transport Canada. Can you tell us what support our government or your department can offer to Quebec ferries?

Hon. Chrystia Freeland :

Thank you for your question. As you know, we made an important announcement last Monday about federally supported ferry services, including the Magdalen Islands ferry. Starting today, passenger fares on those ferries will drop by 50%. This is good news for Magdalen Islanders, and I'm very pleased we did that.

(1240) Stéphane Lauzon :

Thank you. I really share your concerns about the contract awarded to a Chinese builder. I think we felt it. I'm a welder by trade and I feel like I represent Canadian workers in a way. The federal government has been an important partner of Quebec's shipbuilding industry, a sector that creates good jobs in skilled shipbuilding trades and other fields. At a time when our economy's steel, aluminum and softwood lumber industries are struggling, can you tell this committee how you intend to support shipbuilding and ship procurement in Quebec?

Hon. Chrystia Freeland :

Thank you for your question. We've already talked about the round table we're organizing. Davie shipyard will obviously be invited and will participate. It's very important to organize things so that we can build ships in Canada. It's also important that the marine, steel, aluminum and softwood lumber sectors work together. Canada's supply chains are undergoing major changes. We hear of changes in steel, aluminum and softwood lumber sector production. We have a duty to foster discussion among the manufacturing, steel, aluminum and softwood lumber sectors.

At the same time, we also have to ensure that the money of Canadians and Quebeckers spent on federal as well as provincial procurement goes to support our industries. That is my job.

Stéphane Lauzon :

Thank you. You mentioned an upcoming meeting with unions representing steel and aluminum workers and industry representatives. You want to include the unions because they represent workers. What can we expect this meeting to achieve? Will it lead to recommendations? Are you going to discuss the kinds of situations we've just experienced to prevent them from happening again? What will result from that meeting?

Hon. Chrystia Freeland :

My hope is that we'll discuss specific topics, like ship procurement and ship-related needs in Canada. We're going to invite all public and private agencies that use ships and discuss their needs and what they need to procure. We'll talk with shipbuilders and ask them about their capacity to build ships in Canada.

Stéphane Lauzon :

I assume that tariffs and their impact will also be discussed?

Hon. Chrystia Freeland :

That's right. We're going to talk with people in the steel, aluminum and softwood lumber sectors and ask them whether they have the capacity to—

The Chair :

Thank you very much, Minister and Mr. Lauzon. Mr. Barsalou‑Duval, you have two and a half minutes.

Xavier Barsalou-Duval :

Thank you, Mr. Chair. Minister, I'm pleased you're here today, but I wanted to get some answers. Your government has created expectations. The Minister of Industry said that the government would prioritize Canadian steel and aluminum for its major contracts, large construction projects and large infrastructure projects. You wrote a letter saying that you didn't want federal money to be invested in this project, yet later on, $1 billion in federal funds were invested. I'm sure you can understand why people are disappointed. You said yourself that you were disappointed.

Your government has created expectations and hope, and rightly so, at a time when steel and aluminum are facing 50% tariffs. Steel workers where I'm from would like more work. Estimates put the amount at about 30,000 tonnes of steel. That's the equivalent of one week's output at the ArcelorMittal plant in Contrecoeur. Under current circumstances, a week's output is no small matter. However, I get the impression that you're washing your hands of the matter. You say that you said what you needed to say at the time, I mean, that it's another department's responsibility, thank you very much, case closed.

You didn't even answer my question: When did you know that this money had been allocated? Did you find out on June 16, June 20 or June 26? Did you know about it when you wrote your letter?

(1245) Hon. Chrystia Freeland :

I've been very clear, and I still am: I'm disappointed in this decision. I asked the deputy minister of transport if she was committing departmental funds. We understood that funding by the Department of Transport was used only to support travellers. It was very important to me to check that this was the case. It's very important to me. I share your concern and I have—

Xavier Barsalou-Duval :

Can you at least confirm that, when you wrote your letter on June 16, you were unaware that federal money had been invested in this project?

Hon. Chrystia Freeland :

—responsibilities, and—

Xavier Barsalou-Duval :

You can't even answer that.

Hon. Chrystia Freeland :

—it's very important to me to ensure that the agencies under my control are going to prioritize Canadian workers in the steel, aluminum and softwood lumber sectors under their procurement contracts, and—

Xavier Barsalou-Duval :

Did you know on June 16 that there would be federal funds for that?

Hon. Chrystia Freeland :

—I want to assure you that we will do that.

The Chair :

Thank you very much, Minister. Thank you, Mr. Barsalou‑Duval. [ English ] We go back to Mr. Lawrence. Mr. Lawrence, the floor is, once again, yours. You have five minutes, sir.

Philip Lawrence :

I give my time to Mr. Albas.

Dan Albas :

Thank you, Mr. Chair. I appreciate that. Minister, you mentioned your conversation with the president of Seaspan. In The Globe and Mail, he argued that it's tax policy and red tape that prevent him from being competitive in this space. If you're not willing to cancel this loan agreement, will you work instead to lower taxes to help make Seaspan competitive, so that it can actually compete in this space?

Hon. Chrystia Freeland :

I had a very good conversation with the CEO of Seaspan. He's very enthusiastic about the meeting we're going to have. He mentioned to me that Canadian workers earn more than workers in other jurisdictions. They do, and that is a good thing. We want him to be providing good, high-paying jobs, and he does, and I told him that I absolutely understand and support that. We committed together to working hard to get Canadian ferries to use Canadian steel and build at Canadian shipyards, including Seaspan.

I did congratulate him on an MOU that he signed with Algoma Steel a couple of weeks ago, to get Canadian steel into the icebreakers that he is building. We need to get beyond talking points and talk about rewiring the supply chains in our country. We have to support our steel and aluminum sectors and softwood lumber, and that means convening conversations with Canadian manufacturers to ensure that our steel, aluminum and lumber sectors are producing the products that our manufacturers need. Governments do have a role to play here, ensuring that we are placing the orders there. I want to go back to Mr.

Lawrence, because I worry about those same workers. These conversations can be really important, because, if we get orders placed now, then that fills up the order books of our steel mills and aluminum smelters. It gives them the confidence to keep on operating.

Dan Albas :

Well, Minister, again you have an opportunity. You could say, no, we don't want to have an industrial carbon tax that will put our steelworkers at a disadvantage. That is something that your government has said it wants to do. Minister, do you support the review of the remission framework by the Prime Minister to target cheap foreign steel that comes from countries like the PRC?

(1250) Hon. Chrystia Freeland :

I was very glad as finance minister to announce last June that for the first time, Canada would be putting tariffs of 25% on Chinese steel and 100% on Chinese EVs. We announced that last June. We had a consultation, and in October of last year, those tariffs went into place for the first time. This is an issue that I've worked on for a long time, and I have a lot of conviction there—

Dan Albas :

Eric McNeely is the president of the BC Ferry and Marine Workers' Union. He wants to know why your government will say that it will put tariffs of 25% on cheap steel from countries like China, yet it seems like you're going to let this one go by tariff-free. Think of all the aluminum and all the steel for all the components that go into making these ships, Minister. What do you have to say to Eric McNeely and the people he represents?

Hon. Chrystia Freeland :

The voice of labour in these issues is absolutely essential. That's why, at the shipbuilding meeting we are convening, we will be inviting unions to participate. It is absolutely important right now, given the tariffs the Canadian steel sector is facing, for us to find uses for Canadian steel in Canada. I am utterly committed to doing that.

Dan Albas :

Minister, you know, those steel and aluminum tariffs were threatened by Donald Trump months ago, yet it's only now that this committee started to put the heat on that you started this made in Canada approach with groups that are underneath your watch. You won't say that we want to cancel the industrial carbon tax. You won't say that you're going to cut red tape and be competitive. You're totally silent when it comes to the loan of $1 billion by the Canada Infrastructure Bank to offshore, effectively, Canadian jobs in steel, aluminum and shipbuilding. Everything you're offering here, Minister, is talk.

