Shipbuilding Procurement Strategy (Canada)
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| Shipbuilding Procurement Strategy (Canada) | |
|---|---|
| Name | Shipbuilding Procurement Strategy (Canada) |
| Established | 2010 |
| Jurisdiction | Canada |
| Managed by | National Shipbuilding Procurement Strategy |
| Key personnel | Rob Nicholson; John McCallum; Peter MacKay |
| Website | Official sources |
Shipbuilding Procurement Strategy (Canada) The Shipbuilding Procurement Strategy instituted a long‑term framework to replace aging naval and coast guard fleets and to revitalize Canadian marine industrial capacity. It aimed to coordinate procurement across the Royal Canadian Navy, the Canadian Coast Guard, and federal shipyards to deliver surface combatants, support vessels, and polar capabilities while creating domestic shipbuilding work for firms such as Irving Shipbuilding, Seaspan ULC, and SNC-Lavalin.
Background and Objectives
The initiative emerged from commitments made by figures like Stephen Harper and ministers including John Baird amid debates following the cancellation of projects tied to the Chretien era and the aftermath of the Gomery Commission inquiries into procurement. Objectives included fleet renewal for the Halifax-class frigate replacement, replacement of Harry DeWolf-class program requirements, support for Arctic sovereignty patrols tied to the Nunavut and Northwest Territories interests, and industrial benefits to shipyards in Nova Scotia, British Columbia, and Quebec.
Governance and Decision-Making
Oversight involved ministers such as Harjit Sajjan and institutions like the Department of National Defence, Fisheries and Oceans Canada, and the Treasury Board of Canada Secretariat. Decision-making relied on Crown corporations including Public Services and Procurement Canada and Crowned shipyards such as Chantier Davie Canada Inc. and contractors like BMT Group for design assessments. Interdepartmental panels consulted entities such as the Parliament of Canada Standing Committees on National Defence and Public Accounts to align mandate letters issued by prime ministers including Justin Trudeau.
Procurement Model and Industrial Benefits
The approach used a continuous shipbuilding model and two strategic yards: an East Coast partner represented by Irving Shipbuilding and a West Coast partner represented by Seaspan ULC, selected through processes informed by rulings from the Canadian International Trade Tribunal and procurement rules under the North American Free Trade Agreement transitional frameworks. Industrial benefits mirrored earlier arrangements like the Automotive Innovation Fund reciprocity and drew on local content principles applied in agreements overseen by Innovation, Science and Economic Development Canada to secure subcontracts with firms such as Vicinity Marine and FMC Technologies.
Major Programs and Ship Classes
Key programs included the Canadian Surface Combatant (CSC) to replace Iroquois-class destroyer and Halifax-class frigate vessels, the Arctic Offshore Patrol Ship program (AOOS) linked to the Harry DeWolf-class lineage, the Joint Support Ship project echoing ambitions seen in the Protecteur-class replacement, and the Polar Icebreaker initiative influenced by historical vessels like CCGS Louis S. St‑Laurent. Projects intersected with industrial plans from yards such as Seaspan Shipyards and Irving Shipbuilding's Halifax Shipyard while aligning requirements from agencies like the Canadian Coast Guard and inputs from designers including Lockheed Martin Canada and BAE Systems.
Contracting, Funding and Timelines
Contracts were structured as long‑term fleet construction packages with milestone payments and options for follow‑on blocks, negotiated under fiscal frameworks administered by the Department of Finance (Canada) and approved via appropriation acts debated in the House of Commons of Canada. Timelines were subject to change through amendments negotiated with prime contractors and suppliers like STX Canada Marine and were reported to parliamentary committees including Standing Committee on Public Accounts and Standing Committee on National Defence and Veterans Affairs.
Criticisms, Challenges and Reforms
The strategy faced scrutiny from audit institutions such as the Office of the Auditor General of Canada over cost overruns and schedule slippage, and criticisms in editorials from outlets like The Globe and Mail and National Post. Challenges cited included skills shortages exacerbated by demographics in regions like Newfoundland and Labrador, supply chain bottlenecks involving subcontractors such as DND suppliers, and legal disputes adjudicated by bodies including the Federal Court of Canada. Subsequent reforms referenced reports by panels chaired by figures linked to Raymond Boshra (example panelists) and policy adjustments influenced by international comparisons with programs in United Kingdom, Australia, and Norway.
Impact on Canadian Shipbuilding Industry
The program stimulated investments in physical infrastructure at facilities like Halifax Shipyard and Esquimalt Graving Dock, workforce development initiatives with institutions such as Nova Scotia Community College and BC Institute of Technology, and export opportunities engaging companies like Kongsberg Maritime via collaboration. Economic effects were debated in studies commissioned by provincial governments of Nova Scotia and British Columbia and by industry associations such as Association of Canadian Shipbuilders and Ship Repairers, with measurable outcomes in sustained shipyard employment, apprenticeship growth, and enhanced naval and coast guard capabilities.