New Canadian Shipbuilding Strategy

[MarkOttawa]

Meanwhile Irving and fries with everything--more of our shipbuilding (and other defence procurements) lunacy:

Critics question Canadian defence industrial benefits policy

The federal government is coming under fire for allowing Irving Shipbuilding to claim an Alberta French fry plant as an industrial benefit of a contract to build warships for the Canadian navy.

Under the Industrial and Regional Benefits (IRB) policy – later renamed the Industrial and Technological Benefits policy – the federal government requires prime contractors of defence procurements to undertake business activity in Canada equal to 100 per cent of the value of the contracts they are awarded. Key objectives of this policy are to support the sustainability and growth of Canada’s defence sector and boost innovation through research and development.

Irving Shipbuilding Inc. has more than $3-billion of IRB obligations arising from the contract it was awarded by Ottawa to build Arctic and offshore patrol ships. According to the Department of Innovation, Science and Economic Development, the company has fulfilled more than $1.4-billion of these obligations and has more than $353-million “in progress,” with another $1.3-billion yet to be identified.

As The Globe and Mail reported earlier this week, after Cavendish Farms, another company in the Irving business empire, invested $425-million in a frozen-potato processing plant in Lethbridge, Alta [clearly a bitter civil frozen frie war with the McCains, the other [über-capitalist rulers in the Maritimes]--., Irving Shipbuilding earned a credit of approximately $40-million toward its IRB obligations under the Arctic vessel contract.

Opposition critics and defence analysts said they don’t fault Irving, which complied with the rules to receive the IRB credit. But, they say, a frozen-potato processing plant is not really the ideal outcome of a policy intended to ensure that defence procurement supports the economic development of Canada’s defence industry.

“The last time I checked we have not fought a war using French fries,” said NDP MP Charlie Angus, who added the rules need to be tightened so that companies cannot claim frozen-food plants for industrial and regional benefit obligations.

Michael Byers, a University of British Columbia political science professor, said the IRB policy should be limited to creating business activity in defence-related fields.

“I see no evidence that Irving has done anything wrong here,” Mr. Byers said. “But the Canadian government has made at least two serious mistakes: Designating the Canadian shipyards as prime contractors and then not restricting the allowable IRBs to directly defence-related investments.”

Stephen Saideman, a political scientist at Carleton University, said that while the French fry plant may fit the criteria established by Ottawa for defence contractors to meet their obligations to generate economic spinoffs, it’s not what the policy was really intended to spur.

“Does it advance Canadian innovation and knowledge transfer in defence? No. Does it employ Canadians? Yes. Is this kind of economic benefit IRBs are supposed to yield? Not what was intended, certainly,” Prof. Saideman said...
https://www.theglobeandmail.com/politics/article-critics-question-canadian-defence-industrial-benefits-policy/

Mark
Ottawa

 

[MilEME09]

Could claim defense related if those potateos end up in IMPs

 

[Oldgateboatdriver]

Or a more serious question here: Does the use of IRB defence dollars to put up a French fries plant in Alberta contravenes the Defence policy of encouraging healthy lifestyle ???





I jest!  ;D

 

[Patski]

OMG....you guys never heard of potato cannons?  :rofl:

 

[Dale Denton]

What's so wrong with any company doing so?

If General Dynamics invests more $ in a mcgoober plant in Upper Nowhere, then why wouldn't that count as a Regional Industrial Benefit? They are a giant company with hands in everything, so they can invest and build up smaller sectors than our defence industry. Narrowing it down to Defence-industry-only IRB's would be severely limiting. IRB's soley exist for the country-at-large's benefit, not our defence industry sector alone.

 

[Stoker]

What's so wrong with any company doing so?

If General Dynamics invests more $ in a mcgoober plant in Upper Nowhere, then why wouldn't that count as a Regional Industrial Benefit? They are a giant company with hands in everything, so they can invest and build up smaller sectors than our defence industry. Narrowing it down to Defence-industry-only IRB's would be severely limiting. IRB's soley exist for the country-at-large's benefit, not our defence industry sector alone.

There's nothing wrong with it. When Canada bought the Leopard tanks, the Germans bought Canadian Wheat. I bet if you looked at other purchases through the years you would see the same.