You have failed the test. It's August 1. We have an executive order that's come in. You come to this committee and you talk, talk, talk. You're not willing to do the basics—

The Chair :

Thank you, Mr. Albas.

Dan Albas :

No, let me just finish here.

The Chair: You've run over your time by 20 seconds.

Dan Albas: The basics were standing up for Canadian workers. This was your opportunity. You and your government have failed.

The Chair :

Thank you very much, Mr. Albas. Next we'll go to Mr. Greaves, who is joining us online. Mr. Greaves, the floor is yours. You have five minutes, sir.

Will Greaves (Victoria, Lib.) :

Thank you very much, Mr. Chair, and good morning to colleagues. Good morning, Minister. Thank you so much for joining us today. I'd like to maybe take a step back and ask you some questions about the sector more broadly rather than taking the same line of questioning my colleague has been pursuing. We know that the government has been making historic investments in Canada's marine sector, including in shipbuilding, with a variety of projects for the navy, the Canadian Coast Guard and others.

We also know that no Canadian companies submitted a bid for this BC Ferries contract, largely due to the volume of work they already have under contract in the three major shipyards across Canada. Minister Freeland, could you perhaps speak to how the federal government is going to support increasing the capacity for Canadian shipbuilding in the future and how this might have a positive impact on future procurement decisions for BC Ferries and other vessel providers across the country?

Hon. Chrystia Freeland :

Thanks for being here. I know that you represent constituents for whom this is a very important and live issue, so I'm really glad that you're with us. It is a great question. The national shipbuilding strategy, which various governments have been working at for a long time, is really bearing fruit, and this is a really good thing. Canada has built up shipbuilding capacity. This is in our strategic and national economic interest.

What we need to do now is work very hard to connect our shipbuilders with the sectors that are under threat—steel, aluminum, softwood lumber—and we need to connect them with the procurement decisions of Canadian entities: the federal government, the provincial government and private sector entities. We need to have that strategic plan with everyone, including labour, at the table. That's why I'm really excited about this meeting that we're organizing, with shipbuilders, all of the ferry operators—private and public—the federal government, the provinces, labour, steel and aluminum.

We're going to sit down and look at, “What are the order books? What kinds of ferries do we need? Who needs ferries? Who is able to build them, and are we able to use Canadian steel and aluminum in that construction?” Mr. McCarthy, the CEO of Seaspan, is very enthusiastic about that conversation. I am too. This is the moment when we really, in a significant way, need to rewire the Canadian economy. I have been a believer in reciprocal procurement for a long time. That's why I first published an intention to develop that policy in the 2021 budget and followed through with a policy that was published in 2023.

As transport minister, I am totally committed to acting on it.

(1255) Will Greaves :

Thank you for that response, Minister. As you just noted, BC Ferries plays a vital role for many communities in British Columbia, including my own riding of Victoria. I dare say I'm the only member of this committee who regularly travels on BC Ferries—I've ridden the ferry twice this week—so this is something that is near and dear to our hearts and livelihoods here on Vancouver Island and all over southern B.C.

My constituents regularly face struggles with aging ferries, service delays and the costs associated with those—costs for both BC Ferries itself but also individual consumers, who lose time with their families if they get stuck on ferries or delayed by sailings because there aren't enough vessels to meet the demand that we have here on the coast. I'm certainly concerned, as you are, that BC Ferries chose not to build these new vessels in Canada.

However, I'm also deeply aware that we desperately need new ferries in order to meet the needs of British Columbians, and I'm concerned about the prospect of delaying the replacement of the aging fleet that, really, we rely on here. I note that my Conservative colleagues really are playing politics here with what is critical infrastructure and service in British Columbia, and they seem intent on stopping the delivery of new ferries to B.C. in order to fulfill their aim of reducing government support for major transportation projects in Canada.

In that vein, could you please share with this committee how, in your capacity as Minister of Transport and Internal Trade, you and your team will support British Columbians and BC Ferries, who are concerned about the aging ferry fleet and are deeply focused on the need for reinvestment in ferry service in order to meet the needs in our daily lives?

Hon. Chrystia Freeland :

It is really good to have, as part of the conversation, someone who rides on these ferries regularly. As you know, the federal government, as part of a 1977 agreement, provides operating support to help defray the cost of running those ferries, and it's good that the federal government does that. I share your concern about playing politics, and I'm going to just suggest that maybe all of us call on the better angels of our nature. This is a moment when we have to play as team Canada, and while, obviously, we disagree about a lot of things, I think there is actually lot of agreement around this table.

All of us are saying that we need to support steel, aluminum and lumber; that these are sectors that are facing not just an unfair threat but an unfair attack; and that we have to reorganize procurement at the federal and provincial levels to ensure that we are supporting Canadian manufacturing jobs and the steel, aluminum and lumber sectors. While I agree that politics are political, I hope that the basic point is one that we can agree on and work on together to achieve, because our workers, economy and national sovereignty depend on it.

The Chair :

Thank you very much, Minister. I'm trying to keep us on time here. We have room for one more question from Mr. Lawrence and one more question that we will provide the opportunity for Mr. Kelloway to ask. Mr. Lawrence, the floor is yours for one question, please.

Philip Lawrence :

Thank you. In your letter earlier this year, you said, “I am dismayed that BC Ferries would select a Chinese state-owned shipyard to build new ferries in the current geopolitical context, and I ask that you verify and confirm with utmost certainty that no federal funding will be diverted to support the acquisition of these...ferries.” It has since come to light that $1 billion of federal funds will go to support the purchase and construction of these ferries. Will you call today for the cancellation of the loan to BC Ferries?

(1300) Hon. Chrystia Freeland :

I've been very clear that I share the dismay, which I think is shared by all members of this committee, about that procurement. In my capacity as Transport Minister, I have done everything under my authorities to ensure, first of all, that operating funding is used for operations only, and second—and I think even more importantly—that, in procurement decisions taken while I am transport minister, we are supporting Canadian manufacturers, steel, aluminum and softwood lumber, and working together to get a real strategy to do that in shipbuilding and in rail.

The Chair :

Thank you very much, Minister. Our final question for you today will come from Mr. Kelloway. Mr. Kelloway, the floor is yours, sir.

Mike Kelloway (Sydney—Glace Bay, Lib.) :

Thank you, Mr. Chair. Minister, there's been a lot of talk today about the provincial procurement process. I really believe that all of us on this committee, including elected leaders in B.C., agree that every government must re-evaluate its procurement policies to ensure that we're supporting Canadian workers, businesses and the economy. God knows the world has changed over the last few months. It changes on a daily basis, especially when you look at the tariffs that are coming from the Americans.

You talked about this in your opening statement, but, if you can, I want you to elaborate on it in the time that we have. For years you've been working to advance reciprocal procurement here in Canada, so that we're not benefiting our adversaries but supporting Canadians. Could you speak about your work to advance reciprocal procurement and what that means for Canada?

Hon. Chrystia Freeland :

Thank you for joining us, Mr. Kelloway. Since this is the transport committee, I want to thank you for your work on getting those tolls lowered. That comes into effect today, and I know it's going to be really meaningful for the people you represent. Thank you for your hard work on that. Now is a moment when we have to really, in a profound way, rewire the Canadian economy. It has to start with procurement. As I mentioned, I have been an advocate and have really been thinking about how we need to change our procurement policy.

We need to go to a reciprocal procurement policy, a buy Canadian policy in which we support Canadian workers and our sectors that are being hard hit and, where we cannot buy Canadian, seek to buy from countries with whom we have a reciprocal procurement agreement. We need to do that urgently. It is a different approach from the one that previous Canadian governments have taken. That's why I wrote 71 letters, in June, to the agencies controlled by Transport Canada, and said that we have to change how we do things.

