Seaspan awarded $8 billion federal shipbuilding contract

ictoria and Esquimalt federal government West Coast-based Seaspan Marine Corporation an $8-billion non-combat shipbuilding contract.

Cheers were the order of the day in Victoria and Esquimalt after the federal government announced it is awarding West Coast-based Seaspan Marine Corporation an $8-billion non-combat shipbuilding contract.

The more lucrative $25-billion combat-vessel contract went to Halifax-based Irving Shipbuilding. Quebec-based Davie shipyard came away with nothing.

Seaspan, which owns Victoria and Vancouver Shipyards and the Vancouver Drydock, will build a non-combat naval fleet that includes Canadian Coast Guard ships, an icebreaker and joint-support navy ships.

“You always hope for the biggest but this is nothing to sneeze at,” said Esquimalt Mayor Barb Desjardins. “It would have been nice to get the $25 billion but $8 billion is going to provide us with some stability at the shipyard (as well as) jobs.”

She said the lucrative contract puts Esquimalt on the map, and the township’s industry and commercial sector are open for business.

Seaspan has said all along that the 20- to 30-year contract work will result in new and long-term jobs, and prompt capital infrastructure investment at the shipyards. The company planned to do most of the ship construction at its Vancouver yard beginning late 2012, early 2013, while 15 to 20 per cent of the workload will fall to Victoria Shipyards.

The contract “will be bringing good paying jobs to the region, jobs that go on and on,” said Victoria Mayor Dean Fortin, adding it will represent a boon to Greater Victoria’s shipbuilding and marine industry, which nets more than $1 billion in economic spinoffs each year. “This is a contract that will continue giving for a long time and it’s very exciting.”

Wednesday’s announcement is precedent-setting.

Not since the Second World War has the federal government awarded shipbuilding packages of this magnitude. Together the contracts, which make up the National Shipbuilding Procurement Strategy, are worth $33 billion.

“Building ships in Canada has historically been carried out on a project by project basis …,” said François Guimont, deputy minister of Public Works and Government Services Canada, who announced the news.

“While we felt we were more than capable of building the combat ships, we are honoured to have been chosen to provide non-combat vessels for the men and women of the Royal Canadian Navy and Coast Guard,” said Seaspan CEO Jonathan Whitworth.

The work is a win for B.C. since it will inject billions of dollars into the economy and create an average of 4,000 jobs over the next eight years, according to Seaspan.

“It tells us that Canada works, so B.C. can get to work,” Premier Christy Clark said at a meeting of the B.C. Liberal caucus, which erupted in cheers when the announcement was made from Ottawa.

“Eight billion dollars spent on shipbuilding, on the suppliers, $8 billion spent throughout the economy, and not just British Columbia’s economy,” she said. “This represents a really positive sign for our budget. You won’t see it in the next six or eight months, but its impact is absolutely going to be felt.”

Another $2 billion in federal dollars will be up for grabs for the construction of 116 smaller federal vessels. This work will be awarded on a project-by-project basis to companies other than Seaspan and Irving.

In addition, $500 million a year over 30 years will be available for the repair and refit of the vessels.

Ottawa estimates the fleet’s renewal will translate into jobs for 15,000 Canadians a year over the next 30 years.

The umbrella contract agreements will be assigned by end of the year, and following that individual ship construction contracts will be negotiated.

 

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