News / Halifax

Shipyard aid a misuse of public money: Critics

HALIFAX - Nova Scotia announced a $304-million aid package Friday for Irving Shipbuilding to help the company kick-start construction of the navy's next fleet of warships, a decision that one national taxpayers group said was a misuse of public money.

The provincial government's assistance consists of a forgivable capital loan worth up to $260 million and a repayable loan of $44 million for human resources, technological and industrial development over 29 years.

Premier Darrell Dexter said the money will generate jobs and economic growth in a province trying to dig itself out of debt.

Dexter said the fund is a small fraction of the estimated $2.8 billion in tax revenue the contract is expected to generate over the first 19 years of its life.

"This is a tremendous opportunity that we helped realize," Dexter said.

"My colleagues and I want to see this province thrive, and we will do everything we can to see it happen."

Jim Irving, CEO of Irving Shipbuilding, said the province's investment played an important role in the company's bid to build 21 combat vessels.

"This allowed us to put the most competitive bid in," Irving said at the company's Halifax shipyard. "We were up against some big provinces who have historically funded dramatic amounts of shipbuilding infrastructure over the years."

But Kevin Lacey of the Canadian Taxpayers Federation questioned the government's decision to give more public funding to a company that has landed the lion's share of the largest military procurement in Canada's history.

"Taxpayers are already paying this company $25 billion for these boats," Lacey said in an interview.

"They don't need another $300 million from Nova Scotia taxpayers."

Lacey also took issue with the government's characterization of the announcement as a loan.

"The company at the end of the day does not have to pay this back, so it's just public relations to call it a loan," Lacey said of the $260 million forgivable loan.

Irving said the money would go towards the construction of an additional pier and the expanding of an existing module shop, among other infrastructure improvements planned for the shipyard.

The company estimates the first phase of construction will begin within the next three to four years, with another phase to be completed within the next eight to 10 years.

Under the federal shipbuilding contract, the Halifax shipyard will build 21 combat vessels. The deal is expected to maintain a steady flow of work over the next 20 to 30 years.

The provincial government says the project will create an additional 11,500 jobs and increase Nova Scotia's GDP by almost $900 million during peak production years.

Ottawa's goal in rolling out the national shipbuilding procurement program is to end the boom and bust cycle that has hampered shipbuilding in Canada in the past. The industry has struggled since the last major warship project ended in the 1990s.

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