How hard can it be to build a ferry?
That's a question the Quebec government must surely be asking itself as it waits patiently for the Chantier Davie Canada Inc. shipyard to deliver two car ferries that were supposed to be finished two years ago.
Not only is the work not done, but the ships are seriously over budget. Davie, based in Lévis, Que., says the ships will cost nearly twice as much as projected – roughly $113-million per ship, instead of the original price tag of $62.5-million.
It's not clear who will be left with the extra tab, but if history is any guide, taxpayers will be on the hook.
One ferry is 85-per-cent finished. The other is half-done. The hope now is that they'll be ready for service next year.
This week, the Quebec government asked the province's financial watchdog to investigate the troubled ferry contract.
Let's be charitable: This move is long overdue.
The Davie shipyard is a boondoggle, and it has been since at least the 1980s, when Ottawa steered work its way on a fleet of frigates in a bid to appease Quebec, which owned the shipyard at the time. And in the decades since, the federal and provincial governments have sunk hundreds of millions of dollars into Davie, whose vessels are chronically late and often over budget – just as the original frigates were.
The current beneficiary of all this largesse isn't even Canadian. The shipyard and its various affiliates are owned by a complex web of companies, with corporate registrations scattered from Britain to the tax havens of Monaco and the British Virgin Islands. The current owners acquired the company out of bankruptcy in 2011 – not the first time the shipyard has been in financial trouble.
Davie has been in and out of bankruptcy protection for much of the past three decades.
It's been kept afloat with government loans, subsidies and shipbuilding contracts, which Ottawa and the provincial government invariably regret.
These governments keep giving, and they are chronically disappointed.
Consider two other major projects Davie is working on. Before the 2015 election, Ottawa signed a $587-million contract to lease a navy supply ship from the shipyard, bypassing its own contracting rules that require an open competition. Davie is based in the riding of former Conservative cabinet minister Steven Blaney.
The lease deal was apparently good for Mr. Blaney, who kept his seat even as the Liberals swept to power. It's not clear how Canadian taxpayers benefit. The price on the lease is equal to or more than what Ottawa would have spent to buy a similar vessel, and the government won't even own the ship when the lease runs out. The rival Irving shipyard in Halifax insists it could have delivered the ship sooner, and for a lot less money.
The contract is also at the centre of a criminal investigation of Canadian Navy Vice-Admiral Kevin Norman, who the RCMP alleges leaked secrets to Davie in a bid to dissuade the new Liberal government from cancelling the lease.
Ottawa might justify the decision to stick with Davie on the grounds that it's sustaining Canadian jobs. There are roughly 1,400 Davie employees and subcontractors working at the shipyard, located across the Saint Lawrence River from Quebec City.
Unfortunately, Davie wound up shifting a large chunk of the more specialized work on the supply ship – dubbed Project Resolve – to a shipyard in Finland. As a result, tens of millions of dollars worth of work and hundreds of jobs went to Finns instead of Canadians.
Then, there is Davie's work for a Norwegian company on three offshore construction ships for the oil industry. Export Development Canada extended a $229-million loan to the shipyard for the sale, assuming the work would be done in Canada. Instead, Davie built just one of the ships in Canada, while the other two were made offshore.
Why, one wonders, do federal and provincial government keep pouring cash into the operation?
It's a boondoggle, and not a particularly good one. Ottawa and Quebec are spending scarce tax dollars to help a foreign company do work in other countries, and they're still patiently waiting for their overpriced ships.