Victoria Shipyards to share in $7-billion ship project

Seaspan’s Victoria Shipyards is poised to share in $7 billion worth of contracts that the federal government plans to award for maintenance and repair of Royal Canadian Navy frigates.

Public Services and Procurement Canada said Thursday that the work will be split among Victoria Shipyards, Halifax’s Irving Shipbuilding Inc., and Davie Shipbuilding in Lévis, Que. The spreading out of the work prompted criticism from a union official in Halifax.

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The contracts are to maintain Canada’s 12 Halifax-class frigates until the end of their operational life, estimated at another 20 years.

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

It was not immediately clear how the money would be divided among the three.

Seaspan’s Tim Page, vice-president of government relations, welcomed the announcement, but cautioned that there’s still a 15-day waiting period during which a competitor could step forward to bid on the project.

“I just want to make sure that we’re not jumping for joy before we should be jumping for joy,” he said. “But it’s a good day for Seaspan’s Victoria Shipyards.

“It’s a recognition by the federal government of a long-standing and excellent working relationship that’s been established between us and the Royal Canadian Navy.”

Page said Victoria Shipyards, which employs about 1,100 people, has been refitting and repairing Halifax-class frigates since the mid-1990s.

There are currently five frigates on the West Coast. Page said maintenance on each vessel can take up to a year and employ about 400 tradespeople.

“I think they’re intended to be docked every five years in accordance with the program’s schedule for the class,” Page said.

“So if it begins in 2020 and it ends in 2040, then there’s the likelihood of three separate dockings for each of the five expected frigates.”

Phil Venoit, president of the Vancouver Island Metal Trades Council representing unionized shipyard workers, said it was good to see the federal government investing in the navy. “This is all great positive news and it will continue to help provide for jobs in the shipbuilding and repair industry,” he said. “We’re excited to continue to do the work, that’s really what it boils down to.”

George MacPherson, president of the Shipyard General Workers’ Federation, said the contract will mean stable, predictable jobs for people well into the future. “It’s nice to see that Davie got in there this time as well,” he said.

“That’s the three main yards in the country being looked after.”

East Coast union officials were less upbeat. David Baker-Mosher, president of the Unifor Marine Workers Federation Local 1 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 to split the work could mean layoffs at Irving. “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 Halifax Shipyard today.

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 Frédérik Boisvert said.

Ottawa has faced 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 an 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 among 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.”

The Royal Canadian Navy’s Atlantic fleet is based at CFB Halifax while the Pacific fleet is based at CFB Esquimalt.

Hansen said that the decision to split the work harks 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,” which led to repeated gaps in work and layoffs, he said.

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.” He said “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.”

Byers said 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.”

Conservative Leader Andrew Scheer, in Quebec City to meet with Premier François 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.”

The federal government has said the work on frigates is necessary while the navy awaits delivery of replacement Canadian Surface Combatant ships.

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