This article originally appeared in the Vancouver Sun.
By Jerome Gessaroli, July 3, 2025
Would you spend an additional $1.2 billion to avoid handing a major contract to a geopolitical rival? B.C. chose not to, and that decision says more about fiscal posture than foreign policy. B.C. Ferries’ decision, announced on June 10, to award a major shipbuilding contract to a Chinese shipyard isn’t just about ferries. It’s about how fiscal vulnerability is increasingly dictating Canada’s foreign and economic decisions
Mike Farnworth, the province’s public safety minister, offered a predictably political response. He expressed concern and “disappointment” that domestic shipyards weren’t more involved, while emphasizing B.C. Ferries’ independence, calling it “an independent company responsible for its own operational decisions.”
But that claim of arm’s-length independence is contradicted by the government’s own history of intervention. The provincial government has repeatedly stepped in to influence B.C. Ferries when it suited their priorities. In 2022, it amended the Coastal Ferry Act to assert strategic oversight of the board, then quickly replaced the CEO and appointed a new board chair. This is not a government that shies away from exerting control when it wants to.
Farnworth knew about the Chinese contract a month before it became public. Had he truly objected, he had ample time to stop it. Instead, he let it proceed because, despite the poor optics, the fiscal rationale was overwhelming. His public concerns were political cover for a decision he understood to be economically necessary.
Security analysts have raised two concerns. First, that Chinese involvement could introduce cybersecurity vulnerabilities or facilitate technology theft. Second, that working on roll-on, roll-off ferry designs might help China develop vessels usable for transporting troops, such as in a hypothetical Taiwan invasion.
But those fears are overstated in this case. The Chinese shipyard is only building bare hulls. All critical technology, software, and onboard systems will be installed domestically. While China could theoretically gain some insight into vessel design, the strategic value is negligible.
This specific contract was the right decision under the circumstances. It was a pragmatic choice driven by fiscal constraints. The troubling part is that it wasn’t made from a position of strategic strength, but from a lack of financial flexibility.
This episode illustrates a broader problem. When governments lack the fiscal discipline to preserve options, their foreign policy becomes reactive, not deliberate. Values get sidelined not by choice, but by necessity. Canada’s ongoing structural deficits and high spending have narrowed our room to maneuver, diplomatically and economically.
Achieving sound fiscal governance means moving away from ad hoc spending increases and toward a multi-year budgeting framework that prioritizes economic growth by lowering barriers for entrepreneurs, streamlining regulations, and letting market signals guide investment — rather than relying on ad hoc political direction.
Critics of the deal have focused on national security risks and the symbolic message of awarding a major contract to a strategic rival. But they are missing the point. The core issue is not whether this specific contract was right or wrong. The deeper concern is that it wasn’t made from a position of strategic strength, but under pressure from a lack of fiscal flexibility.
Minister Farnworth’s carefully worded statement may have offered short-term political cover. But it also revealed a deeper vulnerability. When fiscal constraints force decisions that run counter to strategic objectives, it weakens a country’s ability to act consistently in matters of international concern.
Jerome Gessaroli is a senior fellow at the Macdonald-Laurier Institute and leads the Sound Economic Policy Project at the B.C. Institute of Technology.
