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Ottawa signs umbrella ship deal with Irving

The federal government has signed an umbrella agreement with the Irving shipyard in Halifax, a step towards building Canada's next fleet of navy ships.


February 16, 2012
by CANADIAN PRESS

HALIFAX: The federal government has signed an umbrella agreement with the Irving shipyard in Halifax, a step towards building Canada’s next fleet of navy ships.

Defence Minister Peter MacKay said in a news release that the agreement will help ensure that negotiations with suppliers are fair and reasonable.

In October, Ottawa announced that the Halifax shipyard would receive the lion’s share of its $35-billion national shipbuilding procurement project.

Under its $25-billion deal, the Irving shipyard will build 21 combat vessels.

The Seaspan Marine Corp. shipyard in Vancouver will construct seven vessels under an $8-billion contract for non-combat ships.

Another $2 billion for smaller vessels is yet to be allocated to another shipyard.
Prime Minister Stephen Harper had already announced in January that Ottawa had an agreement in principle with the shipyards.

The news release says the deal sets out long-term arrangements for how individual ship contracts will be negotiated.

Irving spokeswoman Mary Keith says the efforts now will shift to finalizing details on the Arctic offshore patrol vessels – the first ships that will be constructed.

“Our focus now is on finalizing the contract, design and engineering for the Arctic offshore patrol vessels. Concluding the umbrella agreement also allows us to undertake the next steps in infrastructure improvements at the shipyard,” she said in an email.

MacKay repeated his message that the federal project will create needed jobs in the Atlantic region.

“This agreement helps the parties negotiate fair and reasonable contracts, and will lead to well-paid, highly skilled jobs for Nova Scotians across our great province,” he said.

Harper said during the January news conference that the next fleet of navy ships will contain components designed by Canadians, but the program has “to minimize design costs.”

NDP MP Peter Stoffer has said there are concerns that some of the best-paid work on the ships may end up being shipped offshore.

Stoffer, the party’s shipbuilding critic, said when the national procurement strategy was first announced last year, it wasn’t clear whether the vessel designs had to be done in the Canadian shipyards or whether they could use off-the-shelf designs from other countries.

Ottawa’s goal in rolling out the national shipbuilding procurement program is to end the boom and bust cycle that has hampered shipbuilding in Canada in the past. The industry has struggled since the last major warship project ended in the 1990s.

The plan aims to see a steady flow of work over the next 20 to 30 years in order to sustain highly skilled jobs.

© 2012 The Canadian Press