Canadian Manufacturing

Harper battles lobbyists on shipbuilding strategy

Outlining the behind-the-scenes battle between lobbyists and Public Works, the department leading the shipbuilding procurement.

OTTAWA—The Harper government wants companies vying for Canada’s $35-billion national shipbuilding procurement strategy to sign away their legal right to consult lobbyists, The Canadian Press has learned.

Angry lobbyists have ignored government demands and continue to work for the companies that hired them.

They’ve also privately taken the government to task for attempting to undermine their legal right to provide expert advice on negotiating with government, and ultimately attempting to influence policy.

Documents obtained by The Canadian Press detail the bitter, behind-the-scenes battle between lobbyists and Public Works, the department leading the shipbuilding procurement along with Defence, Industry and Fisheries and Oceans.

“The Company agrees that it will not use any lobbyist to pursue any matter that arises under or in relation to this Agreement without Canada’s prior consent,” says a draft agreement Public Works wants the winning companies to sign.

Ottawa will ultimately select two prime contractors for its 20-year national shipbuilding strategy. The shipyards will build new navy warships, coast guard cutters and other vessels.

Public Works Minister Rona Ambrose ruffled feathers recently when she told hundreds of defence industry players at a military trade show that companies that want to bid on the shipyards contract “have been asked not to engage lobbyists” in order that the competition be “completely arm’s-length of politics.”

In an Oct. 28 letter, Andrew Treusch, associate deputy minister at Public Works, asked companies to “voluntarily” agree not use lobbyists when bidding on the shipbuilding contract.

On Dec. 3, the Government Relations Institute of Canada—the lobby group for lobbyists—fired back with a scathing letter that said the use of lobbyists would not “compromise” the shipbuilding strategy.

“Moreover, your request that companies ‘voluntarily’ refrain from using lobbyists does not reflect the spirit or letter of the statement in the preamble of the Lobbying Act that ‘… lobbying public office holders is a legitimate activity,”’ wrote Charles King, the institute’s president.

“To the contrary, it would appear from your request that (Public Works) considers lobbying public office holders to be an illegitimate activity that is to be avoided in the interests of accountability and transparency.”

The following day, the government held its third meeting with the shipyards on its shortlist of qualified companies, part of an effort to solicit feedback from the industry. One slide, part of the government’s PowerPoint presentation, left no doubt about the government’s position:

“No use of lobbyist.”

It appears all lobbying abruptly stopped Feb. 10, three days after a request for proposals went out to the five shortlisted shipyards.

Six days later—and more than two months after the institute’s original complaint—Public Works replied, but did not back down from its tough line.

“My comments should not be perceived as stating that lobbying is not a legitimate activity,” Treusch wrote.

He called the shipbuilding strategy an “historic initiative” that was progressing well with five, day-long consultations with the five short-listed companies (one has since withdrawn). All have commented “favourably and publicly” on the fairness and transparency of the process.

He said the government had “no specific guidance” for companies, adding that “because the request is voluntary, no distinction will be made during the bid evaluation.”

Months earlier, Public Works asked Canada’s shipyards not to use registered lobbyists in their efforts to make a short list of five companies that have until July 7 to bid on the shipbuilding contracts.

The four companies in the running are Vancouver Shipyards, New Brunswick’s Irving Shipbuilding, Davie Yards of Quebec and Ontario’s Seaway Marine and Industrial. A fifth short-listed company, Kiewit Offshore Services of Ontario, has since withdrawn.

A top executive with Seaspan Marine, whose holdings include Vancouver Shipyards, suggested the no-lobbying clause was up for negotiation. But John Shaw, vice-president of program management, wouldn’t tip his hand.

“I’m not going to speculate on what we’ll agree and disagree on any contracts. I’m sorry. It’s a long way from being picked,” Shaw said in an interview.

“If you’re selected, you then enter into negotiations with the government over many different terms and conditions, and at the end of it, we will agree with the government on a contract.”

The registry of lobbyists lists 60 meetings with 65 members of Parliament, senators, political staffers and senior bureaucrats since the government announced the shipbuilding strategy last June.

Lobbyists and leading business figures would not speak on the record because there will be plenty more contracts to tendered in the new shipyards in the coming decades, to build everything from outer hulls of various vessels, their high-tech systems to their furniture.

Jim Patrick, treasurer of the government relations institute, said Ottawa’s attempts to ban lobbyists will leave companies at a disadvantage when it comes to negotiating future shipyard contracts.

“Nobody should go to court without a lawyer who understands court procedure. Nobody should negotiate with the government without a lobbyist who understands government procedure,” Patrick said in an interview.

“They can help shipyards manage the maze of red tape so they can focus on what they do, which is building ships and not navigating the bureaucracy.”

Photo: Davie Yards Inc.

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