Talk about chutzpah. The federal government has not taken the first step toward awarding the $2.1-billion contract to build three new navy supply ships, other than authorize the expenditure. The feds have not even said whether the tubs will be built in Canada. Yet already, Davie Maritime of Quebec, the latest incarnation of the failed, bankrupt, oft-rescued and otherwise sorry shipyard, is declaring itself the winner.
"I am the only shipyard in Canada who can do this," says Richard Bertrand, Davie's president and 17-year employee.
The sad truth is that Mr. Bertrand exaggerates only somewhat. Canada was once a great shipbuilding country. By the end of the Second World War, its navy was the world's third largest, after America's and Britain's. Since then, the industry has pretty much vanished. While the Shipbuilding Association of Canada website lists seven big members, probably half of them are dying or dead.
The largest maritime yard, Saint John Shipbuilding, owned by New Brunswick's Irving family, closed last year (with the assistance of $55-million from the feds). Theoretically, it could be reactivated, but the effort might not be worthwhile for three vessels. In Ontario, Port Weller Drydocks is still notionally in the game. But it is jointly owned by Upper Lakes Shipping Group and Canada Steamship Lines, the latter the property of the sons of Prime Minister Paul Martin. Did someone say conflict of interest? Never mind; the yard is probably too small to handle the vessels the navy has in mind. Measured by displacement, they are to be about five times bigger than the navy's frigates, Canada's most modern fighting ships.
So who's left among the potential bidders? According to the lonely souls at the Shipbuilding Association, just two: Davie, near Quebec City, and Washington Marine Group of British Columbia, whose businesses include Vancouver Shipyards.
Mr. Bertrand doesn't think Washington Marine is up to the job. As far as he's concerned, Davie is the only natural candidate. He may be right. Davie has always been as much about politics as shipbuilding. There is no reason to believe politics won't bless Davie one more time.
For much of its history, Davie was owned by the Quebec government, where it was duly treated as a make-work project. If Davie's father was Quebec, its godfather was the federal government (Liberal at the time). In the early 1980s, Davie scored a coup that went down as a textbook case on how to waste taxpayers' money. Under pressure from Quebec and federal cabinet ministers disposed to Quebec, the government split the order for the new frigates between Saint John Shipbuilding and two Quebec yards, which were soon amalgamated under Davie.
Three of the dozen frigates were built in Quebec. Of course, duplicating production lines, tools, quality-control systems, training and translating the plans into French didn't come cheaply. As the costs for the Quebec trio rose, Saint John Shipbuilding, the general contractor, sued Davie for $1.7-billion, then the largest lawsuit in Canadian history. It said the cost overruns were jeopardizing the entire frigate program (Davie blamed 50,000 design changes over the course of the construction). The case was settled out of court in 1992, but only after the feds agreed to fund most of a $363-million bailout of the Quebec yards.
Four years later, as the frigate program was coming to an end, the Quebec government put Davie on the auction block while making increasingly desperate efforts to keep it alive. Among them was the (failed) plan to have the yard build an unnecessary replacement for the perfectly good Lucy Maude Montgomery, a Gulf of St. Lawrence passenger ferry. In 1996, Davie was sold to Dominion Bridge in a deal that saw Quebec eat about $40-million of the yard's debt.
The comedy of errors continued when Dominion went bankrupt. In 2000, Davie was purchased by a U.S. investment consortium. That didn't work either. For the past three years, it has been under the control of a trustee. Davie Maritime, Mr. Bertrand's employer, leases what's left of the shipyard from the trustee. It has had some work, including a frigate repair job and the refit of a semi-submersible drilling rig, owned by Brazil's Petrobras, that sank in 2001 after a fatal explosion.
There is no doubt the navy's supply ships will be built in Canada. That's government policy, unless existing yards are simply incapable of getting the work done. Unless Saint John Shipbuilding rises from the dead, Washington Marine and Davie are the only contenders.
Davie is so confident it will get the work it's already preening around as the winner. Don't bet against Mr. Bertrand. History has proven that Davie, thanks to Quebec and federal politics, won't die, can't die, laughs in the face of death. Canada's policy, it seems, is to have a made-in-Quebec navy at any cost.
Eric Reguly