Feds grant $7B in contracts to three shipyards for Royal Canadian Navy ship maintenance

OTTAWA – The federal government has awarded 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 on Thursday announced the advanced 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 says 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.

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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.

Tweet This Click to share quote on Twitter: "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.

Tweet This Click to share quote on Twitter: "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 dividing the repair work between three yards 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.

Tweet This Click to share quote on Twitter: "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.

Last month, workers at Halifax’s Irving Shipyard raised concerns about repair work they currently do being transferred to Quebec.

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

The deal allows 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.