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Dawn of new shipbuilding era brings hopes for end to boom and bust cycle

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HALIFAX - The last time Ottawa promised a new era in Canadian shipbuilding, it didn't end well for Douglas Noftell.

The 59-year-old was among the last group of workers who walked out of the Irving shipyard in Saint John, N.B., in 2003 after spending much of his working life at the once-bustling facility.

The closure of the yard, which at its peak employed more than 3,000 people who built high-tech frigates, left highly specialized workers struggling to find new work, Noftell said.

"A lot of guys got divorced and lost homes and houses," he said. "A lot of guys committed suicide."

The federal government says this time will be different as it launches a $35-billion program to build Canada's next fleet of combat and non-combat ships.

As winner of the $25-billion combat ship contract, the Irving shipyard in Halifax will be responsible for building 21 vessels. Seaspan Marine Corp. of Vancouver will construct seven vessels under its $8-billion agreement to build non-combat ships.

The national shipbuilding procurement program aims to end the boom and bust cycle of the industry and replace it with a steady flow of work to sustain highly skilled jobs over 20 to 30 years.

John Shaw, a vice-president at Seaspan, said he doesn't believe a collapse in work will occur for his company.

Shaw said there will be further opportunities to build yet-to-be-tendered coast guard ships beyond the non-combat contract.

"We feel we would be one of the two competitive shipyards in Canada," he said. "We would be in a competitive situation to look forward to those additional coast guard vessels."

He said Seaspan could also compete to bid on polar icebreakers required by other countries.

Officials with Irving did not return messages seeking comment.

Peter Cairns, president of the Shipbuilding Association of Canada, agrees with Shaw, saying he believes Ottawa has learned to space work out and concentrate it in a few yards.

The key to sustainability will be timing, he said.

During the 1980s and 1990s, the navy work was divided between several yards, including the one in Saint John and the Davie shipyard in Levis, Que.

When the navy work was completed by the mid-1990s, the federal Liberal government of the time wasn't ready to order another fleet of warships.

Efforts to sell the Irving-built frigates overseas failed, and the Saint John yard couldn't find enough commercial work to sustain itself.

Cairns says the difference now is that the Irving shipyard in Halifax has 30 years to build warships and coast guard vessels and by the time they're all complete, there could be a fresh round of government work.

"Theoretically we have a system that can perpetuate itself for quite some period of time," he said.

"This is probably one of the best things to come to shipbuilding in most of our lifetimes."

Seaspan is expected to complete its work in less than a decade, which should help position it to bid on other federal contracts in the decades to come, Cairns said.

He said previously, no single centre in Canada developed into an internationally competitive shipbuilding powerhouse.

Halifax is poised to fulfil that role this time. One projection from the Atlantic Provinces Economic Council estimates 11,500 jobs would be created in Nova Scotia, with 1,700 directly at the yard.

But in Levis, Que., Paul-Andre Brulotte of the Union of Shipyard Workers of Lauzon says while the shipbuilding policy may work in Halifax, it's not creating a national industry.

The Davie Shipyard has been left to bid on the $2 billion for small federal ships. Otherwise, it will rely on commercial and provincial contracts to survive.

The yard on the south shore of the St. Lawrence River was once the largest in the country, and it built a series of Tribal-class destroyers in the 1980s and 1990s.

Now, there are only 25 workers at the site, Brulotte said.

The owners of Davie, the Upper Lakes Group of Toronto, have won contracts for two provincial ferries and are in negotiation to complete some partially finished vessels in the shipyard. There are plans to hire back hundreds of workers for those jobs.

But Brulotte said beyond that, he's wondering what will happen.

"The future is worrying," he said.

He said Ottawa could have spread the work around more evenly and still have created pockets of shipbuilding expertise across the country.

"We could have had enough work (from Ottawa) for the next 15 or 18 years and three yards could have modernized and progressed to the point where they could do better in the commercial sector," he said.

John Dewar, vice-president for the Upper Lakes Group, echoed similar concerns.

"Those shipyards that won, they will have assured work," he said. "But it doesn't do anything to address boom and bust cycles for us."

He said the Canadian industry still faces heavily subsidized competitors in Europe and the Far East for construction of commercial vessels.

Cairns said the shipbuilding lobby is pushing Ottawa to renew financing assistance for Canadian ship owners to encourage the construction of vessels in Canada.

The industry also wants Ottawa to set up a long-term ship financing program in Canada similar to the Title XI loan guarantee program in the U.S., where the U.S. government backs loans for ships built in the U.S. for up to 25 years, he added.

Dewar said these measures would be helpful for shipyards scrambling for other work.

In Saint John, Noftell said even the shipyards that won the multibillion-dollar deals will face major challenges, including the need to make upgrades and overcome trained worker shortages.

"They're going to need experienced shipbuilders. There's not that many yet," he said.

"You can't just throw a lot of graduates out of school and expect to build a ship. People don't realize how much there is to it. There's a lot to it."

But he said he's hopeful this shipbuilding contract will work out better for people who devote their working lives to the military projects.

"They're not going to close the door in their face like they did here," he said.

"It's still a bitter pill for me to swallow."

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