Feds award $7B in contracts to three shipyards for navy ship maintenance
HMCS Toronto is seen in this file photo heading to the Arabian Sea as part of Operation Artemis, in Halifax on Monday, Jan.14, 2013. (THE CANADIAN PRESS/Andrew Vaughan)
The Canadian Press
Published Thursday, November 1, 2018 10:53AM EDT
Last Updated Thursday, November 1, 2018 3:21PM EDT
OTTAWA -- The federal government said Thursday it plans to award contracts worth $7 billion to three shipyards for maintenance and repair work on Royal Canadian Navy frigates -- a decision one defence analyst says hearkens back to a historic approach to shipbuilding in Canada.
Public Services and Procurement Canada announced the advance contract award notices to Halifax's Irving Shipbuilding Inc., Seaspan Victoria Shipyards in Victoria, B.C. and Davie Shipbuilding in Levis, Que.
The contracts are to maintain Canada's 12 Halifax-class frigates until the end of their operational life, estimated at another 20 years.
The government said in a statement that after consultations, it was decided the infrastructure and workforce of the three Canadian shipyards were needed to work on the frigates.
It was not immediately clear how the money would be divided among the three locations.
Dave Baker-Mosher, president of the Unifor Marine Workers Federation Local 1 union at Halifax's Irving shipyard, called the government's plans "devastating."
"It's disappointing that our government cannot understand how these ships are worked on and how much skill is needed," he said.
Baker-Mosher warned that the decision will mean layoffs, and that those highly skilled younger workers handed pink slips may not return.
In B.C., Tim Page with Seaspan said the company was pleased with the government's intent to contract the Victoria shipyard.
"We have been repairing and refitting those vessels now for some time on budget and on time and that elicits great pride in our workforce in Victoria," said Page, Seaspan's vice-president of government relations.
However, he pointed out that "it's not the end of the road" just yet, as there is a 15-day "cure period." The deal gives other interested suppliers 15 days to come forward if they wish to bid on the contract and submit a statement of capabilities that meets the requirements laid out in the contract notice.
In Quebec, the announcement was greeted with relief by Davie Shipbuilding, which has laid off hundreds of employees over the past year as work dried up.
"There is finally stability," company spokesman Frederik Boisvert said.
Ottawa has faced strong pressure from the Quebec government to send more work Davie's way.
The company had 1,500 employees during work to convert a civilian ship into a new interim resupply vessel for the navy, but the workforce has fallen to 250 since that ship was delivered in 2017. Davie has been seeking a contract to produce a second resupply vessel.
Boisvert said because the frigate work does not begin until 2021, the company faces serious challenges in the immediate future. "It is going to be hard to maintain (workforce levels) because of the weak volume of contracts we have," he said.
Ken Hansen, an independent defence analyst and former navy commander, said divvying up the work through untendered contracts between three shipyards is about politics.
"Any work that is awarded to Davie is done for the sake of politics," he said. "It tells you that the power of the Quebec caucus in the Liberal party is really strong. They're able to compel these kinds of decisions against best practice."
Hansen said international best practice is to do repair and maintenance work in the ships' home port.
"If the ships have to travel a distance and get their work done elsewhere, it's both ineffective and uneconomical," he said.
Hansen added that the decision is reminiscent of the country's historic approach to shipbuilding.
"The various regions all had a slice of the shipbuilding pie and what ended up happening ... was this boom and bust cycle," he said, noting that it led to repeated gaps in work and layoffs.
Nova Scotia Premier Stephen McNeil said his government has spoken with Ottawa about maintaining work at the Halifax Shipyard.
"We've made the case to the national government that we believe the level of work should be maintained at the shipyard so they can hold on to the high quality talent that they currently have," he told reporters.
Meanwhile, Conservative Leader Andrew Scheer, in Quebec City to meet with Premier Francois Legault, accused the federal government of "neglecting the Davie Shipyards."
He said the resupply vessel was delivered "on time, on budget, and now they're delaying the second ship unnecessarily, which is costing jobs here."
Ottawa says the work on the frigates is necessary while the navy awaits the delivery of replacement Canadian Surface Combatant ships.
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