Irving Shipyards wins $25-billion shipbuilding deal

HALIFAX: Hundreds of shipyard workers in Halifax roared with delight after hearing on October 19 that Nova Scotia won its bid to build the navy’s next fleet of warships. They huddled inside a tent at the Irving Shipyard along the city’s harbourfront, clapping and smiling as the federal government announced their shipyard won a $25-billion contract to build new combat ships.

The deal is the biggest chunk of a $33-billion federal shipbuilding program. Vancouver-based Seaspan Marine Corp picked up $8 billion in contracts for non-combat ships. Another $2 billion for smaller vessels is headed later to another shipyard yet to be chosen.

Jim Irving, the shipyard’s CEO, said the deal was boosted by community and political support throughout the province that backed the “Ships Start Here” campaign, which was launched to show local support for the bid. “Everybody in Nova Scotia who has put a sticker on their car, a lawn sign in front of their house, whatever you’ve done to help us…you’ve been right there with us from the start,” Irving said.

Meanwhile, the Upper Lakes Group announced a bid by its Lévis, Québec-based Chantier Davie Canada Inc was not selected. The Davie Canada bid was supported by a joint venture with SNC-Lavalin. “This is a disappointment, but NSPS was only one component of our plan for Davie Canada,” said Richard Bertrand, head of the Upper Lakes Shipyards division and president and CEO of Davie Canada.  “We, together with our joint venture partner SNC-Lavalin, are committed to a long-term plan for this shipyard.”

Davie Canada has a contract for two new ferries for Societé des traversiers du Québec (Quebec Ferry Corporation).  Negotiations are in progress for other commercial contracts.

Ellen Farrell, a management professor at Halifax’s Saint Mary’s University, said it was one of the largest shipbuilding contracts ever awarded. “We can expect that it would have very far-reaching effects,” he said. Farrell said winning the big contract would be exceptional because there would be a whole generation of shipworkers who would have permanent employment. “Studies out of the US show that a dollar in shipbuilding has one of the most lucrative returns in the long-run of a dollar spent anywhere.”

A study by the Conference Board of Canada said the combat ship contract would create 11,500 additional jobs in Nova Scotia during the peak of construction in 2020. A second study by Jupia Consultants said the average personal income in the province would increase by $447 annually. Both studies said spinoffs would be shared across the province, the region and the country.

Ugurhan Berkok, a politics and economics professor at the Royal Military College in Kingston, said about $5 billion of the total $25-billion contract will be spent in Nova Scotia, where the Halifax shipyard will undergo a substantial upgrade. The rest of the money will be spent in Ontario, Quebec and the United States, where contractors will be hired to build the ships’ combat systems, electronics and propulsion units, he said.

“The Maritimes don’t have those industries,” Berkok said, adding US defence contractor Lockheed Martin will likely join forces with Irving Shipbuilding as the project moves ahead. The two companies are already working together on a tidal energy project in Nova Scotia.