Stephen Harper turned up in British Columbia on Thursday to give a boisterous speech about the thousands of jobs and the revival of the province’s shipping industry that will come from Ottawa’s $35-billion shipbuilding project.
Résumés are already piling up at Seaspan Marine Corp.’s head office – 1,600 and counting – but the jobs and the infrastructure to support them don’t exist yet, and the North Vancouver yard is still far from any mass hiring plans.
Seaspan was one of two winning bidders last October for Ottawa’s $35-billion shipbuilding plan. The non-combat contracts fell to the West Coast, the military vessels will be built by Halifax’s Irving Shipbuilding Inc.
At the North Vancouver shipyard, about 60 workers in hardhats were arrayed on ladders in front of a giant Canadian flag as the Prime Minister spoke in a massive fabrication shed.
“This is work of national importance, and when you see the fine ships you have built, carrying Canada’s flag to the ends of the earth, you will be glad you had a part in building it,” Mr. Harper said.
Mr. Harper said an uneven flow of work had put the shipbuilding industry through boom-bust cycles that caused a drain of skills from the area as workers moved. “There is a better way. It is our government’s national shipbuilding procurement strategy through which we shall rebuild almost the entire fleet of the Canadian Coast Guard service, and the Royal Canadian Navy.”
For B.C., it is expected to mean nearly 4,000 new direct and indirect jobs over the span of the 25-year contract. Premier Christy Clark, although her government’s financial contribution has been small, has appeared at three media events in connection with the project.
Mr. Harper visited both the East and West Coast shipyards on Thursday to mark the signing of the so-called umbrella agreements with vessel builders, deals that officially give the two yards the right of first refusal to construct the ships they were chosen to build. The deal also allows the federal government to take over projects if either builder defaults.
“There are a lot of skilled men and women that want to work in our shipyard – that’s a great problem to have,” Seaspan CEO Jonathan Whitworth said in an interview Thursday.
Now the company has to manage expectations.
Building from fewer than 200 employees to a crew of thousands requires new infrastructure. The company is hiring human resources people first, and now with this week’s formal deal, Seaspan is advertising for technical people to start design engineering.
This week’s agreement “addressed things that both [government]ministers and concerned citizens of Canada have asked,” Mr. Whitworth said. “‘If we are going to put our support into these shipyards, what guarantees that the shipyards will perform?’”
To answer that question, the agreement also grants Ottawa unfettered access to shipyard accounting books for the life of the construction projects, a feature intended to head off cost overruns.
The hiring push won’t really begin until early 2013, when Seaspan expects to start cutting steel for its first ship under the federal contract, an offshore research vessel for the Department of Fisheries and Oceans.
The contract is a lifeline for B.C. shipbuilders. On the day the contracts were awarded, Mr. Whitworth conceded that his company desperately needed the work: “If we wouldn’t have won this, it probably would have been the death of the industry,” he said then.
Under the B.C. Liberal government, the province’s shipyards have been living in a subsidy-free world, competing in a sector where government subsidies are the norm. As a result, the provincially owned BC Ferries went to a German shipyard for its last three large vessels, citing a lack of infrastructure at home.
For Ms. Clark, who was not at Thursday’s event, Seaspan’s new contract is the best news she’s had since announcing her jobs strategy in the fall.
The B.C. government refused Seaspan’s request for a tax credit to offset the $200-million it needs to invest to bring its infrastructure up to snuff to deliver on this contract. Instead, B.C. offered skills training tax credits – the value of the incentive will be set out in next months’ budget. BC Ferries has also pledged $20-million to build capacity for the shipyard.