Parliamentary Affairs reporter Daniel Leblanc, writing in the Globe and Mail, says that “The federal government will award a third of the work on $1.5-billion of maintenance contracts on its military frigates to the Davie shipyard in Quebec, cementing the shipyard’s anticipated partnership with two other firms on Canada’s national shipbuilding strategy, federal officials say … [and] … The move comes amid pressure on Ottawa to provide additional contracts to Davie, which is located south of Quebec City in a part of the country heavily courted by all political parties during federal elections. Davie has long complained of unfair treatment under the government’s shipbuilding strategy.”
I think that the federal government was right to exclude Davie from the original national shipbuilding procurement strategy in 2011. At the time, Davie was in poor financial shape due to decades of mismanagement which was, in turn, due in part to a “rule” that was in place from the 1970s, that said that about 25% of all contract spending had to go to Québec. The governments of the day (Liberal and Conservative) didn’t care what was being built or bought as long as Québec companies got ¼ of the money. It was a result of Pierre Trudeau’s misguided bastardization of the notion of fiscal federalism.
I think that this decision, confirmed by Public Services and Procurement Canada, is also right. Chantier Davie has been turned around, partly by foreign ownership, and is now, a vital part of Canada’s shipbuilding potential.
We need to note that this contract is for Canada’s current fleet of 12 Halifax class frigates, launched in the late 1980s. They will be in service until the 2040s. The new, larger Canadian Surface Combatants, AKA Type 26 Global Combat Ships, which will be built in Halifax starting in the 2020s will have a separately contracted maintenance support system. I expect that Irving Shipbuilding, the Halifax based builder, which is also building the Harry DeWolf class arctic offshore patrol ships, will fight hard to keep the maintenance work for itself; I also expect that the government will want, at least, both East and West coast maintenance contracts.