I do want to point out that specific attention has, quite rightly, been paid to steel, aluminum and lumber. These industries are going to have to be brought into a conversation with manufacturers and government procurers at all levels, so that they can be producing the inputs that the manufacturers need. That's a conversation we have to have urgently. As we do that, they can fill up their order books going forward. That is going to provide the security for the workers and families whom Mr. Lawrence, quite rightly, invoked.

The Chair :

Thank you very much. Thank you to Madame Hébert, Mr. Thangaraj and, of course, you, honourable minister, for your testimony here today. We wish you a great rest of your day. Colleagues, I'm going to suspend for two minutes in order to welcome our next witness, Minister Robertson, and, of course, his team. The meeting is suspended.

(1300) (1310) The Chair :

I call this meeting to order. Colleagues, allow me to welcome the Honourable Gregor Robertson, Minister of Housing and Infrastructure. He will be appearing before us for the next hour. Welcome to you, Minister. Accompanying the minister is Paul Halucha, deputy minister of housing, infrastructure and communities. Welcome to you, sir. Thank you for taking the time to appear before us today. Minister, you have five minutes for your opening remarks. We're very tight for time, so I'll turn the floor over to you. Please proceed.

[ Translation ]

Hon. Gregor Robertson (Minister of Housing and Infrastructure) :

Thank you, Mr. Chair. [ English ] Mr. Chair, I'd like to thank you and the committee for your time today. As Minister of Housing and Infrastructure, I'm here to speak primarily about the Canada Infrastructure Bank, the CIB, and its role in supporting and investing in Canada's infrastructure. [ Translation ] Canada is faced with a generational infrastructure challenge. Whether in terms of housing, clean energy, public transit or trade corridors, we need to build on a scale not seen for decades. [ English ] To meet this historic challenge, we need to do more to leverage public and private investment and spending.

We have to use the national books to mobilize private capital into public interest infrastructure that connects our communities, that protects our planet and that supports long-term economic growth. We need to do it in a way that respects the jurisdictions, that protects taxpayers, and that delivers results, obviously. The Canada Infrastructure Bank exists as a key tool in the federal tool box to invest in the public interest. It will continue to play a critical role in Canada's infrastructure future. The CIB's mandate is clear.

It's to help close the infrastructure gap and mobilize private investment for the public interest, accelerating the kinds of large-scale, complex projects that otherwise wouldn't get built on time or at all. To this end, the CIB has now committed over $16 billion across more than 102 projects, including zero-emission transit, broadband for rural indigenous communities, and clean power transmission lines, enabling infrastructure for new housing. This has attracted over $19 billion in private and institutional capital, meaning that more infrastructure is able to get built.

Most of these investments are already under construction. A number are completed and delivering in value for Canadians by driving Canada's GDP. They're creating local jobs and delivering clean Canadian electricity to residents and businesses. Because the bank operates at arm's length from government, its board is responsible for investment and operational decisions. That independence is important, as it gives the partners the confidence to bring forward projects and ensures that infrastructure investments are grounded in sound analysis and commercial rigour without political interference.

This model has delivered results, but it also means that decisions on specific transactions, like the BC Ferries credit agreement that we're discussing here today, are not made by me or by the Government of Canada. Let me speak briefly regarding BC Ferries. As you know, the CIB entered into a credit agreement with BC Ferries to support the modernization of its fleet and the electrification of terminal infrastructure. To be clear, this is support that is desperately needed. As a British Columbian, I will strongly reinforce that piece.

The aging ferries threaten the commutes and the accessibility to local communities. Residents and visitors should be able to count on safe, reliable, affordable passage across the region on the Salish Sea. It's a significant investment in clean transportation, aligned with both federal and provincial goals. The choice of shipbuilder, however, was not made by the federal government or by the CIB. That decision was made by BC Ferries, who conducted their own global procurement process. To be clear, the Government of Canada had no role or say in the procurement decision.

I understand from briefings with officials that the process did not yield bids from Canadian shipyards. While the final procurement decision was made by BC Ferries, it has understandably drawn criticism. The lack of Canadian bidders in the process has also raised concerns. As someone from B.C., as a minister, I am disappointed in this. I want to see more Canadian-built vessels, more Canadian jobs and more opportunities for domestic industry to participate in major infrastructure projects.

Looking forward, our new government is at work to ensure that building ships like these happens in Canada, using Canadian workers and Canadian materials. That's why we're looking closely at how we better align our industrial policy, our procurement tools and our investment incentives to support and scale up Canadian capacity in important sectors like shipbuilding.

At the same time, we should not lose sight of what the CIB stands to do for our national interest or of what this project means for British Columbia residents and communities—lower emissions, stronger public infrastructure, and long-term benefits for people in B.C., including hundred of millions of dollars in Canadian-based maintenance upgrades and service support over the life of these vessels.

(1315) In closing, I want to thank the committee for its time and to recognize the work of taking on this important issue and asking the tough questions. As a government, as a country, we are at a historic moment that demands both bold thinking and decisive action, and Canadians are counting on us to get homes built—first and foremost, on my side—and to deliver on the infrastructure that our economy and communities depend on, whether it's ferries on the west coast or trade corridors that connect the country. That's the real work in front of us, and we won't get there by doing things the old way.

We need new partnerships, new financing and a sense of urgency, and the CIB is helping make that happen. It has a proven track record of success in mobilizing billions of dollars of investment, supporting projects that otherwise wouldn't get built. We're going to keep pushing to get more projects off the ground, more jobs created and, importantly, more results delivered for Canadians. Thank you, Mr. Chair.

[ Translation ]

The Chair :

Thank you, Minister. [ English ] Thank you very much for your opening remarks. We'll begin our line of questioning today, Minister, with Dr. Lewis, who is joining us online. For that, I turn the floor over to you, Dr. Lewis. You have six minutes, please.

Leslyn Lewis (Haldimand—Norfolk, CPC) :

Thank you, Minister, for your statement. Minister, with the failure of this Liberal Prime Minister to get a trade deal for Canadians to avoid the unjustified U.S. tariffs, and at a time when Canadian workers and industries are facing deep uncertainty, do you support the decision of BC Ferries to give jobs to Beijing workers, thereby preferring foreign workers over Canadian workers, yes or no?

Hon. Gregor Robertson :

I'm very disappointed by the decision and the fact that this procurement will not benefit as many Canadian workers as we all wish it would. I think that disappointment is shared widely across the country. That said, these ferries need to get built. They need to be in service for the people of B.C., as member of Parliament Will Greaves said earlier. This is really critical investment that needs to happen as soon as possible. We can take some solace in the investment that is happening in Canadian jobs around the maintenance and around the terminals. It is a significant investment, but I think we're all disappointed that the procurement went to shipyards overseas.

Leslyn Lewis :

Minister, my question asked for a yes or no answer. It was, essentially, whether or not you support this decision. In addition, I would like to ask a question pertaining to the fact that BC Ferries said that it actually consulted with your government before signing the contract with the Chinese state-owned shipyard, yet you deny that your government and the CIB knew of the contract. Who's telling the truth? Are you, or is BC Ferries telling the truth?

Hon. Gregor Robertson :

Again, Mr. Chair, I was disappointed by this decision. This decision predates my serving in government. It was prior to this last election and certainly prior to my appointment as minister. The CIB is independent of government and makes investment decisions without political interference, as I said earlier. Secondly, there were no Canadian bids for this work. I'm sure folks around the table...we would all like to see this work happening in Canada. There were no bids for that to happen, and BC Ferries made the decision that it made.

Leslyn Lewis :

Minister, have you seen the terms of the loan to BC Ferries from the CIB, pertaining to the shipyard in Beijing? Have you seen those terms?

