OTTAWA — There were celebrations Wednesday on the east and west coasts and angst in Quebec as the federal government divvied up a $33-billion shipbuilding bonanza.
Irving Shipbuilding of Halifax will become the prime contractor for the navy’s new warships, giving the yard a guaranteed shot at $25 billion in contracts over the next 30 years — a stunning economic injection into Nova Scotia’s often moribund economy.
The decision was greeted almost deliriously with the verve of a lottery win in a province where its last great economic hope — offshore natural gas — fizzled.
At the opposite end of the country, Vancouver-based Seaspan Marine Crop. won the roughly $8 billion in contracts for non-combat ships. The win was celebrated with equal enthusiasm.
But there was disappointment in Quebec, where the announcement created an immediate divide in the Opposition NDP caucus. The financially troubled Davie shipyard of Levis, Que., the country’s oldest shipbuilder, was left out of the program, but will be eligible for roughly $2 billion in smaller vessel contracts.
Those will allocated later and the NDP demanded that process be accelerated.
The Harper government pledged to keep politics out of the process by having four senior bureaucrats evaluate the bids and hiring a fairness monitor and an accounting firm to ensure an unbiased selection process.
Politicians were even cut out of the initial announcement, which was delivered by the deputy minister of Public Works.
“The two successful bidders submitted the very best proposals,” Francois Guimont said in a televised news conference where anticipation was pumped up by a long description of the hoops bureaucrats jumped through to ensure impartiality.
“We have a process that is open, fair and transparent,” Guimont repeated.
Both Public Works Minister Rona Ambrose and Defence Minister Peter MacKay hailed the decision late Wednesday and said the win was based on merit.
The pair heard about the decision after the shipbuilders had been notified.
The arm’s length process could serve as model for future military procurements, which have for years been plagued by delays and cost overruns.
“I think there are lessons to be learned obviously,” said MacKay.
New Democrat MP Peter Stoffer, the party’s longtime shipbuilding critic, said he is satisfied politics did not come into play.
“We’re very pleased. This is a very good day for Canada,” Stoffer crowed, noting he’s been pushing for this for 14 years.
But there was dismay among Quebec New Democrats, who make up the bulk of the party’s caucus. The announcement was the first big test for the party since Nycole Turmel took over as interim leader in the wake of Jack Layton’s death in August.
“This is great news for Nova Scotia and British Columbia and I congratulate them wholeheartedly,” said Turmel, in statement.
But she added: “This government announcement leaves our Quebec area shipbuilding in a more fragile position.”
Earlier in the day, she said she believed that the contracts should have been divided among the three competitors.
A roar of delight erupted from a tent at the Irving Shipyard along Halifax’s harbourfront, where hundreds of shipyard workers gathered to await the decision.
“Today marks the beginning of a brighter future for Nova Scotia,” said a beaming Premier Darrell Dexter. “A future that sees an entirely new generation of shipbuilders, a future that sees our sons and daughters be able to come home from the West.”
The contract will help the province turn a corner on 20 years of slow economic growth, Dexter said.
Jim Irving, CEO of Irving Shipbuilding, said: “To every Nova Scotian and Canadian who put up a lawn sign, put a pin on the electronic map or sent us words of encouragement, we can’t thank you enough.”
In British Columbia, cheers erupted from provincial legislators as the announcement was made.
“You know what? Despite the fact that I was absolutely confident throughout the process, you’re still on the edge of your seat,” said an elated Premier Christy Clark.
“It was like the Olympics there, don’t you think? Trying to wait for them to get through all the stuff that had to happen before they finally made the announcement ... You know what this tells us. It tells us that Canada works, so B.C. can get to work.”
A lot of work still needs to be done in the wake of Wednesday’s announcement. Now that the federal government has identified its preferred contractors it gets down to the nitty gritty of negotiating individual contracts for the backlogged myriad of ships.
Irving Shipbuilding will enter talks with the federal government with hopes of starting production by the end of next year.
Halifax Shipyard has been in operation since 1889. Irving Shipbuilding has built tugs and offshore supply vessels for clients around the world, as well as 80 per cent of Canada’s current fleet of surface warships.
The federal government has tried for years to flatten out the boom-and-bust cycles of the shipbuilding industry, which has struggled since the last major warship project ended in the 1990s.
The Canadian Association of Defence and Security Industries, which represents 860 companies, said the announcement was good news for Canadian workers in the defence and security sectors.
“We strongly support the government’s decision to build its naval and coast guard fleets in Canada and to manage their production in a way that mitigates the boom-and-bust cycles normally associated with ship fleet construction,” said association president Tim Page.
Ambrose said the bidders had to demonstrate how they would distribute work across the country.
“The benefits of this strategy to the Canadian economy are truly staggering,” she said. “This will result in high-quality jobs for decades to come.”
The complex evaluation process gave the most weight to a shipyard’s existing capacity and its plans for executing the work, said senior government officials who briefed the media before the announcement.
The bidders were also asked to spell out how they would foster long-term innovation to return Canada to the cutting edge of shipbuilding.
The process actually saw an unprecedented level of co-operation among the usually cutthroat yards, who’ve suffered through years of withering business, an official said.
The question of whether or not the federal treasury will be able to afford all of those ships over the coming decades was largely ignored amid the celebration.
Peter Cairns, of the Canadian Shipbuilders Association, said the deal contains protections for the yard in case future governments get cold feet, but trying to plan decades worth of work is fraught with uncertainty.