N.S. makes loan available to upgrade Shelburne ship repair business

The Canadian Press ~ The News
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SHELBURNE, N.S. - Nova Scotia is providing an $8.8-million loan to revive an Irving-owned ship repair business, citing a need to boost employment in a rural riding hit hard by the economic downturn.
Fisheries Minister Sterling Belliveau, NDP member of the legislature for Shelburne, predicted Tuesday the upgrades to the 50-year-old Shelburne Ship Repair yard will create "well-paid jobs" for about 70 people.
While the Opposition Liberals accused Belliveau of providing political rewards to his constituency, the cabinet minister defended the subsidy to the family-owned giant as a wise investment.
"We'll be out there competing for jobs and securing jobs and having these jobs in rural Nova Scotia," he said in a telephone interview.
A spokeswoman for the Economic Development Department said 74 per cent of the loan - just over $7 million - will be forgiven if the Irvings hire enough workers at the idled yard to generate an equivalent amount in provincial income taxes.
The loan also requires the shipyard to rebuild its marine railway, allowing it to haul larger vessels onto a dry dock. In addition, an upgrade to an aging wharf is required.
The work is expected to take a year.
Gary Nickerson, president of the Canadian Auto Workers local, said the subsidy helps stem the migration of skilled tradespeople from the small town to Western Canada.
He said pipefitters, welders, carpenters and other skilled tradespeople will be employed repairing ships up to 4,500 tonnes, including small navy and coast guard vessels. Their wages will average over $19 an hour.
"It was just a little late Christmas to all of us, not only to the shipyard workers but to the community of Shelburne," said Nickerson.
However, the Liberals said the decision is a matter of political favouritism.
Leo Glavine, the party's finance critic, noted the NDP are providing funds to the shipyard at a time when it has refused to continue a subsidy to the ferry in neighbouring Yarmouth, a riding held by a former Conservative cabinet minister.
The loan was directly approved by cabinet through the Industrial Expansion Fund.
"It's business as usual," said Glavine. "The NDP is essentially using the Industrial Expansion Fund as a political slush fund - not much different than the way the Tories used it."
Glavine said the announcement was timed to soften the blow of the NDP's decision not to continue a subsidy to the high-speed Cat ferry between Bar Harbour, Maine and Yarmouth.
Belliveau responded that politics wasn't a factor in the assistance to Irving.
"Each decision is scrutinized and our government does a thorough analysis of the project, and I can tell you we've done our homework on this project," he said.
"The ferry service wasn't on a sustainable path. ... We'll make the appropriate decision at the right time."
Steve Durrell, president of Irving Shipbuilding, said the company expects to begin immediately on the upgrade and is aiming to have its first contracts by the fall.
He said the firm hasn't booked any orders yet, but he's confident the upgraded yard can win contracts for larger vessels.
"There's a significant amount of coast guard work that comes up annually, as well as refits by the coast guard. There's naval repair work that's slated to be done, as well as the offshore oil industry," he said.
"This upgrade opens up markets we couldn't compete in before because we couldn't haul the ships out of the water."

Organizations: NDP, Economic Development Department, Industrial Expansion Fund Canadian Auto Workers Irving Shipbuilding

Geographic location: Shelburne, Nova Scotia, Irving Yarmouth Western Canada Bar Harbour Maine

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