Hon. Gregor Robertson :

I have not seen the specific terms of the agreement. Again, the CIB is independent. There is no political interference in the decisions made by the board of the CIB, the Canada Infrastructure Bank, around these decisions.

(1320) Leslyn Lewis :

Minister, our government gives the CIB $35 billion of taxpayers' money, so I'm sure that taxpayers expect some sort of oversight. You're telling the public that, as a minister responsible for the Canada Infrastructure Bank, you have not seen the specific terms and conditions of this billion-dollar loan agreement.

Hon. Gregor Robertson :

The Canada Infrastructure Bank is independent of government. It's at arm's length from government. It was funded by the government—$35 billion, as you mentioned—and it is doing business as a bank. The only way that investors, private investment, will have confidence in that bank is if it's independent of political interference. We certainly see a different story transpiring south of the border, where there is a lot of political interference in the affairs surrounding the government and with arm's-length agencies. That has a destabilizing effect on the market, and on private investment in particular.

Having the confidence in the decisions that are being made by an independent board that is not affected by political interference—

Leslyn Lewis :

Yes, but Minister, these private investors are investing in the Canadian economy, and

section 6 of the CIB mandate promotes the Canadian economy, so there are public funds that are being invested here and you are telling me that, given what has happened, the fact that a foreign company is getting public funds of $1 billion dollars, you have not asked the CEO of the CIB to disclose what other public funds may be going to foreign companies. Is that what you're telling me?

Hon. Gregor Robertson :

To the chair, it's not clear. Is the question about funds to other companies or...?

Leslyn Lewis :

Other countries....

Hon. Gregor Robertson :

Other countries beyond the BC Ferries procurement, is that the question?

Leslyn Lewis :

Yes. My question, to be clear, is, given what has happened, have you asked the Canada Infrastructure Bank CEO to disclose what other public funds may be going to foreign companies? Since you are so disturbed by what has happened, have you ensured that this is not happening in other situations, yes or no?

Hon. Gregor Robertson :

To the chair, almost all of the investments that have been made public by the Canada Infrastructure Bank are domestic investments in Canadian infrastructure. I spoke a number of times with the CEO of the Infrastructure Bank, as well as the board chair, once I learned of the financing that happened. I've had a number of conversations, and we have several steps forward to make sure that buy Canada is a critical element of the policy that informs the CIB going forward.

The Chair :

Thank you very much, Minister. Thank you very much, Dr. Lewis. Next we go to Ms. Nguyen. Ms. Nguyen, the floor is yours. You have six minutes, please.

Chi Nguyen :

Thank you very much, Mr. Chair. Thank you, Minister, and deputy minister as well, for joining us today for a really important conversation about the investments for our future. As we're thinking and talking about this, this decision has been taken. I wonder whether you could talk about tools or other conditional supports, such as domestic content requirements or capacity-building incentives, that could be built into future CIB financing agreements and would allow us to grow our Canadian industry and avoid missing opportunities like this in the future?

Hon. Gregor Robertson :

Certainly, going forward, as I believe the members heard from Minister Freeland, we are making robust efforts to ensure that buy Canada is the clear direction for all of our investments. With the Canada Infrastructure Bank, effectively, there's policy direction that comes from government. They are an independent agency and manage their affairs as such, but we're in a process now of looking at maximizing Canadian materials, opportunities for Canadian workers and the benefits for Canada in all of their investments going forward, as part of that policy direction that is being renewed.

I know, from Minister Freeland directly, that she is looking at that across the activities of Transport Canada. I'm certainly doing the same with Housing and Infrastructure Canada, looking at that same direction, ensuring that we're doing everything we can, across all of our functions and procurement, to maximize benefit for Canadian workers and Canadian materials. Obviously, there are lots of Canadian materials and workers involved in housing and infrastructure.

We certainly want to see significant benefits for steel, aluminum and lumber—Canadian wood—which are all key components in housing and infrastructure procurement and investments. There are enormous opportunities to scale this up as a country, in similar fashion to what many other countries are doing, given the current trade environment. Much has changed in these last six months, and we have to move urgently. We have to move definitively to make sure we're doing everything we can to benefit Canadians.

(1325) Chi Nguyen :

Thank you. Could you speak a bit about how your department and CIB can work together more collaboratively to make sure that the Canadian companies in those sectors are better positioned to compete for projects, such as the things we're hoping to build and do boldly in our country?

Hon. Gregor Robertson :

Again, as Minister Freeland was mentioning, there's a lot of engagement already, from our respective ministries, with Canadian companies around the opportunities, going forward, with procurement, particularly those that our departments have jurisdiction over. The Canada Infrastructure Bank is independent of government, much like the Business Development Bank of Canada or the Export Development Bank of Canada. They have to make their decisions through their boards and CEOs. We are able to give policy direction, as government, and we are laying that out very clearly, that future investments....

I put this all in the same context as.... We look at the 102 projects that CIB has funded, and the lion's share of those are investments in Canadian infrastructure that many Canadian businesses, workers and contractors have benefited from. In recent years, we're talking about tens of billions of dollars in benefits for Canadians on the ground, whether they're the Montreal and Calgary airports that are invested in, or whether it's the broadband in Manitoba, Alberta or here in Ontario.

We've seen critical mineral infrastructure in Quebec and Labrador, and many investments across the country, including in the steel industry—Algoma Steel, the retrofit that happened there. We've seen many direct investments by the CIB that are benefiting Canadian workers and businesses. We need to see that continue and, if anything, intensify, and do everything we can so those deals benefit Canadians.

The Chair :

Thank you very much, Ms. Nguyen. [ Translation ] Mr. Barsalou‑Duval, you're the next speaker. You have six minutes.

Xavier Barsalou-Duval :

Thank you, Mr. Chair. Thank you, Minister, for joining us today. I'll start with a brief question. When were you made aware of the Canada Infrastructure Bank's involvement in the BC Ferries plan to have its ships built in China?

Hon. Gregor Robertson :

Thank you for your question. [ English ] I became aware on the night of June 11. I was in a committee of the whole meeting with my deputy, Paul Halucha. We found out that night that there had been a deal made between the CIB and BC Ferries.

[ Translation ]

Xavier Barsalou-Duval :

When you heard this news, did it occur to you to tell the Canada Infrastructure Bank that it was a bad idea?

[ English ]

Hon. Gregor Robertson :

Yes, I spoke with the CEO of the CIB the next morning. I made a call the next morning. We finished the committee of the whole at 11 p.m., I think, that night. The next day I was in a conversation with the CEO of the Infrastructure Bank to find out and to clarify what had happened and what recourse or opportunity there might be to reverse direction on that financing. After that was a sequence of meetings with the CEO and board chair along those same lines, to see what could be done—or undone, in this case—to maximize the benefit for Canadian workers and shipbuilders.

That's when I was informed of the fact that this deal had been advanced earlier in the year and was not to be turned around at that point. The deal had been executed. I had a sequence of meetings around that with the CIB CEO and board.

(1330) [ Translation ]

Xavier Barsalou-Duval :

As I understand it, you found out on June 11 that the Canada Infrastructure Bank had decided to provide $1 billion in funds for ships to be built in China. Then, on June 12, you met with the president of the Canada Infrastructure Bank, who somehow told you that the agreement had been signed, all decisions had been made and nothing further could be changed at that point. Later, on June 16, Minister Freeland wrote a letter saying that federal funds should not be spent on this project. Were the two departments not consulted at that time? Did you not tell her later on that her letter was a mistake? Don't you find that a bit hypocritical or strange?

[ English ]

Hon. Gregor Robertson :

The funding from Transport Canada is operational funding to BC Ferries. It's completely separate from the investment, the lending, from the Infrastructure Bank. She clarified her concerns about the investment coming from Transport Canada, which is a long-standing operational transfer that happens between Transport Canada and BC Ferries, as I understand it,

whereas the Canada Infrastructure Bank financing was a completely separate and independent deal.

