Davie Shipyards is seen from the St. Lawrence river in Levis, just across Quebec city, Wednesday July 20, 2011.Francis Vachon/The Globe and Mail
The Conservative government is forgoing a competition and turning to a shipyard in the Quebec City area to fill a major hole in Canada's naval capability – a move that would secure jobs in a region where the Tories hope to win seats in October.
The beneficiary of what critics decried as vote-buying is Davie Shipyard, based in Conservative Public Safety Minister Steven Blaney's riding.
The Harper Conservatives announced on Tuesday they are starting exclusive negotiations with Davie Shipyard to provide a commercial vessel to serve as the Royal Canadian Navy's supply ship until 2021, when the first of two new ones being built for the military are ready.
It is a stop-gap measure to secure a sorely needed supply vessel – what amounts to a floating warehouse – after bungled procurement plans delayed new ones by nearly 10 years, and the last operating vessel of this kind was rendered inoperable in a 2014 fire. Supply vessels deliver fuel, ammunition, spare parts, food and water to navy ships at sea.
Davie, which was passed over for big-ticket federal government shipbuilding contracts in 2011 because it was financially ailing, has lobbied hard for the interim naval supply vessel work. The Lévis, Que., yard laid off 200 workers in May, prompting Quebec Economy Minister Jacques Daoust to declare that his province was tired of "begging" Ottawa for shipbuilding work.
Defence Minister Jason Kenney rejected the notion that the Tories are electioneering with this announcement on the eve of Quebec's Fête nationale, a provincewide holiday.
"We are not trying to make political capital off of this," the minister said.
Canada's military procurement system is notoriously slow, and Mr. Kenney defended the decision to skip a competition, saying the Forces need an interim ship urgently and other big manufacturers have their hands full right now.
"A number of companies did express interest, but it was the view of the cabinet that this is a gap in our navy's capability right now. We have to move along quickly, and quite frankly, I'll share the frustration that's been expressed by some here. We … want to move forward with this as quickly as we can and not get bogged down in the kind of competitive process which sometimes has taken years," Mr. Kenney said.
The Defence Minister said he hopes Ottawa and Davie can make progress on a deal soon. "I would hope we could get to the basis of a letter of intent this summer."
The federal government has known for nine months – when the military announced the old supply ships would never go to sea again – that it needed an interim solution for resupplying Canadian warships at sea.
A senior government source said Davie had promised it could retrofit a commercial tanker within 16 months and lease it at a cost of no more than $35-million to $65-million a year.
NDP defence critic Jack Harris said the federal government has blundered by saying it will negotiate with only one company.
"You've given away your bargaining power to the shipyard you're negotiating with," Mr. Harris said. "They've a created a political environment in which they have to make some sort of deal between now and the election or prove themselves to be failures."
Mr. Kenney dismissed the idea that Ottawa is stuck with Davie. "We're not going to sit down and write a blank cheque."
Ottawa may need to rely on Davie longer than expected. Vancouver Shipyards is building the two Queenston class naval supply ships for the military.
A May 14, 2015, Department of National Defence document obtained by The Globe and Mail warns of a "very high" risk of more delays and a "high" risk that project costs could mount and make the new vessels unaffordable.
With a report from Canadian Press
Steven Chase