Score one for BC Ferries. The Ferry Corporation had been lobbying Ottawa for exclusion from the normal duty associated with purchasing vessels outside of the country. Using the argument that the replacement for the sunken Queen of the North was not a normal fleet replacmeent procedure, the Ferry Corporation had asked for an exemption of the 13 million dollar duty. Explaining that they needed to resume a valuable service on the North Coast as fast as possible, making the build in Canada route not viable.
British Columbia labor organizations however, are not impressed. They feel that Ottawa has now rewarded the Ferry Corporation for purchasing outside of the country. While that argument may be weak considering the circumstances of this purchase, it will come in handy when the new Class C ferries begin their journey from Germany to British Columbia, BC Ferries had best save up for their duties now, we suspect that those purchases will not find a sympathetic hearing should BC Ferries even bother bringing the ships up for discussion.
Ottawa lets B.C. Ferries off hook for $13-million
Canadian Press
June 22, 2007 at 8:06 PM EDT
VICTORIA — The federal government will not make B.C. Ferries pay $13-million in duty for a new ferry.
Ottawa had wanted the ferry company to pay an import duty on the ship bought in Greece to replace the sunken Queen of the North.
But the federal Finance Ministry says it will waive the multimillion-dollar duty because Ottawa recognizes the challenges faced by ferry-dependent communities.
Federal officials said they hope the decision will prevent a fare hike that could have been imposed if B.C. Ferries had been forced to pay the hefty bill on the MV Sonia, which has since been renamed the Northern Adventure.
Ferries president David Hahn said the waiving of the duty will help reduce the costs of operating ferries on the northern routes.
“I think the federal government recognized that the impact of the sinking of the Queen of the North had an impact on a lot of communities,” Mr. Hahn said Friday.
“This is just a very wonderful and smart way to, again, ensure that fare hikes are kept to a minimum on those local communities.”
The remission doesn't cover the whole amount, however. More than $17-million in duties was paid on the Northern Adventure.
The B.C. Shipyard General Workers' Federation, however, is not so impressed with the waiving of the duties.
President George MacPherson said the government is rewarding the company for exporting jobs and investment to another country.
He said the company should have leased a replacement to run on the northern routes while another ship was built in B.C.
“The entire purpose of the 25 per cent duty on foreign-built ships is to encourage shipbuilding and job creation and Canada,” he said in a news release.
“If B.C. Ferries can end run that duty it defeats the entire purpose of that duty and betrays the Canadian industry and Canadian workers.”
Mr. Hahn called Mr. MacPherson's suggestion ridiculous.
“Our mission after the sinking of the Queen of the North was to restore full service to the North so we scoured the whole Earth looking for an appropriate vessel. There was no lease option, there was no delay. We had to move quickly and fast and that's what I think the federal government recognized here.”
He said any delay would have been considered unacceptable by the people on northern ferry routes.
Mr. Hahn said the duty in the case of a replacement vessel was not protecting anyone.
Mr. MacPherson, however, is calling on union and industry groups to put pressure on the federal government not to grant duty remission on the three Super-C Class vessels ferries is having built at Germany's Flensberger Shipyard.
The contract for those vessels is $542-million. Mr. MacPherson said the duty on those ships would be $82-million.
The MV Sonia was bought from Greece for $50.6-million and arrived last December for an $18-million refit before entering service.
The 117-metre vessel has 70 staterooms and will accommodate over 600 passengers and 101 vehicles.
The refit included customized steel work to reconstruct the Sonia's stern loading ramp to fit docks in Port Hardy, Prince Rupert, Skidegate in the Queen Charlotte Islands and McLoughlin Bay in Bella Bella.
The Queen of the North primarily plied the route between Prince Rupert and Port Hardy on the northern tip of Vancouver Island.
The aging Queen of Prince Rupert makes the run between Prince Rupert and the Queen Charlotte Islands. It too is due to be replaced in the spring of 2009.
The Queen of the North was doing almost 19 knots — almost 35 kilometres an hour — when the 8,800-tonne ferry slammed into the shore of Gil Island last March.
The collision ripped a gash from stem to stern that sent it to the bottom of Wright Sound in just over an hour.
It was carrying 101 people at the time. Two people were not found and have been declared dead.
Investigations into the nighttime sinking indicate the ferry failed to make a routine course change while exiting Grenville Channel.
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