 

[Navy_Pete]

What's so wrong with any company doing so?

If General Dynamics invests more $ in a mcgoober plant in Upper Nowhere, then why wouldn't that count as a Regional Industrial Benefit? They are a giant company with hands in everything, so they can invest and build up smaller sectors than our defence industry. Narrowing it down to Defence-industry-only IRB's would be severely limiting. IRB's soley exist for the country-at-large's benefit, not our defence industry sector alone.

IRBs and the Value Proposition attached to the NSS are specifically meant to result in growth in shipbuilding and the marine industry. Both policies are supposed to encourage a Canadian supply chain and development of new related small industries, and come with a cost (which we can't quantify, because they don't even really look at the options to use existing supply chains for a lot of stuff because there are penalities involved in not meeting the obligations). It's common sense to see though that it's easier to use existing, proven suppliers than try and develop new ones though, and that development time and the risk both have costs.

They limit project options, take extra time, and add a lot of overhead, all of which are paid for by Defence.  Which is fine if it's recognized, but it's not, so you end up cutting capabilities to fund job growth and other similar things that are important to Canadians, but add absolutely no capability to the ships.  The project money is specifically approved to provide said capabilities.

The old 'cost to build in Canada' is a nightmare arguement that has been on the go since the 'Build in Canada' policy got put in place in the 60s,, but stuff like this has arseclowns from TBS and Finance howling for the whole NSS to be scrapped, or to put in additional oversight (which adds more delays and overhead costs while building redundant red tape empires for some wanna be mandarin).

None of this would be a big deal if there was a Minister in overall charge of the whole thing with branches of DND, ISED, PSPC etc reporting to them and authority to back the other central agencies off, but there is a bakers dozen of useless MPs at the top of the whole mess, so it's a lot of defferred decisions, lower level marking time, and escalating costs due to all the BS (resulting in even more capability cuts when all this stuff bloats the budget).

 

[Colin Parkinson]

Can we clone CD Howe?

 

[Colin Parkinson]

just heard they are launching the next OFSV next week. Be nice if they did it publicly and announced it.

 

[Uzlu]

Seaspan launches second Coast Guard ship

Shipyard ceremony marks 90% completion of vessel Capt. Jacques Cartier

Flags flew, the national anthem was sung and spray from a ceremonial bottle of champagne misted politicians and dignitaries Wednesday as Seaspan Shipyards celebrated the launch of its second Coast Guard fisheries vessel Wednesday, the Capt. Jacques Cartier.

“This is a historic fleet renewal,” said Minister of Fisheries and Oceans Jonathan Wilkinson, MP for North Vancouver. “It’s time we put in place the resources to commit to renewal of the fleet.”

The Jacques Cartier is the second of three offshore fisheries vessels being built by Seaspan for the Coast Guard under a $687-million fixed-price contract to replace existing ships that are nearing the end of their lifespan.

Like the other fisheries vessels, the 63-metre Jacques Cartier will work on monitoring of fish stocks and the impact of climate change as well as being equipped for emergency environmental response and search and rescue missions. Each ship will have four on-board labs for use in scientific research along with modern acoustic survey equipment.

At 90 per cent complete, the Jacques Cartier was to be floated out of the shipyard Wednesday night and taken to Seaspan’s nearby Vancouver Drydock where finishing work on the ship will take place. The ship will be delivered to the Coast Guard this winter, following sea trials, according to Seaspan.

Later this month, the first Coast Guard ship built at Seaspan, the Sir John Franklin, will also be delivered to the government, 18 months after a similar official launch.

Construction of the first ship was marked by a steep learning curve, including hull welding defects that had to be corrected. That ship was completed both late and over budget – a cost that Seaspan absorbed under the terms of its contract.

“No shipbuilding program is without its challenges and we’ve had ours,” CEO Mark Lamarre – who joined Seaspan Shipyards as its chief executive officer in July – told the crowd.

But Seaspan officials said the company has learned from its early mistakes.

The federal government’s announcement last month that 16 more Coast Guard ships will be built at Seaspan at a cost of $15.7 billion is “a clear vote of confidence in our shipbuilders, in our supply chain and in our company,” said Tim Page, vice-president of government relations, adding that the Coast Guard is Seaspan’s “most important long-term customer.”

