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September 7, 2008

Canadian Government support for Irving tug newbuilds

Canadian Minister of Industry Jim Prentice last week went to Prince Edward Island to announced three federal contribution agreements for shipbuilding projects.

The Government of Canada is contributing more than $12 million in interest rate support via the Structured Financing Facility (SFF), for the construction of seven tugs. Three will be owned by Groupe Océan and four will be managed by Nordane Shipping.

The tugs will be built at Irving Shipbuilding Inc.'s East Isle Shipyards in Georgetown, P.E.I. The projects are expected to create 110 jobs in direct work and another 100 in subcontracts over the next three years.


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Overall, the projects are expected to create more than 600 person-years of work in Atlantic Canada.

These projects are part of a renewed SFF, in which the government is investing $50 million over the next three years.

As a result of these projects, the East Isle Shipyard will be able to retain its skilled workers and further develop shipyard capabilities through training of both its skilled and new workers. The shipyard is actively engaged with Holland College to provide training for welders, with a unique focus on the welding skills needed for shipbuilding.

"We appreciate the leadership the Government of Canada has shown in keeping jobs at home on the Island," said Jim Irving, President of J.D. Irving Limited. "East Isle Shipyard continues to build a strong reputation for world class tugs that are presently serving in the North Sea, the Panama Canal and the Dominican Republic, as well as in Canada. Construction of these new tugs will employ more than 100 people for almost three years, providing $4 million a year in payroll into the local economy. The project will also result in the purchase of over $3 million of local goods and services from approximately 30 Island businesses."

"The men and women of East Isle Shipyard have proven time and again their skill and commitment to deliver world-class tugs to customers around the globe," said Frank Sweeney, President of Local 1934 of the International Association of Machinist and Aerospace Workers. "Our members are reassured that the federal government believes in the importance of a competitive shipyard on Prince Edward Island. Today's announcement is good news for more than 100 workers who will build seven new tugs through until 2011."

The objective of the SFF is to help ensure that Canadian shipyards are capable of meeting federal marine procurement and maintenance requirements. Industry Canada says that promoting Canada's shipbuilding industry will support Canada's Coast Guard and naval fleet renewal plans--with ships that will be built in Canada by Canadian shipyards.


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