Blogs & Comment

Avoiding Bristol Aerospace II

The federal Tories' $35-billion plan to refit the navy (and, btw, revive Canadian shipbuilding) walks a political tightrope.

(Photo: Andrew Vaughan/CP)

Seldom noticed in a country with a largely continental population and orientation, Canada has the longest coastline of any country in the world. But it’s hard to ignore the $33 billion to $35 billion the federal government is about to start spending updating the navy and coast guard fleets. And for a government born and raised out of aversion to Liberal/Mulroney PC-style pork-barrelling, it could become a test of its free-market ideals.

Four shipyards from as many provinces are shortlisted to submit bids by July 7, which already suggests the government is factoring in considerations other than price, quality and service. Like other forms of manufacturing, shipbuilding has largely migrated offshore, to places like South Korea and the Baltic Sea. Public-sector fleet operators like BC Ferries have long since acknowledged this fact and (the exception proving the rule being former B.C. premier Glen Clark’s disasterous foray into Fast Cat ferries in the 1990s) sourced new vessels from outside the country. It’s not as if defense is an exception you want to source domestically; consider the Harper government’s choice of fighter jet suppliers.

In announcing the National Shipbuilding Procurement Strategy last summer, the government telegraphed its intention to “create and maintain an effective and efficient long-term shipyard capability in Canada.” One shipyard would be chosen to build the combat ships and another to build non-combat craft, and other shipyards would have the chance to bid on an estimated $500 million a year in maintenance work.

Nonetheless when Premier Christy Clark tried to raise North Vancouver-based Seaspan Marine Corp.’s bid with the prime minister in June, she was rebuffed with the line that the decision of a supplier will be based on the bid’s merit alone.

The politics get still more tricky when you consider the Quebec government’s no-tender lifeline of two ferry contracts and $6 million to insolvent Davie Shipyards of Levis, Que., in order to keep its doors open long enough to bid. Davie has applied for an extension of the bid process to September, something that’s opposed not just by Seaspan and Irving Shipbuilding Inc. of Saint John, N.B., but also by rival Quebec shipyard Groupe Maritime Verreault Inc. (The fourth confirmed contender is Seaway Marine & Industrial Inc. of St. Catharines, Ont. Another company on the shortlist announced last fall, Kiewit Offshore Services, based in Milton, Ont., appears to have dropped out of the process.)

Students of political history will remember that it was the Mulroney Tories’ choice of Quebec-based Canadair, not a panel-recommended bid by Manitoba’s Bristol Aerospace, in a fighter jet maintenance contract that really sparked the Reform movement that has grown into today’s Harper majority. The government knows it must tread carefully here.