A provincially owned ferry operator in British Columbia has quietly handed a multi-billion-dollar contract to a Chinese state-owned shipyard to build four new major vessels. The deal, announced on June 10, 2025, has ignited a firestorm over lost Canadian jobs, fairness in procurement, and—most alarmingly—national security risks to critical underwater infrastructure. At the centre of the controversy sits the Canada Infrastructure Bank (CIB), a federal Crown corporation that quietly committed up to $1 billion in low-interest taxpayer-backed financing before the Chinese yard was selected. Federal ministers now express “dismay” and point fingers at Victoria, insisting the procurement decision was purely provincial. Yet internal warnings about spying capabilities were flagged months earlier, and Ottawa’s own agencies admit they conducted no national security review.
The Deal: Price Wins Over “Made in Canada”
BC Ferries’ New Major Vessels (NMV) project aims to replace four of its oldest ferries serving busy Lower Mainland and Vancouver Island routes. The new ships will carry roughly 52% more passengers and 24% more vehicles than their predecessors, with diesel-battery hybrid propulsion convertible to full electric.
In September 2024, BC Ferries issued a global competitive RFP. Six bids arrived—all foreign. On June 10, 2025, China Merchants Industry Weihai Shipyards (CMI Weihai)—a subsidiary of the state-owned China Merchants Group—was declared the winner based on the “lowest technically compliant bid.” BC Ferries has described the contract as ironclad, with milestone payments, refund guarantees, and on-site oversight. The exact value remains secret, but the company claims it is more than $1.2 billion cheaper than the next (European) option.
No Canadian yards bid successfully:
Seaspan (BC) was fully booked with federal naval and Coast Guard work; Davie (Quebec) withdrew, alleging the process was “heavily weighted toward the lowest price” and disadvantaged domestic builders facing higher wages, stricter labour/environmental standards, and no state subsidies. A leaked 2023 consultant report (commissioned by Seaspan) had urged the BC government to pursue a phased domestic build that could have created thousands of jobs and generated significant provincial revenue—recommendations that were apparently ignored.
Unions launched a “Build Them Here” campaign. BC Conservatives and federal opposition parties demanded cancellation. Premier David Eby said he was “not happy” but cited urgent service needs and fare affordability. BC Ferries countered that long-term local economic benefits would far outweigh construction jobs abroad.
The Federal Money Trail: CIB as the Enabler
Enter the Canada Infrastructure Bank, Ottawa’s arms-length infrastructure financing vehicle.
- March 28, 2025: Financial close on a $1 billion credit agreement (senior secured bonds) between CIB and BC Ferries—six weeks before the Chinese yard was publicly selected.
- Allocation: Up to $690 million for the vessels themselves; up to $310 million for terminal electrification upgrades (power lines to enable future all-electric operations).
- May 22, 2025: First tranche of $133 million disbursed.
- Terms: Subsidized interest rate of ~1.828%. CIB and BC Ferries claim a full drawdown would save approximately $650 million in interest versus private markets, keeping fares lower for passengers.
A second, smaller CIB loan ($75 million in 2024) had already supported four smaller Island Class vessels built in the Netherlands.
CIB CEO Ehren Cory and BC Ferries CEO Nicolas Jimenez have defended the financing as essential: without the cheap federal capital, the project “wouldn’t likely be purchased,” risking more breakdowns, service cuts, and fare hikes. The CIB project page makes no mention of the shipyard’s nationality or security issues—only environmental benefits and capacity gains.
The CIB is structured as an independent Crown corporation; the loan is a commercial arrangement, not a direct grant. Federal ministers, including former Transport Minister Chrystia Freeland, have repeatedly stated: “The decision itself is on the Government of British Columbia.” Yet the money originates from federal taxpayers and was approved before the controversial award. When pressed in Parliament, officials note the loan predates the final selection and cannot now be clawed back without breaching the contract.
In effect, Ottawa has outsourced political accountability to an arms-length bank while providing the financial oxygen for a deal many Canadians view as contrary to national interests.
Ignored National Security Red Flags
The most damning element emerged in dramatic testimony on February 25, 2026, before the House of Commons Standing Committee on Transport, Infrastructure and Communities.
Public Safety Minister Gary Anandasangaree admitted under questioning that no national security review was ever conducted on the vessels or the procurement.
“While Public Safety Canada does have authority to conduct security reviews of foreign direct investments under the Investment Canada Act, it does not review procurement decisions at the provincial level, such as this one. … In this case, only after outreach from Transport Canada did Public Safety officials engage with BC Ferries. BC Ferries already made their procurement decision.”
Committee vice-chair Dan Albas (Conservative) quoted directly from an unclassified Transport Canada document that explicitly warned:
“…vessels built in China will have access to Canadian waterways and could use scanning and mapping technology to gather information about critical underwater infrastructure, including data cables.”
Albas called the absence of any review “unfathomable.”
Even more revealing: On April 29, 2025—more than a month before the public announcement and while the CIB loan was already active—BC Ferries CEO Nicolas Jimenez sent a confidential email to Transport Canada deputy minister Arun Thangaraj. Titled “confidential follow-up,” it explicitly flagged national-security concerns arising from a potential award to the Chinese state-owned yard.
Transport Canada knew. Public Safety was looped in only after the fact. No review occurred. The contract was signed anyway.
CSIS has stated there are “no specific current threats” identified, but the broader risk remains: modern ferries are floating data platforms equipped with sophisticated sensors, radar, sonar, and communication systems. Once operating in Canadian waters, they could—intentionally or via backdoors—map harbours, cables, pipelines, and military assets for Beijing.
This is not theoretical. China’s military-civil fusion doctrine and the track record of state-owned enterprises mean every vessel built in a Chinese yard carries potential intelligence-gathering risk.
Political Fallout and the Road Ahead
Federal Liberals have walked a tightrope: expressing disappointment, holding committee hearings, demanding documents (some of which BC Ferries has resisted on constitutional grounds), yet taking no concrete steps to unwind the CIB financing or block the builds.
Conservatives and unions continue to demand cancellation. BC Ferries maintains that the contract is locked in with strong protections. As of today, February 26, 2026, the vessels are listed as “under construction” on the CIB website. The parliamentary committee’s review continues, but it has no binding power to halt a provincial procurement backed by an already-issued federal loan.
The scandal echoes the disastrous 1990s BC fast-ferry fiasco—another NDP-era domestic build that ended in massive cost overruns and political ruin. This time, the political risk is different: subsidizing a strategic rival while Canadian shipyards sit idle and underwater critical infrastructure lies exposed.
Ottawa’s use of the CIB has proven an elegant but politically toxic mechanism: provide the money, claim distance, and let the provinces take the heat. In the process, legitimate national security warnings from Transport Canada’s own files appear to have been sidelined by bureaucratic silos and jurisdictional buck-passing.
British Columbians will sail on these ships. Canadian taxpayers are helping pay for them. And the data they may unwittingly collect could one day be used against the very country that financed them.
The vessels are being built in China. The questions they raise are being built in Ottawa.