The announcement of the 16 additional ships provides an important message, said Lamarre. “A commitment to predictable future work is also necessary for us to invest in our people, infrastructure and technology,” he said Wednesday.

Seaspan is the largest manufacturing employer in the Lower Mainland, noted B.C. Labour Minister Harry Bains, and a critical driver for skilled jobs and economic activity in the marine industrial sector.

Those comments come as the federal government has announced plans to open up the national shipbuilding program to a third shipyard – generally expected to be Davie Shipyard in Quebec - and the possibility that shipyard may get some work previously promised to Seaspan.

https://www.nsnews.com/news/seaspan-launches-second-coast-guard-ship-1.23846221#standardArticleCarousel

 

[MarkOttawa]

Thank goodness for the North Shore News and good local media reporting (how much longer?)--and basically bye bye to the shipbuilding "strategy".  Poor Canadian shipbuilding realities and politics are bringing it down hard. Then there's the failure of this and previous Conservative government really to give a damn about replacing RCN and CCG ships in any timely fashion (pity we couldn't buy that polar icebreaker abroad, as Australia is doing for Antarctic, big 25,500 t. ship http://www.antarctica.gov.au/icebreaker/about-the-ship):

Addition of third federal shipyard could impact work at Seaspan
16 more Coast Guard vessels to be built here, icebreaker may go to Quebec

For local shipbuilders, there’s good news and there’s bad news.

The good news: the first two Coast Guard vessels built by Seaspan are nearing completion and Ottawa recently announced Seaspan will be tapped to build 16 more.

The bad news: in the same announcement, Prime Minister Justin Trudeau said Ottawa is opening up the national shipbuilding program to a potential third shipbuilder, likely Davie Shipyard in Quebec. And that shipyard is likely in the running to build an icebreaker previously promised to Seaspan.

Following the announcement in Vancouver, the Coast Guard confirmed it is substituting the 80- to 90-metre multi-purpose vessels for a polar icebreaker in the government’s order book with Seaspan.

“The non-combat package is a challenging program of work, compounded by the construction of the large, one-off polar icebreaker,” a spokesman for the Coast Guard wrote in an email. “Therefore, Canada made the decision to substitute the one polar icebreaker with a long run of 16 multi-purpose vessels. Given the importance of icebreaking capacity, the government is exploring other options to ensure the polar (icebreaker) is built in the most efficient manner, but no decisions have been taken.”

North Vancouver MP Jonathan Wilkinson, who is also minister of fisheries and oceans, said local shipbuilders shouldn’t be concerned that Ottawa is substituting one project for another.

The ships being built by Seaspan will still be “the core of the future fleet of the Coast Guard,” said Wilkinson.

He said it makes a lot more sense for Seaspan to build multiple ships of a similar design than to build “one-off” ships like the icebreaker.

Wilkinson didn’t comment directly on whether the icebreaker will be built by Davie. “What we have said is there is a third shipyard that will be brought into the mix,” he said. “We haven’t delineated what that shipyard will work on.”

In an email to the North Shore News, a Coast Guard spokesman said a third shipyard is needed because current work will keep both Seaspan and Irving busy for the next 15 to 20 years and “their facilities cannot concurrently begin other construction projects. The government has pressing marine requirements and needs additional ships to be delivered in an earlier timeframe.”

Those changes shouldn’t be surprising, said Chris Madsen, a North Vancouver resident and professor at Canadian Forces College in Toronto, whose research includes shipbuilding and naval procurement.

“Davie is in a much better position to build (an icebreaker) on time,” he said. Icebreakers are the specialty of the Quebec shipyard and the ships cost less because their labour costs are much lower, he said.

“They are a very competitive shipyard.”

Davie has already provided Ottawa with an interim naval supply ship – which it is leasing to the government – while the government waits for Seaspan to build the massive joint support ships.

The Quebec shipyard has also been awarded a $610-million contract to build three “interim icebreakers” for the Coast Guard. The first of those was delivered May 30.

