POLITICS
10/18/2011 05:56 EDT | Updated 12/18/2011 05:12 EST

Canadian Shipbuilding Contracts: Electoral Stakes High For Tories In Allocating $35 Billion For Naval Refit

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In the next few days, a decision Stephen Harper would prefer not to make will be announced.

At stake: $35 billion and as many as 10,000 jobs.

Canada's navy is in need of a refit, and two shipbuilding contracts worth $35 billion will be awarded to two of three Canadian shipyards that have tendered bids.

One of them, the most likely to win the largest of the contracts, is in Halifax. The other two are in Vancouver and Lévis, across the St. Lawrence River from Quebec City.

The potential political fallout from the decision could be catastrophic, explaining why the Conservatives have kept mum on the subject and are unlikely to have any of their big guns, including the Prime Minister, present when the announcement is made.

Politically, the safest choice may be Halifax. The Conservatives generally do well in Nova Scotia and the region is one of the lesser political battlegrounds in the country. But polls for Atlantic Canada, always volatile due to small sample sizes, show a three-way race between the Liberals, Tories and New Democrats.

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Two ridings in and around Halifax were relatively close in the 2011 federal election. Halifax West is a tight Liberal-Conservative race, with Liberal Geoff Regan victorious in 2011, while in South Shore-St. Margaret's the New Democrats placed a close second to Conservative Gerald Keddy.

But the choice of giving the lesser of the two main contracts to either Vancouver or Lévis will be much more difficult to make, and the repercussions could be great.

While British Columbia is one of the better provinces for the Conservatives, Vancouver is no Tory stronghold. The Liberals and New Democrats dominate the core of the city, and the province as a whole is an electoral battleground.

The latest provincial poll out of B.C. puts the New Democrats ahead of the governing (and Tory-esque) B.C. Liberals. The latest federal poll gives the Conservatives a healthy lead in B.C., but for most of the summer the New Democrats and Conservatives have been neck-and-neck in the province.

Though 2015 is a long way off, a contract of this magnitude is not quickly forgotten and British Columbia is likely to be an important province in the next federal election. It will be key to the NDP's hopes for forming the next government.

Then there is Lévis. On the one hand, the Conservatives have not given up on Quebec and want to make gains in the next federal election. On the other hand, "pandering" to Quebec has always been a delicate issue in the rest of Canada and a similar decision made by the Progressive Conservative government on a military contract in the 1980s played a large role in the formation of the Reform Party and the disastrous defeat of the PCs in 1993.

But the Conservatives need a boost in the province. The latest poll puts the Conservatives where they were on election night, when only five Conservative Quebec MPs were elected. In the Quebec City region itself, the Tories are trailing the New Democrats by a wide margin – 43 per cent to 28 per cent. Awarding the contracts to Vancouver and Halifax, especially after the provincial government stepped in to ensure the survival of the Davie shipyards at Lévis, could scuttle Conservative fortunes in Quebec for good.

Two of three cities will be winners in this process, meaning one has to be the loser. In addition to determining which two bids are the most deserving, the Conservatives may need to ask themselves which region of the country they can least afford to disappoint.

Éric Grenier taps The Pulse of federal and regional politics for Huffington Post Canada readers on most Tuesdays and Fridays. Grenier is the author of ThreeHundredEight.com, covering Canadian politics, polls and electoral projections.