Higgs argues government isn't responsible for million-dollar shipyard upgrade in Bas-Caraquet

Premier Blaine Higgs is rejecting suggestions that the province is legally obligated to spend another $1 million to help build a slipway at the controversial government-owned shipyard in Bas-Caraquet.

Last week shipyard tenant Groupe Océan announced it will lay off all 37 of its workers at the end of August because the lack of a slipway, a type of ramp, prevents it from bidding on contracts to build and repair larger boats. 

But Higgs told Radio-Canada that the shipyard's contract with the company requires no such thing.

"I've consulted with our legal department and I do not have an obligation that I have to build this ramp," he said.

I would like to renegotiate this whole deal because it's not a good deal for New Brunswick. It's a good deal for Groupe Océan.- Premier Blaine Higgs

The slipway would accommodate larger boats being moved from the yard into the water. Groupe Océan is one of several private companies leasing space at the New Brunswick Naval Centre.

Groupe Océan's spokesperson Philippe Filion said last week the company may sue over the province's refusal because the slipway is required under its contract with Provincial Holdings Ltd., the government entity set up when the province took over the shipyard in 2016. 

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"This is a legal document," Filion said. 

The federal government has offered $4 million to help fund the slipway if the province provides the remaining $1 million.

Higgs said if Groupe Océan had ship orders already secured for the yard, "then we'd want to talk about it." But he said he's asked and there are no pending orders.

Getting 'as much work as possible'

The company said last week the workers will be laid off when they finish building a floating drydock that will be shipped to one of its other facilities in Quebec.

But Higgs said he believes the company will finish work on the drydock in Quebec — work he said should be done in Bas-Caraquet to give employees there as much work as possible. 

The plan has always been for Groupe Océan to use the drydock in Quebec. Higgs said it amounts to taxpayers here subsidizing infrastructure that will be used in another province to compete with New Brunswick.

But the company said it was built in Bas-Caraquet so that workers in the area could learn new skills that would allow them to work on other projects in the future.

The premier suggested in the interview the only reason Groupe Océan needs the slipway built is to allow the drydock to leave. 

No long-term benefit for New Brunswick

"If it's purely for one purpose, to float this thing and get it into Quebec, that isn't any long-term benefit for New Brunswick or the shipyard in Bas-Caraquet," he said. 

"I would like to renegotiate this whole deal because it's not a good deal for New Brunswick. It's a good deal for Groupe Océan." 

The premier said he's willing to talk to any private-sector company that is prepared to operate at the shipyard in the long term, without relying on constant government subsidies.

The shipyard was launched in 2014 by two municipalities with the support of the Progressive Conservative government of the day. It was taken over by the Liberal government in 2016 after it ran into money problems.

Previous federal and provincial governments have poured millions of dollars into the facility.

The Village of Bas-Caraquet and the Town of Caraquet, the original owners of the facility, are working on a new business plan for the yard that they plan to present to the province. 

Government officials said earlier this year the naval centre had a deficit of $140,000 in 2017-18.