Wal-Martin Ship building

That will be the Day, when we will build our own Ferries.

The BC Liberal government of Gordon Campbell decided soon after they were elected in 2001 that they would not be wasting money by building ferries in BC or Canada for that matter. Ship building was dead in the water. They said good riddance to hope of reviving the industry. Instead they did what all wal-martin folks do. They cast their net in the ocean and scooped up the cheapest boats they could find. They bought ships from Europe.

The Liberals decided the BC industry was just a bunch of unions and it was better to spend money on German and Polish ships made by unions in those countries than support BC workers. The cost for doing so was a federal tax meant to support ship building in Canada. The BC Liberal Government decided the import tax amounting to 119 million dollars was worth the death blow they would deliver to union made ships in Canada.

This was just the first step in their ultimate goal of privatising BC Ferries. After buying the ships from European ship builders, the government then made BC Ferries a private corporation. The expressed rational was that it would make it easier for BC ferries to attract private capital needed to build and revitalise the BC Ferries fleet and physical infrastructure.

The downside which most people did not understand was that a private company pays more to borrow money than the government does. That means BC Ferries is paying a premium for its borrowing today. A premium it did not have to pay when it was a crown corporation. This is an additional cost and that additional cost has to come from somewhere, the consumers.

Now back to the the federal tax of 119 million dollars BC Ferries paid to the federal government on ships built in Europe. Stockwell Day has come to the rescue and returned the money to BC.

Why you might ask are they doing this? At first it looks like a federal government responding to the cash strapped BC government. Kudos should be in order. Not so fast though. The BC Government and Gordon Campbell are likely the most despised government in all of Canada. The HST and the way they implemented it have made it so. Campbell's friends in Ottawa don't want to see the Liberal brand damaged so much that the NDP forms the next government.

A little good news was in order. The federal hand out to BC, (we will gladly accept it) is a blatant effort to buy votes. Reducing BC Ferries fares is good news. And right now any good news the BC Liberals can deliver is welcome. The recently announced 2% fare reductions just shows us how much more we have been paying due to Campbell's goal to privatise BC Ferries.

I am however concerned in that Stockwell day states that the Federal government will forgo up to 250 million of the import tax. Does this mean that BC Ferries can now go back to Europe and buy more ships at the expense of ever having or reviving a ship building industry in Canada?

Of course it may not be Europe that provides the ships to BC Ferries, It may be a "Fast" boat from China" because thats the Wal-martin thing to do.

1 comment:

Jenn Jilks said...

Thought-provoking post.