Victoria shipyard among 3 awarded $7B in contracts with federal government

The federal government has awarded contracts worth $7 billion to three shipyards for maintenance and repair work on Royal Canadian Navy frigates.

Public Services and Procurement Canada today announced the advanced contract award notices to Seaspan Victoria Shipyards in Victoria, Halifax's Irving Shipbuilding Inc., and Davie Shipbuilding in Levis, Que.

The contracts are to maintain Canada's 12 Halifax-class frigates until the end of their operational lives, 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.

Good news for Seaspan 

For Seaspan Victoria, the announcement came as good news, although they must wait for 15 days during which time other federal companies can ask the federal government for a chance at the contract.

Seaspan representative Tim Page said Thursday's news endorses work the company has already done on the Halifax-class vessels.

"We're proud that we've been able to continue to demonstrate our performance on budget and on schedule to deliver back to the navy the frigates that they bring into our care," Page said. 

Although it is not clear how much Seaspan's part of the contract would be worth, Page said the work would provide stable employment for 400 of their 1,100 employees at the shipyards.

'It's both ineffective and uneconomical'

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 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.

Halifax raises concerns

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.

With files from CBC's Liz McArthur