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Some buildings being demolished at the shipyard are more than 100 years old.

Andrew Vaughan/THE CANADIAN PRESS

Irving Shipbuilding has started its $300-million modernization of the Halifax Shipyard to accommodate the building of vessels for the federal government, but Ottawa will not say exactly how many Arctic patrol ships it can afford.

On Wednesday, Irving officials showed off to the media the site along Halifax Harbour where the Arctic Offshore Patrol Ships and later the Canadian Surface Combatant Ships will be built. They say they will begin cutting steel in the second or third quarter of 2015 and the first patrol vessel will be delivered by 2018.

But Public Works Minister Diane Finley, who was in Halifax as part of the Irving event, would not specify the number of patrol ships that will be made. The government had initially indicated that six to eight patrol vessels would be built when it awarded Irving the $25-billion contract in 2011 to build 21 combat vessels. Since then, however, it has backed away from giving an exact number.

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"The final details are yet to be determined based on the design, which hasn't yet been finalized," Ms. Finley said. "That is the process that we are in right now."

The government signed a contract with Irving last March to design the Arctic patrol ships. It is divided into seven phases and could take 30 months.

Meanwhile, Irving is pushing ahead with the shipyard construction. Officials bragged that once the two-year construction project is complete, Halifax will have the most "modern shipyard in North America." Some of the buildings being demolished are more than 100 years old.

Among the facilities being built are a 520-space car garage and a 47-metre-high "Ultra Hall" where the final production – under cover – on the largest ship sections will take place. The hall is designed to accommodate crane lifts of 360 metric tonnes.

Charles Clow, the shipbuilder's facilities modernization manager, characterized it as "one of the largest construction programs taking place in Atlantic Canada."

So far, Irving has awarded contracts worth $127.7-million in the shipyard modernization. Jim Irving, co-chief executive officer of J.D. Irving Ltd., said an additional $55-million will be spent before the end of the year, with $118-million more during 2014 and 2015. "We're doing it once and we're doing it right," he said.

In March, 2012, the Nova Scotia government provided Irving with $304-million in aid – $260-million is a forgivable loan to help upgrade the yard for the ships and $44-million is to be repaid.

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When the federal government contract was signed, much was made about the fact that it would end the shipbuilding industry's boom and bust cycle. However, Irving officials noted on Wednesday that there will be "short-term" layoffs.

About 900 of Irving Shipbuilding's 1,200 employees are at the Halifax Shipyard, but Scott Jamieson, vice-president of programs, would not predict the number of layoffs. "We hate to see our skilled employees go, but unfortunately it is part of the shipbuilding industry's historical ebb and flow," he said.

Mr. Jamieson said the layoffs will continue until the construction of the ships for the government is under way. It is expected that at the peak in 2020 and 2021, there will be between 2,000 and 2,500 employees.

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