Duty on importing the Sonia

[Scott]

There was more talk this evening on CKNW about the federal duty that will be charged for bringing the Sonia in from a foreign country. I heard the figure of $15 million. The shipbuilders union wants the duty to stand... the ferries and Minister Falcon are petitioning for it to be dropped.

www.cknw.com/news/news_local.cfm?cat=7428545912&rem=53647&red=80154523aPBIny&wids=242&gi=1&gm=news_local.cfm

In my opinion, I think the duty should be dropped since it's almost an emergency ... the North Coast needs a ship and there isn't time to build one locally in time. As for the superC's, I think the duty should stand.

[Dane]

Just aired on Global's 11pm News.

[Kam]

Just herd on the radio that Industry Canada has denied BC Ferries application to have the duty waved and will be required to pay the full amount.

[Neil]

I think they should have to pay the duty, although, "they" is of course "we", as the taxpayer is ultimately on the hook. If a precedent is set in letting BC Ferries off, they'll be encouraged to get creative every time they seek to justify buying or purchasing overseas as opposed to here.

Section 69 of the Coastal Ferry Act deals with the ASP process, not replacement boats. There doesn't appear to be anything anywhere in the Act requiring operators to have an alternate vessel. Operators can apply to the Commissioner for a temporary or permanent cessation of service, under certain circumstances.

[Scott]

From what I heard on CKNW this afternoon, the government is likely to waive the duty on the Sonia. Nothing official, but it seemed like that was going to happen.

[Barnacle]

Well, I'm coming from outside the Canadian world, but I honestly can't recall a time when my government waived duty when *I* had an emergency...

[Scott]

From what I understand, the import tax would have technically applied whether BCFS was a crown corporation or not.

Today George McPherson of the BC Shipyards union called on the government to impose the duty on the Sonia. He said that BCFS could have leased the Sonia while local shipyards built a new replacement vessel. My question is, if BC Ferries leased the vessel, would they be allowed to make major structural modifications to fit BC Ferries docks? If not, then I don't see how they could have leased a ship for our "unique" loading system.

[WettCoast]

admin said:

From what I understand, the import tax would have technically applied whether BCFS was a crown corporation or not.

I believe the concept is that the feds can not impose their taxes on the provinces or vice versa. So an agency of the province of BC would not be subject to the duties that individuals and the private sector must pay.

I am fairly sure that no duties were paid on the Stena Danica or Basto (Q of Chilliwack).

BCFS could have opted to charter an older vessel such as the Scotia Prince for a few years until a new build was available for the route. Such a vessel would have needed few, if any, modifications to serve the northern routes. They knew from the outset that they would end up paying the duty unless they could convince the Harper government that they should have a break.