Halifax, B.C. yards win shipbuilding work

Halifax's Irving Shipbuilding and Vancouver's Seaspan Marine are the successful bidders for $33 billion in shipbuilding work, the federal government has announced.
Nova Scotia Premier Darrell Dexter, left, and Jim Irving, CEO of Irving Shipbuilding, react after Irving's Halifax Shipyard won the $25-billion tender to build 21 Canadian combat ships Wednesday. Vancouver's Seaspan Marine was the successful bidder for an $8 billion non-combat package. (Andrew Vaughan/Canadian Press)

Halifax's Irving Shipbuilding is getting the $25-billion contract to build 21 Canadian combat ships and Vancouver's Seaspan Marine has been awarded an $8-billion contract for seven non-combat vessels, the federal government announced Wednesday afternoon.

Defence Minister Peter MacKay said it was a very exciting day for the Royal Canadian Navy because the ships will help them prepare for the challenges of the 21st century.

He also congratulated Irving, which is based in his home province.

"They won this on their merit. They won this on hard work. They put forward a very competitive bid into a process that was merit-based, that was transparent, inclusive and open, and highly competitive," he said.

"And so for that, the shipbuilders of Nova Scotia deserve the credit for what is an absolutely wonderful day in our province."


Your comments on the coveted shipbuilding bid: What you had to say.

Rona Ambrose, the minister of public works and government services, which handles procurement, said the contracts will provide 75 million hours of work and 15,000 jobs annually over the next 30 years.

"Our government made the strategic and historic decision to support the Canadian marine industry, to revitalize Canadian shipyards and to build ships for the navy and coast guard right here in Canada," she said.

The winning bids announced in Ottawa by François Guimont, the top civil servant from Public Works and Government Services, the department in charge of procurement, are for frigates, supply ships, patrol boats and icebreakers that will cover Canada's naval and coast guard needs for the next three decades.

Three shipyards entered bids: Irving Shipbuilding in Halifax, Seaspan Marine in Vancouver and the Davie Shipyard in Lévis, Que. The competition among the three regions meant the file was bound to be politically tricky to navigate.

Dexter, Clark thrilled

Nova Scotia Premier Darrell Dexter says Nova Scotians who have left the province and are now in Alberta or other parts of the country can bring their skills home.

B.C. Premier Christy Clark shakes hands with shipyard workers in North Vancouver, after word B.C.-based Seaspan Marine had won the $8 billion tender to build arctic and Coast Guard vessels. (Jonathan Hayward/Canadian Press)
 "That's pretty significant for us," he told Rosemary Barton on CBC's Power & Politics, using words like "jubilant" and "euphoria" to describe the reaction of people around him.

"It also means that the young people who are here today who are in high school or community college can look at a career in shipbuilding. That they're going to be able to keep their families here, to put down roots and to know that they're going to have a good-paying job over the long-term and that they're going to share in the prosperity of the province."

B.C. Premier Christy Clark said people at the Seaspan shipyard and in secondary industries now have certainty around their employment. The project is expected to bring 4,040 jobs to the area.

"We know that the one thing the government can do for families is to enable the creation of jobs to make it a little bit easier to do a great job on a parent. Because you can put food on the table for your kids," Clark said.

"They are great-paying jobs, in a province where we want to grow and have a thriving middle-class in every part of British Columbia. Great paying, stable, long-term jobs."

Jim Irving, the head of Irving Shipbuilding, credited Dexter with helping win the bid, and thanked the community for putting up stickers and signs in support of it. 

"What this means is we've got a long-term, stable outlook. These are big, capital-intensive jobs, and when you can plan these long-term jobs out in the future it gives you great stability. It means we'll develop our workforce, our young people, our community colleges, developing young skilled trades people, bring the folks back from out West," Irving said. 

NDP want more details

NDP shipbuilding critic Peter Stoffer, who represents the Nova Scotia riding of Sackville-Eastern Shore, called it "a very, very great day for all of Canada."

Stoffer said he trusts the fairness and independence of the process and congratulated officials who worked on the decision.

The NDP MP has been the party's shipbuilding critic for more than 14 years. He said he can't count the number of meetings he's had with people asking for shipbuilding using Canadian employees and Canadian materials.

But he cautioned the NDP wants to see more information soon.

"We would like to eventually see the final costing details of this and the plan and ship rollout, and how it's going to be done, in the near future."

NDP Leader Nycole Turmel released a statement that said she "slammed the Conservatives for picking winners and losers."

"New Democrats are calling on the government to accelerate the remaining contracts and ensure all of our shipyards benefit from consistent demand and stable employment to eliminate boom and bust cycles. We have to build this industry everywhere," she said.

Fair process, monitor concludes

MacKay said it's the most fair contract award process ever in Canada.

"There's never been a more fair process, more inclusive, more transparent. Lots of oversight, fairness monitors," he said. "This will be decided on merit."

Peter Woods, the independent fairness monitor for the process, confirmed that. Woods said that in the years he's reviewed contract awards, the shipbuilding process was one of the most fair, if not the most fair, he's ever seen.

Deputy minister of public works Francois Guimont announced the shipbuilding decision in Ottawa Wednesday. The procurement process included a fairness monitor to guard against political interference. (Adrian Wyld/Canadian Press)
A shipyard was not allowed to win both projects. Davie will still be eligible to bid on further contracts worth $2 billion in total to build smaller ships. The two successful shipyards will not be eligible to bid on that work.

The bidders and federal ministers were notified of the outcome only minutes in advance of the announcement. The three companies were all readying press conferences at their shipyards to respond when the announcement comes after the close of the main North American stock markets.

Armand Couture, a spokesman for Davie, said the company is disappointed with the decision.

"We were convinced – and still are – that the structure we put in place is perfectly adapted to deliver large scale shipbuilding projects.

We still hope that we could collaborate with the Canadian government on more contracts arising from the [National Shipbuilding Procurement Strategy]."

Couture thanked the government of Quebec for making the bid possible. Davie was financially insolvent before the provincial government gave it a contract to build two ferries.

Bloc Québécois MPs seized on the decision, and Stoffer's comments, to say only their party will fight for Quebecers.

Economic benefits big

MacKay spoke earlier Wednesday about the economic benefits of the contracts, but said the focus should be on the navy.

"Keep in mind this is about rebuilding our navy, our coast guard, the vessels that we will need well into the future," he said.

Workers at the Halifax Shipyard celebrate after the Irving facility was awarded the contract to build Canadian combat ships, Oct. 19, 2011. (Andrew Vaughan/Canadian Press)
Interim Liberal Leader Bob Rae said earlier Wednesday the government is going to have to look at economic development and other assistance for the losing city. He says it’s not just companies that win the contracts, but regions.

"And there are lots of things that can happen afterward, in terms of sub-contracts. The reality of building a ship is that much of the insides, the electronic systems, all the other aspects of it, are not confined to one region or another," Rae said.

"We need to understand what the impacts are and then we need to understand the impact on a particular centre … It's very important for us to look down the road at making sure that we have a plan in place and this is a government responsibility for the yard that is not successful."

After the announcement today, the shipyards will finalize their agreements with the government and negotiate contracts in 2012 for the first project in each package of work.

Mobile users, re-read the live blog here.