(Ship)breaking News

Marine Recycling Corporation of Port Colborne, Ontario has landed a third federal government contract to dispose of a ship — this time the HMCS Athabaskan.

The Iroquois-class destroyer will join the HMCS Preserver (a naval auxiliary oiler replenishment vessel), the CFAV Quest (a former research vessel) and the MV Princess of Acadia (the former Digby ferry) at the dock the firm is subletting from McKeil Marine in Sydport. The contract for the first two vessels was worth $12.6 million, that for the Princess of Acadia $2.7 million, and the Athabaskan contract is worth $5.7 million. In announcing the latest contract, Public Services and Procurement Canada stated, rather grandly:

The Government of Canada is committed to rebuilding our marine industry, supporting Canadian technological innovation, and bringing jobs, learning opportunities and prosperity to communities across Canada through the National Shipbuilding Strategy (NSS).

HMCS Athabaskan (Photo courtesy the Royal Canadian Navy http://www.navy-marine.forces.gc.ca/en/news-operations/news-view.page?doc=hmcs-athabaskan-takes-final-salute-after-44-years-of-dedicated-service/izkjrve5)

HMCS Athabaskan. (Photo via Royal Canadian Navy)

A 25 January 2018 story in the Cape Breton Post had nothing to say about the “learning opportunities and prosperity” the contract will bring to our particular community, but it did make claims about the jobs:

There are currently 27 full-time employees working on the two vessels, and that number is expected to reach 35 to 40 employees as work begins on the Athabaskan sometime in April.

The job numbers are interesting given that, in announcing the first contract, Sydney-Victoria MP Mark Eyking claimed it would create 35 direct jobs and 35 spin-offs. The new contract, then, will either add five jobs to that total — or none. As for spin-offs, there was no mention of any.

In Eyking’s defense, pinning down the number of people Marine Recycling actually employs is not easy — Public Services and Procurement doesn’t even know exactly. In announcing the Athabascan contract on 18 January 2018, it put Marine Recycling’s “organization employee count” at “29 to 40.”

That’s the same number it quoted in June 2017, when the company won the Preserver/Quest contract.

Marine Recycling Corp. founder and director of business development Wayne Elliott told the Post the three contracts should be completed by the end of 2018, but that he expects “there will be enough work in dismantling and breaking ships for years to come.”

We’re looking at Sydport, we hope, as a permanent facility.


Tow, tow, tow your boat

Interestingly, Marine Recycling Corp has a rival in Nova Scotia: RJ MacIsaac Construction Limited (RJMI), the Antigonish-based firm that does its own shipbreaking in the Port Mersey Commercial Park in the Region of Queens Municipality.

RJMI (the company hired to deal with the MV Miner) landed a $39 million contract to dispose of the HMCS Protecteur and the HMCS Algonquin in 2015. The vessels were docked at Canadian Forces Base Esquimalt in British Columbia and had to be towed 7,600 nautical miles down the Pacific coast, through the Panama Canal, then up the east coast of North America to Port Mersey.

That raised the ire of a company whose name you may recognize — McKeil Marine Ltd — because the Algonquin and the Protecteur were towed from BC to the Panama Canal by an American company. McKeil actually took RJMI to court over the matter, arguing, as the Queens County Advance reported:

[T]hat the tow engaged in a law called the “coasting trade.” Under that law, a ship involved in a tow must be a Canadian based ship or must obtain a licence. A U.S. ship can only be used if there are no Canadian flagged ships which are “suitable and available,” according to a decision recently released by the Federal Court of Canada.

At the time, Transport Canada decided that the coasting trade did not apply to the tow of the two ships.

McKeil made its application to the court because it was mainly concerned about the implications the decision would have on its operations in the Great Lakes.

But the court wasn’t so sure:

The court ruled that McKeil provided no evidence demonstrating any direct disadvantage from the decision. It said McKeil would never have had the opportunity to do the tow even if Transport Canada had decided the coasting trade applied.

And while it ultimately ruled that McKeil had a right to challenge the decision, it also ruled the company was “too late in bringing its application forward.”

