$175M Invested to Date in Preparation to Build Canada’s New Combatant Fleet

Halifax, NS:  Today Irving Shipbuilding announced $28.2M in additional contract awards to Canadian-based suppliers as part of the Halifax Shipyard Modernization Program, a 2-year engineering and construction investment to prepare the company’s facilities to build Canada's future combatant ships.

“To date a total value of $175M in contracts have been awarded as part of our overall investment of approximately $300M in the Halifax Shipyard Modernization Program” said Kevin McCoy, President, Irving Shipbuilding.  “The work underway at our yard is focused on getting us ready to undertake production of the AOPS vessels scheduled to start in 2015, as well as the larger combatant ships scheduled to begin production in 2020. With so many significant changes underway, it is a constant reminder that 2015 is not far away and we’ll be building Navy ships at Halifax Shipyard very soon. ”

The selection of suppliers for the Modernization Program is the result of a rigorous procurement process where quality, reliability, experience and cost is assessed in order to select the company that will help Irving Shipbuilding deliver best value to Canada.  Of the contracts let to date, 82% of the total contract value has been awarded to Canadian companies, while 52% of total contract value has been awarded to companies owned or operating in Nova Scotia.

Omega Formwork Inc., with 35 employees and located in Mount Uniacke, Nova Scotia, was awarded a contract to work on the concrete foundations and floor slabs for the new production facility at Halifax Shipyard. “This project has allowed us to retain several of our most highly-qualified and valued trades people through the winter season. We have 8 employees on the project site and another 4 - 5 support staff performing off-site fabrication, shipping and administrative functions directly related to the work at Halifax Shipyard,” said Miguel Salgueiro, Owner of Omega Formwork.  “As work progresses, we expect those numbers will likely double and, on occasion, exceed 30 as we bring in specialized sub-trades to perform various tasks associated with our scope of work. We are thankful for having been given the opportunity to be involved one of the largest federal government procurement projects in the history of our country.”

Other Nova Scotia owned or operating companies in this most recent round of contract awards include Harris Rebar, Dartmouth, and Dexter Construction, Pipe & Piling, Black & MacDonald, and Eastern Fence, all of Halifax.

Bermingham Foundation Solutions, based in Hamilton, Ontario and a subcontractor under Gulf Operators, was awarded a contract to provide Canadian-built custom engineered marine dockwall construction equipment.  “Our manufacturing division employs 80 people and we added 6 short-terms jobs for the contract with Halifax Shipyard,” said Peter Smith, President, Bermingham.  “More importantly, we were able to capitalize on the experience and offer a similar solution to other clients, enabling us to add 4 additional permanent positions, and we’re now offering this solution for export.”

Other Canadian companies in this most recent round of contract awards include Skyline Steel, St. Bruno, QC; as well as Gulf Operators’ subcontractor Con-Tech Systems Ltd., headquartered near Vancouver, BC.

The demolition of the yard’s joiner shop, burning shop and entire backend of the 100-year-old Module shop, the yard’s primary production facility, has been completed.  The cleared areas will continue to be prepared for construction. The remaining demolition of the production facilities is scheduled for early in 2014 once the inside work on the Mid-Shore Patrol Vessels for the Coast Guard is completed.  Seven cribs for the land level facility in the North end of the yard have been installed in the harbor and infilling has commenced. Demolition and replacement of the barrier wall and fence along Barrington Street and the repair of the lower wall continues and is expected to be complete by year-end.  And perhaps the most visible structure at the shipyard to date is the parking garage being erected in the South end of the yard. Construction on the parking garage continues on schedule, which is on track to be complete early in first quarter of 2014.

Upon completion, the modernization project will result in one of the most modern shipyards in North America. 

“The economic impacts, such as the jobs in shipbuilding, engineering, planning and supply chain, will scale up with the preparation and start of production on AOPS in 2015 while the indirect jobs within our supply chain and our suppliers’ supply chains will follow,” noted Kevin McCoy.  “However, the employment that comes with the transformation and construction of North America’s most modern shipyard – that has started now.  In fact, we project we’ll peak at approximately 500 construction jobs on Halifax Shipyard’s site in 2014.”

The contracts associated with the Halifax Shipyard Modernization Program awarded to date have created more than 1,600 full-time equivalent (FTE) positions directly within our selected suppliers and indirectly within those suppliers’ subcontractors and $100M in annual employment income over the two-year program period across Canada.  Looking locally, the contracts let to date have generated 870 full-time equivalent (FTE) positions directly within our selected Nova Scotia suppliers and indirectly within those suppliers’ subcontractors, as well as $40M worth of employment income within the province over the two year period (See Note).

The total $300 million Yard Modernization investment is expected to boost Canadian gross domestic product (GDP) by $235M, create more than 2,800 full-time equivalent (FTE) positions across Canada (direct with our suppliers and indirect with their subcontractors) and generate $170M worth of employment income in the country over the two-year period. It will also lead to more than $127M worth of consumer spending.  In addition, the economic activity is expected to provide approximately $58M worth of taxes for federal, provincial and local governments over the two year period.

“Throughout the NSPS contracts, as well as the preparations leading up to them, we are committed to maximizing opportunities and benefits for Canadians and Nova Scotians through subcontracting, employment and the generation of investment and benefits within the broader marine industry,” added Kevin McCoy.

Note - From the economic impact assessment prepared by Jupia Consultants Inc. using the following methodology: Direct and indirect full-time equivalent employment, employment income, gross domestic product (GDP) and other indirect taxes are derived using Statistics Canada I/O tables for Nova Scotia and for the national economy. Consumer spending and taxes generated estimates are derived using Statistics Canada's Survey of Household Spending for 2011

(CANSIM Table 203-002) and other sources.

About Irving Shipbuilding
Irving Shipbuilding is part of the J.D. Irving, Limited Group of companies and is in the business of building quality ships and repairing vessels. The company’s primary site is Halifax Shipyard, with three other locations in the Maritime Provinces. Irving Shipbuilding was selected in 2011 as Canada’s Combatant Shipbuilder under the merit-based National Shipbuilding Procurement Strategy and is in the early stages of a 30 year military shipbuilding program. It is currently working on a number of significant projects for the Department of National Defence and the Canadian Coast Guard.

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Contact:
Deborah Page
Irving Shipbuilding
Office (902) 484-4552
Cell (902) 499-7975
page.deborah@irvingshipbuilding.com
Mary Keith
J.D. Irving Limited
Office (506) 632-5122
Cell (506) 650-8209
keith.mary@jdirving.com