Canadian Manufacturing

Feds choose Davie for sole-sourced Navy supply ship retrofit

The stop-gap plan to retrofit an existing vessel has some warning it will cost the federal government more in the long run



OTTAWA—Quebec’s Davie Shipyard is one step closer to being awarded a long-sought federal shipbuilding contract but Defence Minister Jason Kenney warned Tuesday that talks between the two sides aren’t over yet.

Kenney said in hopes of speeding up the process of procuring a temporary supply ship for the Royal Canadian Navy, the government is skipping an open call for tenders and looking only at Davie.

The plan would be to retrofit an existing vessel to “bridge the gap” until the government’s joint support ships are operational in 2021, Kenney said in Ottawa.

“This is good news for (Davie workers) because it’s an indication of the intention of the government to sign a potential contract with the Davie Shipyard,” he said.

Kenney said Davie’s proposal to retrofit the vessel is incomplete, meaning more discussions are needed between the shipyard and the government.

The preliminary talks are aimed at determining if Davie can provide an interim solution acceptable to the navy’s standards and needs.

“The federal government isn’t going to sign a blank cheque,” Kenney said, insisting any deal has to be right for the military and for taxpayers.

There has been tension between the federal government and Quebec over shipbuilding contracts ever since Davie was passed over in 2011 in favour of shipyards in British Columbia and Nova Scotia for highly lucrative federal contracts.

In May, Davie announced it would lay off 200 workers, leading Quebec Economic Minister Jacques Daoust to say the province was tired of “begging” Ottawa for a federal shipbuilding contract.

Daoust questioned at the time whether the federal government was stalling until closer to the scheduled October federal election.to announce a contract for Davie, whose yards are located across the river from Quebec City, in the riding of Conservative minister Steven Blaney.

Kenney said the announcement was “absolutely not” about politics and that a decision should be made within “months.”

The navy needs supply ships to provide fuel, ammunition, water, spare parts and food to various vessels at sea and to support task group helicopters.

The navy is retiring its two replenishment ships, HMCS Preserver and the fire-damaged HMCS Protecteur, without replacements ready to sail, despite a decade-long replacement program.

Critics have warned that a stop-gap measure may end up costing the federal government more in the long run.

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