Lévis shipyard formally added to federal shipbuilding plan after lobbying, delays

Ottawa and Quebec shipyard Chantier Davie finally have a deal, after years of lobbying followed by years of delays.

The federal government is formally adding Davie to its multi-billion-dollar ship procurement plan, Prime Minister Justin Trudeau announced Tuesday morning during an event at the shipyard in Lévis, Que.

Negotiations will now begin around the construction of seven much-needed new icebreakers for the Canadian Coast Guard, Trudeau said.

“We’re announcing that our government has reached an agreement with Chantier Davie for the shipyard to become the third strategic partner under the national shipbuilding strategy,” Trudeau said.

“This means that we’re officially starting negotiations for contracts that include the construction of six icebreakers and one polar icebreaker for the Canadian Coast Guard.”

Tuesday’s deal is the result of a heavy lobbying effort by the shipyard and Quebec government after Davie was originally excluded from the shipbuilding plan in 2011.

It also follows years of missed deadlines. The government had originally aimed to have finalized an agreement adding Davie to the shipbuilding plan by the end of 2020, only to revise that schedule several times.

While officials played down the impact of those delays, every passing day raised the risk of one of the coast guard’s decades-old icebreakers breaking down, hindering maritime traffic and trade in the St. Lawrence Seaway and Great Lakes or stalling research and resupply in Canada’s North.

Trudeau did not provide a timeline for when the government expects to have formal contracts for the start of construction on the new icebreakers fleet.

Officials have previously said they were putting various measures into place to prevent any gap in the provision of federal icebreaking capabilities, including the purchase of three second-hand vessels through Davie.

Originally ordered in August 2018, the last of the three Norwegian-built icebreakers was only delivered by Davie late last year. By that point, the cost to Canadian taxpayers had soared from $610 million to nearly $1 billion.

The government has also spent hundreds of millions of dollars in recent years to extend the life of its fleet, most of which was supposed to have been retired by now.

That includes the 54-year-old CCGS Louis S. St-Laurent heavy icebreaker, which serves as the coast guard’s flagship.

But despite such investments, the coast guard has lost several key vessels due to age while awaiting replacements. Among them was its most important ocean research vessel, the 59-year-old CCGS Hudson, which was retired last year.

Hudson’s replacement is being built by Vancouver-based Seaspan Shipyards. Its cost has ballooned from an estimated $100 million to $1 billion, and won’t be ready until at least 2025.

During a parliamentary committee meeting in February, coast guard Commissioner Mario Pelletier said the aim is to start cutting steel in 2025.

“As we get closer to 2025, we’ll be able to assess whether there’s some slippage and come up with some interim measures, such as the ones we have in place right now,” he said. “If we need to look at more interim measures, we will.”

Davie’s path to joining the federal shipbuilding plan has been long and winding.

It was initially excluded from the shipbuilding plan following a 2011 competition that selected Irving Shipbuilding in Halifax to build the navy’s new warships, and Seaspan to build two new naval support ships and the bulk of the coast guard’s new fleet.

The Quebec shipyard was able to pick up piecemeal work, including the construction of two federal ferries and the provision of several second-hand ships for the navy and coast guard.

Davie made no secret of its desire for more, and with help from allies in Quebec City and the opposition benches in Ottawa, the company lobbied the federal Liberal government hard for official inclusion in the shipbuilding plan.

At the same time, Seaspan was struggling to meet its delivery schedules thanks to mismanagement by both the Vancouver yard and federal government. All the while, the coast guard’s fleet was becoming increasingly decrepit.

It was in this context that the Liberal government announced in August 2019 that it was adding a third yard to the plan to build Canada’s next icebreaker fleet, and formally called for shipyards to indicate their interest.

Ontario shipyard Heddle Shipyards wasted no time accusing the government of stacking the deck in Davie’s favour. Yet the Canadian International Trade Tribunal was blocked from investigating Heddle’s complaint after Ottawa invoked a special exemption.

In December 2019, the government announced Davie was the only shipyard to meet its requirements.