Canadian shipbuilding deal reached

Canada's shipbuilders have agreed to a radical change in the way contracts will be doled out by the federal government.

The government plans to spend $40 billion over the next 30 years to build as many as 50 large ships, in addition to 70 ships under 1,000 tonnes that have been earmarked for revamps.

"There is going to be enough work with 50 ships on order for every shipyard in the country to be going full steam, and that's good news in terms of the economy," said Defence Minister Peter MacKay.

The government wanted to avoid a repeat of situations last year, when the construction of three navy supply ships and some coastal patrol boats was shelved because of problems with meeting the specifications at the government's budget.

So it brought together the industry's players for two days of private meetings on Monday and Tuesday in Gatineau, Que., to work out an agreement with constructors on a new process that theoretically will allow the government to pick and choose in a more direct way which Canadian shipyards will build which ships. The agreement is meant to end the often intense bickering that has killed some government contracts.

"Everybody's buying in," said Peter Cairns, president of the Shipbuilding Association of Canada.

"Some [firms] have a few small reservation. But, in general, this whole group is buying into a long-term strategy, because that's really what's needed for us," Cairns said.

Make process transparent

The agreement itself still requires scores of questions to be answered and many details to be ironed out.

Alan Williams, former head of procurement for the Defence Department, called the deal historic.

"I think the notion for revisiting the government's shipbuilding policy makes good sense," he said.

However, he added that if the program is not managed properly it could become a disaster. He said the government needs to make the process transparent to ensure that tax dollars are spent wisely.