Benefits to ferry construction in B.C.

Re: Tread carefully with ship contract (Our View, July 26)

Re: Tread carefully with ship contract (Our View, July 26)

The good logic regarding B.C. shipbuilding that has been followed by left- and right-wing administrations for decades seems to have been forgotten.

All governments would look at foreign bids, then local bids. From the local bids they would subtract the immediate income tax received from shipyard workers, the sales taxes they paid, income taxes paid, etc.

While the local bid would often be higher, it was clear that the local bid was the right thing for taxpayers.

A recent example of foolishness illustrates well. A new seabus for Vancouver will be built by a Dutch company, because their bid was $25 million. The local bid was $27 million. But the taxpayers did not save $2 million – they lost.

If half of the $27 million was wages, about a third of that would be immediately recovered with income tax from the workers. Then the secondary tax revenues would flow in.

This is the problem when B.C. Ferries and Translink are separated from government, and this math is of no interest to a CEO who just wants a glowing bottom line, regardless of the resulting losses to all of us.

Rein Nienaber