Finnish company raises red flags over federal negotiations for Davie icebreakers

Davie Shipbuilding, Lévis, Quebec (Photo By Jamez42 – Own work, CC BY-SA 4.0)

OTTAWA — A Finnish company has raised red flags over the Trudeau government’s decision to launch negotiations with Quebec shipyard Davie for the lease of four icebreakers without conducting a competition.

Helsinki-based Arctia Ltd. says it had expected a formal bidding process after the federal government asked shipowners in late 2016 to provide information about the icebreakers that they have available for lease.

Prime Minister Justin Trudeau instead surprised many when he announced that the government would start talks Friday with Davie, which has proposed converting four icebreakers and leasing them to the Canadian Coast Guard.

The announcement followed growing concerns about the coast guard’s aging icebreaker fleet, and an intense lobbying campaign by the Quebec government on Davie’s behalf.

It also came despite an RCMP investigation that Vice-Admiral Mark Norman leaked cabinet secrets to Davie in November 2015 to keep the Liberals from cancelling another shipbuilding project.

Norman was suspended last year, but has not been charged with any crime. The allegations against him are contained in documents that have not been tested in court, and Norman’s lawyer has denied her client did anything wrong.

Arctia president Tero Vauraste said in an interview Friday that his company followed the federal government’s formal process and was taken aback after learning about the planned talks with Davie from media reports.

“We would like to speak up and remind that we are available and very much willing to provide the best available fleet at a reasonable price which would benefit Canadian taxpayers,” Vauraste said.

Public Works and Procurement Canada did not immediately respond to a request for comment Friday.

Quebec Premier Philippe Couillard has welcomed the federal government’s decision to enter into talks with Davie, which says a deal with Ottawa would let it hire back many of the 800 workers that were laid off last month after converting a civilian ship into an interim resupply vessel for the navy.

But Arctia isn’t alone in questioning the decision to forego a competition to address an anticipated shortage of Canadian Coast Guard icebreakers in the coming years.

Alan Williams, who previously oversaw military procurement at the Department of National Defence, suggested the government could face legal challenges from companies for entering into direct negotiations with Davie.

“I can’t help but wonder, what is the legal justification to bypass competition?” Williams said.

While Vauraste said it was too early to say whether a deal between the government and Davie would violate procurement laws and trigger a lawsuit, “of course, we are having a look into this and following it very closely.

“We also have to bear in mind that there is a recent free trade agreement between Canada and the EU, which basically assures there is access from the EU countries to public tenders in your country, and vice versa.

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The Canadian Coast Guard’s icebreakers are nearing the end of their original 40-year life cycle, with the average vessel already 35 years old.

Upgrades have been promised to keep the icebreakers in the water as long as possible, but only one is scheduled for replacement over the next decade through the federal shipbuilding plan.

Officials privately warned Fisheries Minister Dominic LeBlanc in 2016 that each passing day the ships stay in the water increases the risk of a breakdown, with 1,595 operational days lost in 2013-14.

Those concerns became a reality earlier this month when mechanical problems kept the service from helping a ferry trapped in the St. Lawrence River.