National Shipbuilding Strategy

National Shipbuilding Strategy. A major, long-term industrial and procurement initiative by the Government of Canada designed to renew the fleets of the Royal Canadian Navy and the Canadian Coast Guard while revitalizing the domestic maritime industry. Announced in 2010 and significantly updated in 2022, the strategy aims to create a sustainable, innovative shipbuilding sector through strategic partnerships with selected Canadian shipyards. It represents one of the largest and most complex procurement undertakings in Canadian history, seeking to ensure national sovereignty and security while generating significant economic benefits across the country.

Background and objectives

The genesis of the strategy lay in the aging state of key federal vessels, including the Halifax-class frigate and numerous Canadian Coast Guard icebreakers and science ships, which required costly life-extension refits. A pivotal review, the Report of the Expert Panel on Federal Support to Research and Development, highlighted systemic issues in federal procurement. The primary objectives were to end the historical cycle of "boom and bust" in Canadian shipbuilding, establish a predictable workload for industry, and rebuild sovereign capacity to design, build, and maintain complex warships and government vessels. This was seen as essential for asserting control over the Arctic and vast coastlines, particularly in the context of increasing activity in the Northwest Passage and competing territorial claims.

Key components and programs

The strategy is structured around three key pillars: large vessel construction, small vessel construction, and vessel repair, refit, and maintenance. For large combat vessels, Irving Shipbuilding in Halifax was selected as the strategic partner under the Combat package, tasked with the Canadian Surface Combatant program to replace the Halifax-class frigate and the Arctic and Offshore Patrol Ship project. For large non-combat vessels, Seaspan's Vancouver Shipyards in North Vancouver was chosen for the Non-Combat package, which includes the Polar Icebreaker (CCGS John G. Diefenbaker), the Offshore Oceanographic Science Vessel, and Joint Support Ships. Small vessel construction is managed through competitive processes across other Canadian shipyards, including programs for Canadian Coast Guard patrol vessels and fisheries research ships.

Implementation and progress

Implementation has been managed by federal departments including Public Services and Procurement Canada, Innovation, Science and Economic Development Canada, and National Defence. The first major milestone was the delivery of the lead Arctic and Offshore Patrol Ship, HMCS Harry DeWolf, in 2020. Seaspan has delivered several Offshore Fisheries Science Vessels and the first Joint Support Ship, HMCS Protecteur. The highly complex Canadian Surface Combatant program, based on the BMT Type 26 frigate design from BAE Systems, formally began its design phase in 2023. The strategy's 2022 update, "Our North, Strong and Free," reaffirmed commitments and added new vessels, such as additional Arctic and Offshore Patrol Ships and multi-purpose vessels for the Canadian Coast Guard.

Economic and industrial impact

The strategy has generated substantial industrial and regional benefits, creating thousands of jobs at the major shipyards in Halifax and Vancouver and within a nationwide supply chain spanning all provinces and territories. It has spurred significant investments in modernizing shipyard infrastructure, such as the installation of new panel lines and goliath cranes. The associated Value Proposition obligations require shipyards to make mandatory investments in Canadian technology and human resources, fostering innovation and skills development. Studies, including those by the Conference Board of Canada, have projected multi-billion dollar contributions to Gross Domestic Product and sustained employment over the strategy's multi-decade timeline.

Challenges and criticisms

The initiative has faced significant challenges, including substantial cost escalations, schedule delays, and criticisms over transparency. The estimated cost for the Canadian Surface Combatant program has risen dramatically since its inception, drawing scrutiny from the Office of the Parliamentary Budget Officer and the Auditor General of Canada. Complexities in design, global supply chain disruptions, and a competitive international market for skilled labour have contributed to delays, particularly for the Polar Icebreaker. Some analysts and opposition parties, including the Conservative Party of Canada, have criticized the strategy for not delivering vessels faster to address urgent capability gaps in the Royal Canadian Navy and Canadian Coast Guard, while others debate the opportunity costs of such a concentrated industrial policy.

Category:Government of Canada Category:Shipbuilding Category:Royal Canadian Navy Category:Canadian Coast Guard Category:Economic policy in Canada