Ottawa misses latest deadline on inking deal with Quebec shipyard for icebreakers

Ottawa has quietly missed its own deadline to secure an agreement with a Quebec shipyard so it can begin work to replace the Canadian Coast Guard’s aging icebreaker fleet.

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The government said last summer that pending successful negotiations, it expected an agreement by the end of the year confirming the inclusion of Chantier Davie in Canada’s multi-billion dollar ship procurement program.

That would have paved the way for Davie to build seven new icebreakers, which the Coast Guard desperately needs to replace their existing fleet before mechanical problems force ships to retire.

However, the procurement department, which is leading the negotiations, says talks with the Levis, Que., shipyard are still ongoing.

“Negotiations between the Canadian government and Chantier Davie are ongoing and specific details on the status of the negotiations cannot be released at this time,” ministry spokeswoman Stefanie Hamel said in an email.

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“The qualification process is expected to be completed in 2023.”

The missed milestone is the latest in a series of delays since Ottawa announced in December 2019 that Davie was the only shipyard to qualify for the Icebreaker contracts, which are expected to be worth billions of dollars.

Government officials said at the time they expected a final deal to iron out the details by the end of 2020. They have revised their target several times since then, in part to accommodate Davie so the company could provide documents in support of his qualified bid.

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Davie spokesman Denis Boucher referred questions to the federal government, but said in an email: “There is nothing to worry about.”

But every day that passes increases the risk that one of the Coast Guard’s decades-old icebreakers will break down, disrupting maritime traffic and commerce on the St. Lawrence Seaway and the Great Lakes, or research and supplies in northern Canada.

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Conservative Senator Leo Housakos asked Fisheries Secretary Joyce Murray earlier this month about these repeated delays.

“Every year for the past three years, your government has promised to sign an agreement with Davie,” he said in French.

“Every year it has not kept its promise. Minister, why were you unable to sign an agreement and how does this failure affect the 2030 delivery date?”

Officials say they are taking various measures to prevent a gap in federal icebreaker capability deployment, including Davie’s purchase of three used vessels.

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

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

These include the 54-year-old CCGS Louis S. St-Laurent heavy icebreaker, which serves as the Coast Guard flagship.

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“The senator pointed to the Arctic, where it is critical that Canada has the tools and capabilities to protect our waters, borders and ecosystems,” Murray told Housakos. “And that’s exactly why we’re making historic investments.”

But despite those investments, the Coast Guard has lost several key vessels to age while awaiting replacements. Including the most important ocean research vessel, the 59-year-old CCGS Hudson, which was retired last year.

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

Boucher said it was too early to say what impact the ongoing talks would have on Davie’s delivery of the seven icebreakers that are expected to be built, saying: “It would be speculative at this point to determine if they could be affected.” .”

During a parliamentary committee meeting last month, at which MPs were told talks were in their final stages, Coast Guard Commissioner Mario Pelletier said the target was to start cutting steel in 2025 .

“As we get closer to 2025, we will be able to assess whether there will be deviations and take some intermediate measures like the ones we have now,” he said. “If we need to consider further interim measures, we will.”

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Davie’s road to potentially joining the federal shipbuilding plan has been a long and winding one.

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It was originally dropped from the shipbuilding plan after 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 begin piecemeal work, including building two federal ferries and providing several used vessels for the Navy and Coast Guard.

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

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At the same time, Seaspan was struggling to meet its delivery schedules due to mismanagement by both the Vancouver shipyard and the federal government. Meanwhile, the Coast Guard fleet was declining.

In this regard, the Liberal government announced in August 2019 that it was adding a third shipyard to the plan to build Canada’s next icebreaker fleet, and formally invited shipyards to express their interest.

Ontario shipyard Heddle Shipyards wasted no time in blaming the government for stacking the deck in Davie’s favor. However, the Canadian International Trade Tribunal was prevented from investigating Heddle’s complaint after Ottawa invoked a special exemption.

In December 2019 the government announced that Davie is the only shipyard that meets their requirements.

This report from The Canadian Press was first published on March 16, 2023.


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