Government of British Columbia

Government of British Columbia

July 25, 2011 13:30 ET

Government of British Columbia: Seaspan Shipbuilding Bid Gets Boost to Land Jobs in BC

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 25, 2011) -

NEWS RELEASE
For Immediate Release
2011JTI0097-000924
July 25, 2011

Ministry of Jobs, Tourism and Innovation

Seaspan Shipbuilding Bid Gets Boost to Land Jobs in BC

A $40-million package from the Province will support Seaspan's bid for a portion of the federal government's multi-billion dollar National Shipbuilding Procurement Strategy (NSPS), and support marine industry jobs in BC, announced Pat Bell, Minister of Jobs, Tourism and Innovation.

"As promised, our government is helping Seaspan submit the strongest possible bid and this investment focuses on job-creation," said Bell. "We are investing in our human capital by supporting the creation of marine industry jobs for years to come."

If Seaspan's bid is successful, the Province proposes to offer enhanced training or other labour tax credits for eligible marine industry employers in B.C. The proposed tax support would provide up to an estimated $35 million in benefits to Seaspan over the 30-year life of the shipbuilding program.

As well, the Province will invest $5 million to support the productivity and long-term viability of the broader marine sector should Seaspan win a federal contract. As part of selecting a winning bid, the federal government will evaluate these added investments in the British Columbia marine sector. This investment is in addition to, and separate from, the money Seaspan plans to invest as part of their bid response. The federal government is expected to make its decisions this fall.

"Seaspan is both pleased and thankful of the level of support it's received," said Jonathan Whitworth, Seaspan CEO. "We're in it to win it and we're certainly not alone. This type of support for the future of the B.C. shipbuilding industry will only add to an already stellar bid. I am confident we've submitted a winning bid, and we couldn't have done it without the backing of our provincial and municipal governments, as well as the multitude of organizations, such as BC Ferries, who have provided encouragement and assistance throughout the process."

Over recent months Seaspan has been working closely with interested parties including BC Ferries, the Township of Esquimalt and the District of North Vancouver to ensure that the many partners that can benefit from jobs and investment related to the bid are engaged to maximize Seaspan's chance of winning based on selection criteria set by the federal government.

BC Ferries is pledging $20 million toward building the capacity of B.C.'s ship repair and maintenance industry, adding to Seaspan and the Province's support.

"Nothing will help B.C.'s marine sector better than by securing a long-term federal shipbuilding contract," said David Hahn, president and CEO of BC Ferries. "A strong shipbuilding and repair sector in B.C. is important for us to receive competitive pricing as we maintain and upgrade our fleet in the future."

Support from the Province and BC Ferries has been noted in Seaspan's bid now submitted to the federal government and is dependent on Seaspan successfully being awarded a NSPS work package. Should the bid be successful, the Province intends to finalize the details of the tax support and proceed with seeking approval of the Legislature.

Meyers Norris Penny LLP, a consulting firm commissioned by Seaspan, has estimated that a winning bid could create thousands of jobs and add billions of dollars to the Province's economy.

Seaspan's NSPS bid has wide-ranging support from across British Columbia including: the provincial government; the B.C. legislature; BC Ferries; local municipalities; all shipyard labour unions; the Squamish and Tsleil-Waututh First Nations bands; and a multitude of universities, colleges and training centres.

A backgrounder follows.

Connect with the Province of B.C. at: www.gov.bc.ca/connect

B A C K G R O U N D E R

Province works with partners to bolster Seaspan bid

Seaspan Marine Corporation is bidding to win one of two work packages offered in the $35-billion National Shipbuilding Procurement Strategy (NSPS) intended to establish a long-term strategic relationship between the federal government and two Canadian shipyards to construct repair, refit and maintain large combat and non-combat vessels over the next 30 years.

The NSPS evaluation criteria requests proponents to demonstrate support from partners, and in particular that the investments made by proponents and their partners will grow the broader shipbuilding and marine sector in Canada.

As part of that support, the Province expects to offer enhanced training or other labour tax credits to eligible marine industry employers in B.C. Benefits to Seaspan could be up to $35 million over the life of the 30-year combat shipbuilding program. The Province also plans to invest an additional $5 million specifically towards efforts to develop the long-term viability of the marine sector. If Seaspan wins the non-combat package, which is of shorter duration, the Province's tax credit support will be prorated accordingly. This investment is in addition to, and separate from, the money Seaspan plans to invest as part of their bid response.

The Province's $5-million contribution to the long-term health of the broader marine sector will be tied to performance targets and measures and may include investments in skills and human resources, increased commercial work and supply chain development. These are areas of interest to the federal government and will be recognized in evaluating each bid.

As an example, in June the Province announced a $550,000 initiative to help develop a comprehensive training strategy for the shipbuilding and repair industry, which will be part of a proposed industry-led marine training centre, expected to be located in Esquimalt.

BC Ferries' $20-million contribution is expected to be used to build human capital, technology and innovation in the marine sector – all elements designed to further support the federal government's evaluation of Seaspan's bid. This investment is in addition to, and separate from, the money Seaspan plans to invest as part of their bid response.

Support from the Province and BC Ferries has been noted in Seaspan's bid now submitted to the federal government and is dependent on Seaspan successfully being awarded an NSPS work package. Should the bid be successful, the Province intends to finalize details of the tax support and proceed with seeking approval of the legislature.

A report commissioned by Seaspan forecasts that the successful award of an NSPS contract will create thousands of new jobs and adds billions of dollars to the provincial economy.

NSPS bids had to be submitted by July 21. A decision on the two successful proponents is expected to be announced in the fall.

Other industries that are currently eligible to receive labour-based tax credits include film and television production and interactive digital media developers (i.e., video games).

Connect with the Province of B.C. at: www.gov.bc.ca/connect

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