[mezzanine]

This is from a report at the beginning of the campbell administration in the wake of the fast ferries. we can build large spirit-class vessels (b/c we did), but work had to be split amongst different shipyards in bc. No one company could assume the risk (and i assume, provide a fixed-price contract) and BC ferries applied that role.

You can make the argument that we need to subsidize bc shipbuilding, but you would need to justify it clearly and not roll it into the BC ferries mandate of providing cost-effective, customer-responsive and reliable ferry service.

BC Ferries is entangled in a web of formal and informal accountability to various government agencies, ministry personnel and politicians that it is powerless to change. Its enabling legislation provides that the Province, not BC Ferries’ board, make all significant decisions. As a result the Province’s policy imperatives can, at times, conflict with BC Ferries’ primary goal of serving its customers.
....
(v) BC Shipbuilders versus International Shipbuilders

To date, all of BC Ferries’ new vessels have been built in British Columbia. BC Ferries hired KMM to examine three standard vessels (Century Class, C-Class and Spirit Class) and to estimate the cost of building them in the USA, South America, Europe and Korea. KMM concluded that there is a 30% cost advantage (after paying the 25% federal import duty) to purchase a vessel built at a Korean yard, the least expensive option, over a BC yard, the most expensive option. The major differences in the cost are attributable to wage
differentials and higher productivity. Over the 15-year plan this difference is estimated at $350 million.

(vi) Capacity of the BC Shipbuilding Industry

Several BC shipyards have the capacity to build Century Class vessels but, of financial necessity, can only perform this service on a cost plus basis. Only one shipyard in BC is capable of posting the bonds in excess of $100 million that would be required to insure both the design and construction risk for a major vessel. BC shipyards could, however, form a consortium to build the larger vessels, as has been done successfully in the past.

During the last two major vessel construction programs (the two Spirit class vessels and the three PacifiCats), BC Ferries had to assume the design and construction risk because BC shipbuilders would or could not.
....
When the Spirit class vessels were tendered, the best bid (lowest price, 100% of the design and construction risk borne by the shipbuilder) came from a Louisiana based shipbuilder. However, the Province intervened in favour of BC shipyards

....

Given that its fleet renewal is of such critical importance and that BC Ferries forecasts that they will spend up to $1.1 billion in this regard over the next 15 years, it is vital that BC Ferries have the ability to effectively
manage this cost. We recommend that BC Ferries be given clear authority to purchase standard vessels with a proven operating history in BC waters from the lowest cost provider that can accept 100% of the design and construction risk.

We expect that BC shipbuilders would, individually or as a consortium, bid competitively on each vessel to be built. If they require financial subsidies to compete, they should be clear and visible, not delivered through the subterfuge of BC Ferries being compelled to purchase vessels at higher prices and risk.