3 shipyards set to share $7-billion in navy maintenance contracts

The decision by the federal government was met with mixed reaction

The federal government says it plans to divvy up $7 billion in maintenance and repair contracts for Royal Canadian Navy frigates to three shipyards, a political compromise that was met with mixed reaction.

Public Services and Procurement Canada announced the advance contract award notices on Thursday for 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.

Ottawa said in a statement that after consultations, it was decided the three Canadian shipyards were needed to complete the work on the warships.

It was not immediately clear how the money would be divided among the three shipyards. A government spokesman said the value of each contract would be variable as the number of “docking periods” per shipyard may vary.

RELATED: Federal government announces over $115 million to Royal Canadian Navy

David Baker-Mosher, president of the Unifor Marine Workers Federation Local 1 union at Halifax’s Irving shipyard, called the government’s plans an “utter disappointment.”

“Workers feel their future is being jeopardized,” he said, noting that the decision could mean layoffs.

“It’s disappointing that our government cannot understand how these ships are worked on and how much skill is needed.”

At issue is a gap between the end of the Arctic and Offshore Patrol Ships program and the start of the Canadian Surface Combatant program.

Irving has indicated in the past that repair work on the Halifax-class frigates would help mitigate that gap and sustain jobs.

An Irving spokesman declined an interview on Thursday’s announcement, but said the company would provide comment following an announcement by Defence Minister Harjit Sajjan at the Halifax Shipyard Friday morning.

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” 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.

Ken Hansen, an independent defence analyst and former navy commander, said dividing the work between three shipyards through untendered contracts 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.”

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.

The Royal Canadian Navy’s Atlantic fleet is based at CFB Halifax while the Pacific fleet is based at CFB Esquimalt near Victoria, B.C.

Hansen added that the decision hearkens back to a historic approach to shipbuilding in Canada

“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.

Michael Byers, a University of British Columbia professor and expert on Canadian defence policy, agreed that the decision was likely influenced by politics but called it a “defensible policy choice.”

“It’s likely a decision made for a political reasons, but it’s not a decision that threatens the viability of the shipyards in Halifax or B.C.,” he said.

“It’s a defensible decision even if the motivation was probably political.”

Byers added that Irving can also bid on work on the commercial market and shouldn’t expect government to fill every gap.

“From a political point of view, it is interesting that the government has found a way to potentially satisfy everyone,” he said. “From a vote winning perspective, that’s an optimal outcome for the federal government.”

RELATED: Liberals agree to hike pre-writ spending limit for political partie

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.”

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.

Ottawa says the work on the frigates is necessary while the navy awaits the delivery of replacement Canadian Surface Combatant ships.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Man charged in Salmon Arm 7-Eleven fire granted bail

Accused facing arson charges released with 23 conditions including a 7 p.m. curfew

Outdoor ice rink opens in the North Shuswap

Those looking to skate in the fresh air can do so at Farrell’s Field in Celista

Man admits responsibility for 2016 death of Shuswap motorcyclist

Brian Watson, 60, died after being struck while riding his motorcycle on Squilax-Anglemont Road

Super blood wolf moon fills Okanagan skies, to photographers’ delight

Photographers had a rare chance Sunday to capture a rare lunar eclipse

Video: Snow Pitch Tournament a home run

Teams competed for softball supremacy on the snow-covered Finlayson Park ball diamonds

UPDATE: B.C. legislature managers accused of excessive travel, personal expense claims

Speaker Darryl Plecas’ report details ‘flagrant overspending’

‘Blue Monday’ isn’t real, but depression can be

CMHA encourages people to prioritize their mental health

Anti-pipeline group wants NEB to consider impact of emissions, climate change

Stand.earth filed NEB motion asking to apply same standard to the project as it did with Energy East pipeline

Parole granted for drunk driver who killed B.C. RCMP officer

Kenneth Jacob Fenton will be able to attend alcohol abuse treatment, nearly three years after crash that killed Const. Sarah Beckett

B.C. man charged in 2014 snake venom death of toddler

Henry Thomas was taking care of the North Vancouver girl the day before she died

B.C.’s largest public-sector union wants inquiry into money laundering, drugs

Union officials say Premier John Horgan and Attorney General David Eby have not ruled out the possibility of a public inquiry

Teen in confrontation with Native American: I didn’t provoke

Nick Sandmann of Covington Catholic High School said he was trying to defuse the situation

Former Kelowna city manager downplays possible Costco move

Ron Mattiussi says if store leaves for Westside, another big box retailer will likely take the site

Most Read