BC Ferries gets a break

The Daily News catches up to the recent developments on the waterfront. Last Friday saw the Federal Government decide not to charge BC Ferries a 13 million dollar import tax from purchasing the MV Sonia, now known as the Northern Adventure overseas.

FEDS GIVE BC FERRIES $13M BREAK FOR NORTHERN SHIP
Firm told it will not have to pay tax on Queen of the North replacement
By Leanne Ritchie
The Daily News
Monday, June 25, 2007
Pages one and three

The federal government has decided that BC Ferries will not have to pay $13 million in import duties associated with the purchase of the MV Northern Adventure, the replacement of the sunken Queen of the North.

On Friday, Jim Flaherty, Minister of Finance said the federal government is playing its part in re-establishing a vital transportation link to coastal communities in British Columbia by remitting $13 million of customs duties paid by British Columbia Ferry Services Inc.

The passenger-vehicle ferry was imported into Canada in December 2006 to restore full service along B. C.’s Inside Passage.

“By remitting these duties to BC Ferries, our government is recognizing the challenges faced by those living in northern B. C. following the ferry’s sinking and the increased costs they would have shouldered to replace it,” said Flaherty. “The ferry services are essential if communities all along the northern coast are going to continue to grow and prosper.”

The loss of the MV Queen of the North left BC Ferries with only one vessel capable of providing service to northern communities. As BC Ferries did not have any other suitable vessels available within its own fleet, a world wide search determined that the MV Northern Adventure (formerly MV Sonia) was the only available vessel then available for use on the Inside Passage.

BC Ferries paid a little more than $17 million in duties when the vessel reached Canadian waters.

Chuck Strahl, Minister of Agriculture and Agri-Food and B. C’s Senior Regional Minister said the announcement shows the importance our government places on ensuring that ferry fare hikes are kept to a minimum for B. C.’s coastal communities.

In December, Kevin Falcon, the province’s Minister of Transportation, asked the federal government to remit the taxes due to the circumstances under which the vessel was purchased.

The $51 million MV Sonia (now the Northern Adventure), was purchased in Greece after an extension eight month search for a replacement vessel.

The ship then underwent $9 million in upgrades at a B. C. shipyard and B. C. Ferries spent a $1 million in Prince Rupert alone modifying its berths to accommodate the new vessel.

Import duties are meant to protect the shipbuilding industry and related jobs in Canada.

Earlier this year, the company said it felt its application for remission would be rejected.

The duty is mandated by Industry Canada, but a waiver involves Canada Border Services and the federal Finance Department.

During the next five years B. C. Ferries plans to add seven new ships to its fleet at a cost of $900 million.

Of those, three new Super C class vessels are being built at a cost of close to $600 million by Flensburger Schiffbau-Gesellschaft (FSG) in northern Germany, to be in service early in 2008. The same German shipyard will build the $113 million replacement for the Queen of Prince Rupert.

B. C. Ferries must pay import duties on all of those ships and will apply for duty remissions.