July 25, 2011 / 4:28 PM / 6 years ago

Canadian provinces back bids for big shipyard deal

3 Min Read

TORONTO (Reuters) - British Columbia will provide financial support for a bid by Seaspan Marine Corp's Vancouver Shipyards Co Ltd for a lucrative contract under a C$35 billion ($37 billion) Canadian government shipbuilding program.

British Columbia Minister of Jobs, Tourism and Innovation Pat Bell announced the province's involvement on Monday morning in Vancouver.

Providing the Vancouver shipyard wins a contract, proposed tax credits would give Seaspan C$35 million in benefits over 30 years. The province would also invest C$5 million in productivity in the marine sector.

"We are investing in our human capital by supporting the creation of marine industry jobs for years to come," Bell said in a release.

All told, three bidders are seeking part of the C$35 billion federal program, known as the National Shipbuilding Procurement Strategy. Each is backed by their respective provincial governments.

The procurement program is meant to revive Canada's shipbuilding industry, while modernizing its Navy and Coast Guard fleets.

Contracts will go to two of the three bidders: Vancouver Shipyards, Irving Shipbuilding Inc's Halifax Shipyard in Nova Scotia, and Quebec's Davie Yards. Bids were due last week, and an announcement is expected this summer.

Davie's bid was salvaged with just hours to spare last Thursday when Quebec's Superior Court approved the purchase of its assets by Upper Lakes Group. Davie is bidding in a consortium with Canadian engineering company SNC-Lavalin and South Korea's Daewoo Shipbuilding and Marine Engineering.

Also last Thursday, Quebec's government confirmed that it is backing the Davie bid with a C$18.7 million loan, which follows C$27 million in financing it has already provided to prop up the bankrupt shipyard.

Nova Scotia Premier Darrell Dexter launched his province's support for Irving Shipbuilding's bid in late May. The "Ships Start Here" partnership has commissioned economic impact studies and funded a slick website and social media campaign.

A more significant investment could be on its way if Irving's bid is successful.

"We are prepared to make a significant commitment to Irving Shipbuilding in the areas of infrastructure and training," Toby Koffman, a spokesman for Nova Scotia's Department of Economic and Rural Development and Tourism, said in an interview.

Koffman said details of any further investment would not be announced until Irving wins a contract.

Editing by Peter Galloway

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