[ Translation ]

Xavier Barsalou-Duval :

When did you speak with Ms. Freeland to let her know about the Canada Infrastructure Bank's involvement in procurement of the vessels?

[ English ]

Hon. Gregor Robertson :

We were out of session. It would have been after her letter was out. We spoke after her letter. She informed me that she had sent a letter to the B.C. Minister of Transportation and gave me a quick readout on that. At that point, we had an exchange about the Infrastructure Bank financing.

[ Translation ]

Xavier Barsalou-Duval :

You didn't want to let the public know that Ms. Freeland's letter was a bit unnecessary, since a federal agreement was already in place to fund the vessels?

[ English ]

Hon. Gregor Robertson :

Through the chair, I'm not clear what you mean by informing the public. I think Minister Freeland's letter was public within days of it being transmitted.

[ Translation ]

Xavier Barsalou-Duval :

In short, the letter was essentially pointless. Ultimately, it was all smoke and mirrors, because the decision to fund these vessels with federal money had already been made. You could have let the public know. Why didn't you?

[ English ]

Hon. Gregor Robertson :

Minister Freeland had her letter as Minister of Transport. She was acting on behalf of her department, sharing her concerns and clarifying the funding that is between Transport Canada and BC Ferries. The Infrastructure Bank financing was a completely separate deal. I don't know what she could have clarified about that or what my role could have been in that.

[ Translation ]

Xavier Barsalou-Duval :

Most people expected that this project wouldn't involve any federal money. Ms. Freeland's letter, which was all over the papers, led us to believe that the federal government would ensure that a project to help China's shipbuilding industry wouldn't receive any federal funding. We now understand that this letter was meaningless. As a government representative, you then failed to set the record straight by letting the public know while the House was sitting. Moreover, the Canada Infrastructure Bank issued its press release on June 26, when the House was no longer sitting. Is that a coincidence?

(1335) [ English ]

Hon. Gregor Robertson :

The details of the BC Ferries-CIB agreement were public on June 13. Those were posted prior to Minister Freeland's letter. I'm not sure what the member is driving at here in terms of the sequence there.

The Chair :

Thank you very much, Minister. [ Translation ] Thank you, Mr. Barsalou‑Duval. [ English ] Next we'll go with Mr. Gunn. Mr. Gunn, the floor is yours. You have five minutes, sir.

Aaron Gunn (North Island—Powell River, CPC) :

Thank you, Mr. Chair. Mr. Minister, I just want to confirm first the dollar amount of the taxpayer subsidy in the form of the loan from the Canada Infrastructure Bank to BC Ferries. It's $1 billion, correct?

Hon. Gregor Robertson :

That's my understanding, yes.

Aaron Gunn :

Do we know how many jobs that $1 billion from taxpayers is going to create in China?

Hon. Gregor Robertson :

You would have to ask officials in China, I think, related to that company. I haven't seen numbers related to that procurement.

Aaron Gunn :

Do you think it's a good use of taxpayers' money to offshore Canadian jobs in another country, particularly one that's adversarial to our own?

Hon. Gregor Robertson :

I certainly want to see Canadian jobs created as much as possible in all of the infrastructure investments, and obviously in the housing investments, that we do. I also respect the independence of the Infrastructure Bank. It's created to be independent of political interference.

Aaron Gunn :

I mean, you say that the bank is independent, but it's also true, is it not, that under

section 8 of that act you appoint the board, under

section 9 you appoint the CEO, and under

section 17 you approve its annual budget? Don't you think that if we're shelling out $1 billion in taxpayer money, there should at least be a Canadian content requirement?

Hon. Gregor Robertson :

Through the chair, I think what the member is suggesting I agree with. In terms of my direction going forward, as the new minister and with the opportunity to give policy direction, it's very clear that I cannot and will not interfere in the business of the Infrastructure Bank. It is an independent agency. In policy direction, though, I will be giving clear direction: for Canada, by Canada, and benefiting Canadian workers and Canadian materials—

Aaron Gunn :

I appreciate that answer, Minister. Are you then basically admitting that it was a mistake for the government not to have that policy direction in place prior to this agreement being signed in March?

Hon. Gregor Robertson :

In terms of prior governments, they were operating in a very different context. We've seen a lot of change in the world in the last six months. Certainly, there has been a change in government. We are a new government. I'm taking direction from my Prime Minister and all his efforts to work for Canadians and Canadian jobs in our trade affairs and our investment going forward.

Aaron Gunn :

Minister, some things have changed and some things have not. I'll ask you a couple of quick yes-or-no questions. Would you agree that the People's Republic of China is a dictatorship?

Hon. Gregor Robertson :

I'm here to speak for my ministry and not to make geopolitical assertions.

Aaron Gunn :

It's a pretty basic question. I mean, if we're giving $1 billion in taxpayer money to a state-owned company, we should probably be on the same page as to whether this country is a dictatorship or not.

Hon. Gregor Robertson :

Through the chair, I want to clarify that the Government of Canada made an investment and created an infrastructure bank that is at arm's length from government to invest in infrastructure here in Canada. We do not have direction on what those investments are specifically. We trust that to a board—

Aaron Gunn :

Minister, do you like President Xi's chances in the next election?

Chi Nguyen :

I have a point of order.

The Chair :

One moment, everybody. Mr. Gunn, I'll pause your time. You have roughly one minute left. Ms. Nguyen.

Chi Nguyen :

I'm just curious to know how this is relevant to the conversation we're having about BC Ferries—

Aaron Gunn :

We're giving $1 billion in taxpayer money to a country that is a dictatorship, that is abusing human rights. I think it's relevant.

The Chair :

It's a valid point of order on that particular question, Mr. Gunn. Let's try to make sure that we use the time we have with the minister to ask questions relating to the BC Ferries contract. I'll turn the floor back over to you, Mr. Gunn, and ask you to be more specific about issues relating to the BC Ferries contract.

Aaron Gunn :

I think this is very specific. Minister, do you believe that the People's Republic of China is currently engaged in unfair trade practices and tariffs against Canadian agricultural and seafood sectors?

Hon. Gregor Robertson :

Through the chair, I certainly will speak strongly in favour of Canadian agriculture and Canadian workers. Our industries should come first. This procurement happened through BC Ferries. It's not a decision that the Government of Canada had anything to do with.

(1340) Aaron Gunn :

You're subsidizing it with $1 billion in taxpayer money, are you not, Minister?

Hon. Gregor Robertson :

Through the chair, this investment from the Canada Infrastructure Bank is in BC Ferries. It is a loan to BC Ferries for a procurement that they've done. It is not the Government of Canada making these decisions. It is the Infrastructure Bank financing BC Ferries. BC Ferries made the decision on the procurement.

Aaron Gunn :

Minister, it is the Government of Canada and your department that set the policies that guide the bank, which then invests, or lends at below-market interest rates, taxpayers' money. Do you agree with the Prime Minister of this country that China is Canada's biggest national security threat?

Hon. Gregor Robertson :

I don't see where that comes into play. It's a BC Ferries procurement decision.

Aaron Gunn :

Mr. Minister, we're giving them $1 billion in taxpayer money to subsidize a dual-use civilian and military industry.

The Chair :

Thank you, Mr. Gunn. [ Translation ] The next speaker is Mr. Lauzon. You have five minutes, Mr. Lauzon.

Stéphane Lauzon :

Thank you, Mr. Chair. Minister, thank you for joining us today. We're honoured to have you here. You spoke briefly about the current infrastructure deficit affecting ferries and the urgent need to take action. You also said that the responsibility for awarding contracts falls to BC Ferries, with the support of the Canada Infrastructure Bank. Can you elaborate on the infrastructure deficit? Why is there an urgent need to give British Columbians good ferry service?

