Shipbuilding Strategy Supports Jobs in Sault Ste. Marie

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The Honourable Diane Finley, Minister of Public Works and Government Services, along with the Honourable Peter MacKay, Regional Minister for Nova Scotia, today announced the awarding of the build contract with Irving Shipbuilding Inc. for the construction of six Arctic Offshore Patrol Ships (AOPS).

This contract, valued at $2.3 billion, marks the start of the construction phase under the National Shipbuilding Procurement Strategy (NSPS).

Bryan Hayes, Member of Parliament for Sault Ste. Marie, was in Sault Ste. Marie highlighting that this shipbuilding contract will support jobs in his community. Irving Shipbuilding recently finalized a contract with Russel Metals for 1,500 tonnes of steel plate, to be used in the construction of the first ship. The steel plate will be produced at the Essar Steel Algoma plate mill in Sault Ste. Marie, Ontario.

“Our Government’s National Shipbuilding Procurement Strategy is creating and supporting jobs throughout Canada and right here in our community. I am proud to be part of the government that made the historic decision to build ships right here in Canada.” said Bryan Hayes Member of Parliament for Sault Saint Marie

The AOPS build contract will sustain approximately 1,000 jobs at Irving Shipbuilding as well as many jobs at suppliers across Canada. To date, 197 companies in Canada have already benefited from NSPS work.

Construction of an initial block is scheduled for the summer, while full production will commence in September 2015. Delivery of the first HMCS Harry DeWolf class ship is expected in 2018.

“This is a proud opportunity for our employees to participate in this historic national program and demonstrate our capability to manufacture advanced grades of ship quality plate. By using Canadian steel in Canadian ships this contract ensures Canadians reap the economic benefits from this investment.” said Kalyan Ghosh,Essar Steel Algoma Chief Executive Officer

Quick Facts

· Industry analysts have estimated that government shipbuilding projects would create, both directly and indirectly, 15,000 jobs and generate $2 billion annually through the NSPS.
· Irving Shipbuilding has issued contracts totaling $310 million to companies in Canada.
· The $3.5 billion budget for the AOPS includes acquisition costs (for vessel design and build), project office operations, a provision for infrastructure costs (e.g. for jetties), as well as initial spares and support.
· The build contract, valued at $2.3 billion, is a cost reimbursable incentive fee-based contract that provides incentives for Irving Shipbuilding to deliver six ships to the Royal Canadian Navy within a pre‑determined and not-to-exceed ceiling price.