Davie Shipyard joins Irving, Seaspan in national shipbuilding program

Five years ago, federal officials downplayed the notion of adding a third shipyard to Ottawa's marquee shipbuilding strategy. Instead, they called the idea a "policy refresh."

Prime Minister Justin Trudeau still presented it Tuesday as a major step forward in the country's industrial policy — one of particular economic and political significance to Quebec.

The Davie Shipyard in Lévis, Que., now joins Irving Shipbuilding of Halifax and Seaspan Shipyards of Vancouver in the shipbuilding program.

It's the culmination of a political and corporate battle that's lasted nearly a dozen years — ever since Davie, the country's largest shipyard, was left out of the federal strategy of designating go-to shipyards for the construction of government vessels.

"We are going to be building ships here for a long time, right here in Quebec," Trudeau said to a hall full of shipyard workers in Lévis on Tuesday.

Conceived under the Conservatives but embraced by the Liberals, the national shipbuilding strategy has been plagued by delays and ballooning cost estimates in the construction of both warships and civilian vessels.

The agreement announced Tuesday to include Chantier-Davie in the strategy means Ottawa can finally open negotiations to build six icebreakers and one polar icebreaker. Those vessels were promised by the Liberal government almost two years ago.

Trudeau took a shot at the Conservatives, saying that the government of former prime minister Stephen Harper "chose to exclude Chantier-Davie" from the strategy. He said that his Liberal government has been working since its election in 2015 to bring Davie into the fold.

"The Conservatives were not interested in doing this," Trudeau said in French.

In fact, the Davie yard was considered in the initial round of bidding for the strategy in 2010-11. Davie lobbied hard to be included but, at the time, it was still emerging from bankruptcy protection.

A year after the strategy was launched, the Quebec company, with its finances in order, was bought by new owners who peppered federal officials over the years with unsolicited proposals to build and repair ships. Many of those pitches were rejected, including a handful put forward under the Liberal government. 

It wasn't until 2018 — when the two other shipyards were signalling they were unable to meet deadlines under the strategy — that the Liberal government began looking seriously at adding a third shipyard to the program, according to federal Department of Finance memos obtained by CBC News under access to information legislation.

It was referred to opaquely as a "policy refresh" in a heavily redacted memo dated Jan. 23, 2018.

The Davie shipyard was also once at the centre of the now-dropped criminal case against former vice-admiral Mark Norman, who was accused early in the Liberal mandate of leaking cabinet secrets related to the refit of a civilian supply ship for use by the navy.

The Liberal government announced in August 2019 that it would add another shipyard to the program and said it planned to have its due diligence and inspection completed by the end of 2020. That deadline was extended several times.

Meanwhile, the Canadian Coast Guard has struggled to keep its decades-old fleet of icebreakers operational.

One of the first reports presented to Trudeau's new government — in early 2016 — was a dire assessment of the state of the coast guard. The statutory Transport Canada assessment, tabled in the House of Commons, said the fleet was understaffed and desperately in need of new ships.

"Under the national shipbuilding and procurement strategy, which requires the Canadian Coast Guard to purchase ships from Canadian shipyards, it can only replace one ship a year, at most," said the report. "At that rate, the median age of the fleet will not decrease. Other strategies, such as outsourcing or leasing, are not part of the strategy and thus cannot be deployed to meet short-term requirements."

Almost seven years later, the prime minister used many of those same arguments to praise the decision to bring Davie into the program.

He did not, however, provide an estimate of when construction of the new icebreakers will proceed.

The federal government has spent hundreds of millions of dollars to refit and extend the life of coast guard cutters, whose average age is now over 40 years.