Hon. Gregor Robertson :

Thank you for your question. [ English ] As someone who has used B.C. ferry services on a very regular basis for all of my life, I think it's critical that BC Ferries operates its fleets, particularly the big ships that go back and forth to Vancouver Island between Horseshoe Bay and Nanaimo, and between Tsawwassen, Duke Point and the Saanich Peninsula. These are critical links on the west coast. Vancouver Island's population has grown dramatically in my lifetime, and these ships have been operating this entire time.

There are certainly very significant disruptions to service that affect people in B.C. and tourists coming through B.C., getting stuck at B.C. ferry terminals because the old ships are having challenges. There is a significant deficit, in terms of B.C. ferry assets, which it is working urgently to resolve, so this disruption in service does not impact so many Canadians on the west coast. I think new ferries will be warmly welcomed. Many of us, probably all of us in B.C., are disappointed that we aren't manufacturing, we aren't building, those ferries for B.C. in B.C., or at least in Canada for B.C.

However, first and foremost, we have to have safe, secure and reliable transportation. It's a massive transportation link on the west coast. It's the busiest ferry operation on the planet right now in terms of volume for comparable routes. This investment is very critical for Canadian transportation infrastructure writ large. Certainly, the needs are very high right now, and the new ferries can't come soon enough.

[ Translation ]

Stéphane Lauzon :

Can you talk a bit about how service disruptions affect carriers? Ferries aren't just for passengers or travellers. They're also used to transport goods. Industries depend on these ferries. Business people from all over the place, including Nanaimo, also depend on various producers or companies in order to sell goods. Can you talk about how a service disruption could affect these ferries?

Hon. Gregor Robertson :

I want to thank the member for his question. [ English ] You're very right to point out the importance of the trade links and the trucking that takes place on these ferries. The whole lower deck of these ferries, the centre of the lower deck, is full of trucks all the time. The disruption to the ferry service impacts business and trade and costs us jobs, effectively, when things go wrong, which is increasingly frequent with these aging ships. There's a significant cost to the Canadian economy in not having reliable ferries on the west coast serving Vancouver Island. People are an important part of this.

Vancouver Island is an enormous tourist destination. Many tourists go back and forth on the ferries. It's considered a real highlight to go back and forth on the ferries. It's a very good-value cruise ship type of experience, basically, without having to go on a cruise to Alaska. You can take the ferries over to Vancouver Island. They are very busy. It's incredibly disruptive when people end up spending hours or half their day waiting for broken ferries to operate. Once there's a service disruption, the rest of that day and sometimes the next day will be disrupted as well, for both the trade and tourism sides.

It's a big hit for the Canadian economy.

(1345) [ Translation ]

Stéphane Lauzon :

Business is bad.

The Chair :

Thank you, Mr. Lauzon and Minister Robertson. Mr. Barsalou‑Duval, you have the floor for two and a half minutes.

Xavier Barsalou-Duval :

Thank you, Mr. Chair. On June 2, two weeks before the Canada Infrastructure Bank announced that it would fund shipbuilding in China, Mélanie Joly stated that Ottawa would commit to using Canadian steel and aluminum in its national infrastructure and defence projects. This announcement was all over the media. She went on tour to discuss it and to say how much support the steel industry would receive. Two weeks later, we learned that the Canada Infrastructure Bank would instead fund the construction of ferries made using steel from China. When Ms.

Joly made this announcement and went on her media tour, I don't suppose that it occurred to you that your department could develop internal policies to ensure that her comments were put into practice. Have you issued any instructions to your department, Housing and Infrastructure Canada, to ensure that Canadian steel and aluminum are used in the infrastructure projects funded?

Hon. Gregor Robertson :

Thank you for your question. [ English ] On the decision that was made to finance BC Ferries, my understanding is that it was made in March, earlier this year, prior to the election and the new government being elected, so the financing was done. The CIB agreed to the terms of that with BC Ferries. There is no opportunity in June or July to turn back the clock.

[ Translation ]

Xavier Barsalou-Duval :

Have you instructed your department to ensure that future projects are carried out using Canadian‑made components? If so, when did you issue these instructions?

[ English ]

Hon. Gregor Robertson :

I think, across government, certainly within cabinet at this point, everything going forward is focused on Canadian steel and aluminum, Canadian lumber and Canadian workers. That's our mission, from this point forward. We can't, retroactively, go to financing that was agreed to back in March.

[ Translation ]

Xavier Barsalou-Duval :

You aren't answering my question. I asked whether you gave your department instructions. Ministers often pay lip service to supporting the steel industry. Did you give specific internal instructions to ensure that infrastructure projects comply with the statements of principle issued by Minister Mélanie Joly?

[ English ]

Hon. Gregor Robertson :

At this stage, through the chair, I don't give instructions to other ministers on how they conduct their affairs—

[ Translation ]

Xavier Barsalou-Duval :

I'm talking about your department. The Canada Infrastructure Bank, for example—

The Chair :

Thank you, Minister. Thank you, Mr. Barsalou‑Duval. [ English ] Next, we have Dr. Lewis. Dr. Lewis, the floor is yours, once again. You have five minutes, please.

Leslyn Lewis :

Thank you, Chair. In the last round of questions, Minister, you stated that almost all of the contracts are domestic. What does “almost all” mean? Are there other public, taxpayer-funded contracts going to enrich foreign countries, which are funded by Canada Infrastructure Bank funds that you, as the minister, are in charge of?

Hon. Gregor Robertson :

I'm not aware of other projects that are anything like this, in terms of financing, that might be going offshore. I am aware of projects and have gone through a history, whether it's the retrofit of Algoma Steel, the broadband investments in a number of provinces, or the airports in Montreal and Calgary. These are all very significant infrastructure investments by the Infrastructure Bank, which ultimately are funded through that initial $35 billion, and my direction, through the policy direction that is in my purview, will be to be very focused on Canadian materials and Canadian jobs, and on benefits to the Canadian economy, in the CIB investments going forward.

(1350) Leslyn Lewis :

Thank you for that answer. I'm going to ask you specific infrastructure questions. Of the $1-billion loan, there is $310 million that is allocated for electrification infrastructure. Do you know which companies will be building that infrastructure for the Chinese-made vessels, and have those contracts been disclosed?

Hon. Gregor Robertson :

Through the chair, I do not know the answer for those contracts. Those are BC Ferries procurements, again. I'm not aware of those decisions being made at this stage in the procurement that they're doing.

Leslyn Lewis :

Okay. Minister, given what has happened, and given the fact that you said that you're very disturbed by what has happened, that we know that $1 billion is going to a foreign company and that we now know that $310 million is allocated for infrastructure, you made no inquiries to see which companies are going to be getting those infrastructure contracts. Is that what you're telling me?

Hon. Gregor Robertson :

That is the electrification infrastructure to charge the ferries in the future. That will be installed in Vancouver, West Vancouver, Tsawwassen, Nanaimo and Saanich to charge the ferries. Certainly, those are decisions that will be made by BC Ferries and procured by BC Ferries. Given the concern that's been shared widely by many of us across Canada, my follow-up is to keep the pressure on, so that those are Canadian jobs and it's Canadian infrastructure in those future procurements. I'm not aware of those procurements already being made.

Leslyn Lewis :

You do not know if foreign companies will be receiving those infrastructure contracts associated with the $310 million, because you're not aware of whether or not those procurements have been made. That's what you're telling me.

Hon. Gregor Robertson :

Those are procurement decisions that BC Ferries is making.

Leslyn Lewis :

Right, and it is a part of the $1 billion that you said you're concerned about, but you have not even looked into how that money's being spent to see whether or not the infrastructure component is also going to be outsourced. It likely will be, because it has to be compatible with the ships that are built in China. You have not made that inquiry. Why?