Interestingly, Wayne Elliott of Marine Recycling is on record as saying he wanted an east coast port for some shipbreaking contracts precisely because towing is the most dangerous part of the undertaking. (The MV Miner, you’ll recall, was under tow when it broke free and wracked up on the shores of Scaterie Island).

Towing the Algonquin and Protecteur 7,600 nautical miles doesn’t seem to have been the federal government’s first choice either, but no British Columbian companies bid on the contracts. Joe O’Rourke, general manager of Seaspan Victoria Shipyards, told the Times Colonist his firm was actually asked to bid on the job but declined:

“Scrapping is a very complex and at times dangerous business of cutting up and disposing of an old vessel,” he said, made more complex for Protecteur given it caught on fire and produced hazardous materials.

In fact, the Protecteur caught on fire four times during the demolition process, causing RJMI to donate “over 100 pails of AFFF class A fire fighting foam and 2-3 pallets of fire hose, nozzles and fittings” to local fire departments.


Spin-off or just spin?

RJMI won a third federal shipbreaking contract in October 2016, to dispose of the former HMCS Iroquois (which was based in Halifax). The contract was expected to last 18 months, which means it should run until April of this year. I contacted the Port Mersey Commercial Park to ask about the status of the job and was directed to contact RJMI directly, which I did, but as of press time I had not received a response.

Public Services and Procurement lists RJMI as employing “10 to 19” people. Christopher Clarke, then-mayor of the Region of Queens Municipality, told LighthouseNow in October 2016 that there were “52-55” people working on the site, although the company itself listed “33 full-time and four part-time staff” on the Port Mersey Commercial Park website. A second company, Jaspro Services Ltd., which LighthouseNow said had “helped with clean up efforts,” had five full-time and 10 part-time staff.

In November 2016, the new Region of Queens Municipality mayor, David Dagley, in an “interview” with a representative of Public Services and Procurement Canada, expressed himself delighted with the ship disposal work his town was getting. (Can i just say, by the way, how much I object to this? I don’t award contracts for decommissioning Canadian warships — okay, well there was that one time, but I think we can all agree it was not a success — and PSPC employees should not be doing interviews.) His description of the benefits of the shipbreaking industry is a little light on actual facts and figures:



I am not sure what the PSPC hopes to gain by such “interviews.” I guess it’s an attempt to convince those of us who don’t win shipbuilding contracts that shipbreaking contracts are almost as good, that we’re also part of the National Shipbuilding Strategy. But you don’t see photos like these announcing the latest shipbreaking contract:

The Honourable Judy M. Foote, Minister of Public Services and Procurement and the Honourable Harjit Sajjan, Minister of National Defence, today announced a $230 million contract with Seaspan’s Vancouver Shipyards Co. Ltd. that will help develop and finalize the design of the Navy’s Joint Support Ship (JSS). Construction is scheduled to begin in 2018.

The Honourable Judy M. Foote, Minister of Public Services and Procurement and the Honourable Harjit Sajjan, Minister of National Defense, today announced a $230 million contract with Seaspan’s Vancouver Shipyards Co. Ltd. that will help develop and finalize the design of the Navy’s Joint Support Ship (JSS). Construction is scheduled to begin in 2018.


(Justice Minister Jody Wilson-Raybould doesn’t even get billing in the caption, but she wanted to be in that photo. Imagine three federal cabinet ministers jostling to get into the photo announcing the winner of the contract to dispose of the MV Princess of Acadia.)

It’s true that shipbreaking done in Canada is done to higher environmental standards than shipbreaking in countries like Pakistan and Bangladesh, and dealing with our own decommissioned vessels seems like the right thing to do.

Moreover, some of the jobs at Marine Recycling’s Sydport location pay “decent for here” wages (that’s a technical term I learned from someone who has worked out West). This job posting for a hydraulic shear operator, for instance, pays $20 to $25 an hour. On the other hand, general laborers get $16 an hour, which my source says seems low, considering the nature of the work.

And those jobs depend on Marine Recycling continuing to win contracts for vessels it doesn’t want to tow to its Port Colborne facilities, which is why they “hope” to make Sydport a permanent base but aren’t making any promises.

I’m going to go out on a limb and say that, despite the upbeat Public Services and Procurement Canada press release, I don’t think shipbreaking is going to be a source of “prosperity” for our town.