GATINEAU, Que. – Federal Conservatives gathered the country’s shipbuilders and a smattering of defence contractors behind closed doors Monday, hoping to salvage tens of billions of dollars worth of badly needed navy and coast guard vessels.
The two-day conference began with four federal cabinet ministers calling on often cut-throat competitors to work hand-in-glove with the federal government to roll out as many as 50 large ship projects – worth an estimated $40 billion – over the next 30 years.
The federal government began searching for a different approach to the complex and time-consuming construction process in the wake of the failure of two high-profile projects last year.
Both National Defence and Fisheries and Oceans were sent back to the drawing board on projects involving the construction of three naval joint supply ships and coast guard mid-shore patrol boats when bids from the industry came in far over the budget envelop the Conservatives had set aside.
It was a embarrassment, particularly for the navy, which continues to rely on 40-year-old, steam-powered supply ships that were to be retired in 2012.
The coast guard was equally put out.
“I know that it was frustrating and costly for the companies that bid (and) it was frustrating for us as it delayed getting much needed new vessels,” said Fisheries Minister Gail Shea, whose department manages the coast guard.
She said she hoped the conference means everyone involved will work to “get it right.”
Defence Minister Peter MacKay said federal officials from both departments will lay out all of their shipbuilding needs, including the number and type of vessels, specifications, as well as what the federal government is prepared to spend.
Defence analysts have complained that the Conservatives are forcing both the navy and coast guard to shoehorn their purchases into a pre-defined budget, rather building ships that make sense.
The most recent example is the Harper government’s pet project to construct six Arctic patrols ships. In order to stay within budget, the navy recently watered down its expectations of what the light icebreakers, meant to enforce Canada’s sovereignty in the North, can do.
MacKay argued Monday that mapping out a long-term strategy allows companies to plan well into the future and to avoid the boom-and-bust cycles so often associated with Canadian government shipbuilding programs, which have often been done in batches.
MacKay, Public Works Minister Christian Paradis and Industry Minister Tony Clement each played up the economic benefits of a long-term strategy for an industry, which has lost 50 per cent of its workforce over the last few years.
Where once shipyards on both coasts and the Great Lakes were humming, now there are only about 5,000 skilled tradesmen laying keel and bending steel to construct ships.
What isn’t clear is how the Conservatives will guarantee that future governments will buy into their plan and deliver the projects.
In 1993, Jean Chretien’s government cancelled a Conservative-era plan to buy new shipboard helicopters for the navy, and many in the shipbuilding industry point to that example to highlight their concerns.
Convincing companies to share the work, rather than beat up each other for contracts is another hurdle, one that MacKay tried to smooth over on Monday.
“There have been examples in the past where companies have been at odds,” he told reporters.
“While competition is healthy, there was a feeling (among the industry) almost of desperation that if you didn’t get one contract you were going to be excluded from all others. By having this kind of open, transparent forum we’re saying there’s enough work for everybody.”
MacKay, a Nova Scotia MP, doesn’t have to look far from home for an example of the cut-throat nature of marine industry as Irving-owned Halifax Shipyards recently filed an appeal with Federal Court over the loss of a portion of a $1.5-billion submarine maintenance contract to a West Coast consortium.