Hon. Gregor Robertson :

Through the chair, this procurement is the responsibility of BC Ferries. BC Ferries is purchasing ferries and the electrical infrastructure to charge those ferries at the four points they go back and forth between. They are making their procurement decisions. I think it behooves all of us to make it clear to our counterparts that we want to see Canadian procurement. We want to see Canadian jobs and Canadian materials. Ultimately, it's a BC Ferries decision going forward. They are the ones procuring the ferries and the infrastructure that goes with them.

The Chair :

Thank you.

Leslyn Lewis :

So you're upset but just hopeful that it will change—

Peter Schiefke :

Thank you, Minister, and thank you, Dr. Lewis.

Leslyn Lewis :

You're just hopeful it will change.

Peter Schiefke :

Next we will go to Mr. Greaves. Mr. Greaves, the floor is yours. You have five minutes, sir.

Will Greaves :

Thank you very much, Mr. Chair, and good afternoon, Minister Robertson. Thank you for joining us. It's great to see you again. It's unfortunate that we're hearing a bit of confusion from our colleagues opposite about the nature of an arm's-length agency and its relationship to the federal government, confusion about who makes decisions and the kind of arm's-length relationship that informs that decision-making, and confusion about the critical role that BC Ferries plays out here in British Columbia, supporting people every single day, supporting our coastal economy. I know that you are well aware of these things.

In addition to your responsibilities as Minister of Housing and Infrastructure, you're also the minister responsible for the federal regional development agency for British Columbia, PacifiCan.

In that context, I wondered if you could speak, Minister, to some of the ways that the federal government is supporting investments along the B.C. coast that are going to help us not only meet critical infrastructure needs, such as BC Ferries, but also contribute to the greening of our economy, to the reduction of air pollution, and to moving toward the more sustainable economic future that British Columbians want and that the federal government is committed to supporting.

(1355) Hon. Gregor Robertson :

Through the chair, thanks to the member for the question. Certainly both through Housing, Infrastructure and Communities Canada and through PacifiCan, the economic development agency for the federal government in B.C., we're making very significant investments in housing infrastructure and all facets of the economy in B.C. We will definitely be laser focused on ensuring that every procurement decision we make going forward puts Canadians first.

We're going to see this across government now, given the times, given the challenges we face in the Canadian economy and given the importance of really focusing on investing in Canada and making sure we maximize and optimize the benefits for Canadians. On the west coast, the Canada public transit fund's recent investments in TransLink for clean transportation in the region are going to be very important in terms of TransLink modernizing its fleet of vehicles and infrastructure, for cleaner transportation, better service and affordability benefits.

As an example, through Housing, Infrastructure and Communities Canada but also across PacifiCan, the focus is more on small and medium-sized enterprises, a lot of the businesses that are scaling up to offer products and services that are Canadian, Canadian technologies, creating Canadian jobs, using Canadian materials. On the housing front, obviously close to our hearts in B.C. are BC Wood and the importance of making sure we're doing everything we can to get Canadian wood into Canadian housing and buildings.

It's going to be a big focus for us in the department to make sure we're doing everything we can to get those Canadian materials in the supply chains for all the housing and infrastructure investments that we're making going forward. We have an urgent effort now to move that forward. It was good to hear from Minister Freeland's side and Transport Canada that she's working, as well, with industry, with steel and aluminum on both the shipbuilding side and on the rail side, which are directly connected to her work in the department. We're doing a similar exercise in Housing and Infrastructure Canada.

Within PacifiCan, we're more focused at the B.C. level and the small and medium-sized business level.

Will Greaves :

Thank you, Minister. The last question from me, just very briefly, is this: In your capacity as minister for PacifiCan, is it your view that supporting BC Ferries in replacing and upgrading the ferry fleet in B.C. is a necessary measure to also support a healthy B.C. economy and sustainable growth out here in British Columbia?

Hon. Gregor Robertson :

Absolutely. BC Ferries is essential to the B.C. economy, which is a critical piece of the Canadian economy. We have to be investing and ensuring that our transportation infrastructure is robust and efficient. This is a really important and long-overdue investment, frankly, from BC Ferries. I think we all regret that it's a procurement that benefits a Chinese shipyard. In these times we would like to see that business, but there was no Canadian shipbuilder that bid on this. I think we have to do everything we can going forward to build up our shipbuilding industry in B.C. and across Canada.

The Chair :

Thank you, Minister. We'll have a last lightning round, for which I will turn the floor over to Dr. Lewis for three minutes and then to Mr. Kelloway for three minutes. The floor is yours, Dr. Lewis, for a last round of three minutes, please.

Leslyn Lewis :

Minister, you stated that the CIB signed the deal on March 28. You became the minister on May 13. Are you telling us that you found out on June 11—which is an entire month after—about the deal, and that you seriously went an entire month without finding out, from the bank that reports to you, about this deal?

(1400) Hon. Gregor Robertson :

To the chair, yes, I'll clarify that I was told the news about the CIB loan to BC Ferries on June 11. The night of June 11 was when I found out.

Leslyn Lewis :

Chair, I'd like to use the rest of my time to bring forth a motion, as follows:

Given that the Canada Infrastructure Bank failed to fulfill its mandate in

section 6 of the Canada Infrastructure Bank Act, which states:

“The purpose of the Bank is to invest, and seek to attract investment from private sector investors and institutional investors, in infrastructure projects in Canada or partly in Canada that will generate revenue and that will be in the public interest by, for example, supporting conditions that foster economic growth or by contributing to the sustainability of infrastructure in Canada”,

by awarding a $1-billion loan to BC Ferries for the purchase of four ferries from a Chinese state-owned shipyard, and that

this decision undermines Canadian shipbuilders and steel and aluminum workers already under attack by unjustified US tariffs,

the committee reaffirm its position and report to the House that the Government of Canada abolish the Canada Infrastructure Bank.

The Chair :

Thank you very much, Dr. Lewis. We have a motion on the floor, colleagues.

Dan Albas :

Was it a motion or a notice of motion? I thought I heard—

The Chair :

Can you clarify, Dr. Lewis? Was it a notice of motion?

Leslyn Lewis :

Yes, it is a notice of the motion, based on the facts and the testimony before this committee.

The Chair :

Thank you very much, Dr. Lewis. We will now go to our last line of questioning, from Mr. Kelloway. The floor is yours. You have three minutes, sir.

Mike Kelloway :

Thanks, Mr. Chair. I'd like to thank the minister for being here today. In particular, I'd like to thank you for talking about how the bank functions and how it's independent from government. In that vein, Minister, would the bank ever tell you, the minister, about procurement details? Would they ring you up and have a conversation with you, given the fact that the bank is independent from government and you've clearly articulated how it functions?

Hon. Gregor Robertson :

Through the chair, the simple answer is no. As the minister, I'm not involved in the day-to-day operations or decisions made by the Infrastructure Bank. It is an independent agency that's at arm's length from government. I have regular updates from the CEO and contact with the chair and board, which are standard for the relationship between a minister and an independent agency that I have responsibility for. My input is through policy direction, which is what's under way right now and going forward.

That's where I have the opportunity, on behalf of Parliament and on behalf of Canadian people, to input a shared sense that we really need to focus on Canadian jobs and Canadian materials with these infrastructure investments. However, we need to make sure, as you said when you opened your question, that the bank operates independently and has the confidence of the market and from private investors. That's how the bank can leverage billions of dollars of investment from the private sector into our public infrastructure.

