Quebec Davie Shipyard Added to National Strategy Shipbuilding Strategy

An overall view of the Davie shipyard is shown in Levis, Que., on Dec. 14, 2018. Jacques Boissinot/The Canadian Press

Quebec’s Davie shipyard is being added to the federal government’s strategy for shipbuilding, Prime Minister Justin Trudeau says.

This means negotiations can start between Ottawa and Davie for the construction of seven new icebreakers for the Canadian Coast Guard.

The announcement was made on April 4 at the shipyard in Lévis, on the south shore of Quebec City, with a number of other top officials from different government levels and the company directors.

Quebec Premier François Legault said the deal being negotiated by Ottawa is valued at $8.5 billion.

Davie now joins Irving Shipbuilding in Nova Scotia and Seaspan Shipyards in British Columbia as part of the national strategy that was announced by the Harper government in 2010.

The deal comes after years of lobbying, negotiations, and uncertainty for the company.

As part of the agreement, the Quebec government and Davie have committed to invest $840 million to modernize the facilities.

Quebec’s portion is $519 million, with a $194 million equity investment in Davie and the remaining $325 million provided as a forgivable loan if certain conditions are meant.

Quebec says over 1,800 jobs will be created, with additional windfall for Davie’s 1,100 suppliers in the province.

The federal government had announced in 2019 its intention to add a third supplier to its National Shipbuilding Strategy, and a competitive process ensued.

Trudeau criticized the Harper government for not choosing Davie for the strategy in 2010, but the company was at the time in troubled waters and attempting a reorganization.

It had been placed under the Companies’ Creditors Arrangement Act in March and temporarily laid off 1,500 of 1,600 employees, reported Le Devoir at the time.

Davie was acquired by British company Inocea in 2012 and has turned a corner, receiving over $2.2 billion in contracts since 2014 for work for different federal departments.

“We took over a sleeping giant,” Inocea CEO Alex Vicefield said during the announcement.

Trudeau brushed aside concerns about the ability to strike a deal with Davie for the construction of the icebreakers.

“We wouldn’t be here today making this announcement if we weren’t incredibly optimistic,” he told reporters after the ceremony.

Legault echoed Trudeau and said they’ve accepted to invest half a billion dollars because Quebec believes the contracts will be signed.

“They work with the money of the taxpayers, so it’s normal that they negotiate prices with the Davie,” he said.

The Canadian Press contributed to this report.