Mike Kelloway :

Thanks, Minister. I think we can start with the baseline that we're all disappointed with the decision. Also, it's independent from government, and you are not.... As I listen to a lot of the questions today, I feel that you could be in the boardroom with the Canada Infrastructure Bank, having tea and discussing daily operations. You're clearly articulating that's not the case. I'll go a little deeper into it. This will be my last question, which is an addendum to the procurement details. You're not involved in the procurement details. You receive updates and things of that nature. Are you even allowed, under the legislation, to direct the Canada Infrastructure Bank to fund X, Y and Z?

Hon. Gregor Robertson :

Absolutely not. There is no directing that is possible through my role as minister. The bank is independent, and the decisions on investing are made by the board and CEO. That's where those decisions get made. I want to reinforce the fact that the procurement decision was made by BC Ferries. It was not made by the Canada Infrastructure Bank. The Canada Infrastructure Bank agreed to finance the replacement of ferries. BC Ferries had their own procurement process. Let's be clear that the Canada Infrastructure Bank did not have anything to do with choosing the winning proponent.

They put the financing forward to serve Canadians with better ferry service on the west coast. That's where their decision-making took place. BC Ferries went about their procurement independently.

(1405) Mike Kelloway :

Thanks, Minister. That's all I have. I appreciate the facts.

The Chair :

Thank you very much, Mr. Kelloway. Thank you, Deputy Minister Halucha and Minister Robertson, for your testimony today. We appreciate your time. Colleagues, I'm going to once again suspend for two minutes to welcome the next round of witnesses.

(1405) (1415) The Chair :

I call this meeting back to order. Colleagues, it is my pleasure to welcome the next witness appearing before us today. From British Columbia Ferry Services, we have Mr. Nicolas Jimenez, president and chief executive officer. Thank you for being here today. We appreciate your time, sir. We are very tight on time, and everybody has lots of questions, so we'll turn the floor over to you for your five-minute opening remarks. Then we'll give the floor over to our colleagues for their questions. Mr. Jimenez, the floor is yours. You have five minutes, sir.

Nicolas Jimenez (President and Chief Executive Officer, British Columbia Ferry Services Inc.) :

Thank you, Mr. Chair, and thank you to the members of the committee. It's nice to meet you and it's nice to be here. I am pleased to be able to speak about how BC Ferries is delivering safe, reliable and affordable service to British Columbians and our customers. For the last 60 years, BC Ferries has been an essential public service for British Columbians. Last year alone, we transported almost 23 million customers. That was our third record-setting year in a row. We're a private company that operates provincially under independent regulatory oversight, with a legislated mandate to serve the public interest.

We're a foundational part of the provincial and national supply chain, a critical part of the tourism industry in our province, and B.C.'s marine highway, moving about $8 billion in goods annually. Our customers and communities need safe, reliable and affordable service. My role as CEO is to deliver on that promise. Today our system is at capacity. Last summer our major route sailings ran at an average of 92% capacity. We left a quarter of a million people behind because we were full. Only one of our 25 routes can actually cover its own costs.

Travel demand is projected to rise by about 15%, outpacing our capacity even with four new vessels. Much of our capital infrastructure is old. Many of our ferries are well past their vessel design lifespan. More than half of our terminals need significant investment to keep operating safely. In 2024 the propellor fell off our 61-year-old Queen of New Westminster , resulting in almost 200 days of repair, countless travel disruptions and a cost to BC Ferries of about $15 million. We expect that our operating losses will continue to grow with inflation.

Simply to maintain today's level of service, we also expect that British Columbians could see their fares increase dramatically. We don't have the luxury, the flexibility or even the mandate to overspend. To replace our four oldest ships, we conducted an open and competitive procurement process independent of political interference and aligned with international best practice. In fact, we adjusted the qualifications specifically to enable Canadian shipyards to qualify. Despite two Canadian shipyards then being pre-qualified, neither chose to formally submit a proposal.

Of the six compliant bids that we did receive, all were from foreign countries. We chose the proposal that offered the best combination of value, quality, delivery timelines and protections for our customers. Throughout the build, we will have a team of Canadian experts on site, in China, to ensure high standards of quality and security. I will say that Canadian companies have made the same decision, building almost 100 ships in China over the last decade. That includes the newest vessel for Marine Atlantic, a federal Crown corporation. It came from the same shipyard where we will build our vessels.

To summarize, there were no Canadian bids. This was a choice between a foreign bid or no new ferries. Going with another foreign proposal would have cost up to an extra $1.2 billion, resulting in significant and unnecessary increases to passenger fares. Even if there had been a Canadian bid, it too would have cost more, and those ships would have taken up to a decade longer to build, during which time our customers would pay the high price, with increasing breakdowns of our older vessels.

Finally, financing this project privately would have cost up to $650 million more in interest charges—yet another unaffordable fare increase that our customers would have to bear. None of these would be acceptable outcomes for our company or for our customers, more importantly. Whether you live on Vancouver Island—in Powell River, Nanaimo or Langford—or in the Lower Mainland—in Maple Ridge, Abbotsford or Langley—or, frankly, anywhere else in British Columbia where taxpayers help support our marine highway, the cost of living is a major consideration.

Our mandate is to provide a service that is as affordable and reliable as possible. Regarding the Canada Infrastructure Bank, this current loan includes up to $690 million for vessels and another $310 million for electrification of our terminals to deliver cleaner and more climate-friendly travel in the future. To be clear, this is a loan that's received by BC Ferries, not China, and that will be repaid, with interest, by BC Ferries. British Columbians desperately need safe, affordable, reliable new ships to keep them and our economy moving.

Our decisions have saved our customers and British Columbians from unaffordable and unnecessary fare increases. I'm proud that we were able to deliver for them. Thank you.

(1420) The Chair :

Thank you very much for your opening remarks, Mr. Jimenez. We'll start our line of questioning today with Mr. Gunn. Mr. Gunn, the floor is yours. You have six minutes, sir.

Aaron Gunn :

Thank you, Mr. Chair. Mr. Jimenez, thank you for taking the time to join us here today. My first question for you is this: Which government departments and/or ministers were notified of the final or likely decision to purchase the ferries from a state-owned shipyard in the People's Republic of China? When were they notified?

Nicolas Jimenez :

We had conversations with the federal Department of Transport at the officials level in mid to late April to advise that the procurement was coming to a close. We were indicating essentially where it was going to land in terms of the yard and the country of origin.

Aaron Gunn :

Did the government, any of these departments, express any economic or national security concerns regarding that specific contract before the public announcement on June 10?

Nicolas Jimenez :

Well, no, but what I can say is that, actually, when we made the initial contact with the department, we were seeking counsel on how to open and continue a dialogue with others in the federal government, specifically around national security. It was through that conversation that we then made other contacts within the federal government—Public Safety Canada and others—to begin a process whereby, again, we would have an ongoing dialogue throughout the build of the program.

Aaron Gunn :

On June 20, it was reported that the Minister of Transport had wrote a letter expressing her great consternation and disappointment with BC Ferries' decision to contract the Chinese state-owned shipyard and that she was surprised that BC Ferries did not appear to have been mandated to require an appropriate level of Canadian content in the procurement. Does that make sense, that the Minister of Transport or that ministry should have been surprised by that on June 20, or should they already have known for months?

Nicolas Jimenez :

Again, I think you'd have to ask that question of the minister and her staff.

Aaron Gunn :

You stole one of my questions.... You said there were six other bids. Is that correct?

Nicolas Jimenez :

Compliant bids, that's right.

Aaron Gunn :

Were any of those other bids from NATO or other allied countries?

Nicolas Jimenez :

They were.

Aaron Gunn :

Was it your understanding or was it expressed to you that the subsidy, the loan that you received from the Canada Infrastructure Bank, was going to be the same, regardless of where the ferries were purchased from?

Nicolas Jimenez :

I'm not sure I understand your question.

Aaron Gunn :

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 :

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 :

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 :

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 :

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?

(1425) 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 :

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 :

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 :

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 :

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