With a federal election looming, politics will also likely play a part in which shipyard builds the icebreaker, said Madsen. “Shipbuilding is a major employer in that part of Quebec, he said, noting about 2,500 people work at Davie.

Tim Page, vice-president of government relations for Seaspan, called Ottawa’s decision to open the shipbuilding program to a third shipyard “an unexpected and disappointing development.”

Page said that “effectively changes the playing field and rules of engagement” under which Seaspan and Irving Shipyards in Halifax were awarded agreements by Ottawa in 2011.

Page said the shipyard still needs to discuss the issue with Ottawa “on an urgent basis.”

On May 29, B.C.-based Seaspan also announced the opening of an Ottawa office as “evidence of Seaspan’s commitment to strengthen relationships with its government customers.”
https://www.nsnews.com/news/addition-of-third-federal-shipyard-could-impact-work-at-seaspan-1.23847618

Bah! Humbug! FUBAR! Not a serious federal government, Conservative or Liberal, in dealing with its core responsibilities.

Mark
Ottawa

 

[Uzlu]

pity we couldn't buy that polar icebreaker abroad

If it is a level playing field, buying that polar icebreaker abroad might look less attractive.

The report said the main problem facing the industry is that foreign governments heavily subsidize their shipyards, leaving Canadians unable to compete.

https://www.cbc.ca/news/canada/no-subsidies-for-shipbuilding-industry-says-tobin-1.270095

That article goes on to state that “more frequent purchasing of ships by the navy” is seen as a solution.  And, I am assuming, also more frequent purchasing of ships by the coast guard is another solution.  This is why we cannot buy that polar icebreaker abroad.  This is why the National Shipbuilding Strategy was established—to buy ships in Canada instead of to buy ships abroad.

 

[Colin Parkinson]

Ouch....


“To date, Davie has not been notified by Public Services and Procurement Canada, Innovation Canada or the Department of National Defence about any media inquiries,” said Frederik Boisvert, vice-president of public affairs at Davie.

https://www.theglobeandmail.com/politics/article-davie-says-ottawa-never-told-it-about-journalist-queries-about/?fbclid=IwAR0e4EwMFMt1TQFewRdbZwnhAfXzfnf2e8RF_2OT63eAeTKG6g--pOW8syM

 

[MarkOttawa]

There will be plenty of CCG work for Davie, given ancient fleet and Seaspan already full up, without the polar icebreaker--just get it built abroad, much cheaper and probably within three/four years ( https://www.damen.com/en/news/2016/05/australian_icebreaker_operated_by_dms_maritime_to_be_constructed_by_damen ):

Ottawa to turn to a third shipyard to build Canada’s polar icebreaker

The federal government intends to turn to a third Canadian shipyard for the construction of its long-awaited polar ice breaker, according to officials at the Department of Fisheries and Oceans, which oversees the Canadian Coast Guard.

Under Canada’s National Shipbuilding Strategy, Seaspan’s Vancouver Shipyards and Irving Shipbuilding of Halifax had received the lion’s share of shipbuilding contracts for the Canadian Coast Guard and the Royal Canadian Navy.

That included the construction at Seaspan’s Vancouver Shipyards of the future polar icebreaker CCGS John G. Diefenbaker, named after Canada’s 13th prime minister.

However, given the importance of icebreaking capacity for Canada, Ottawa “is exploring other options to ensure the polar icebreaker is built in the most efficient manner, but no decisions have been taken,” said in an email to Radio Canada International Jocelyn Lubczuk, the press secretary of Fisheries and Oceans Minister Jonathan Wilkinson.

“To support future shipbuilding needs, and attract more talent and good jobs to communities through the country, the Government of Canada intends to add a third Canadian shipyard as a partner under the National Shipbuilding Strategy,” Lubczuk said.

Full order book for Seaspan and Irving

Prime Minister Justin Trudeau announced in May that the federal government plans to spend $15.7 billion over the coming years to completely renew the coast guard’s ageing fleet and provide it with 18 new ships – 16 built by Seaspan’s Vancouver Shipyards and two civilian versions of the navy’s Arctic and Offshore Patrol Ship (AOPS) built by Irving Shipbuilding in Halifax.

    Ottawa commits to complete fleet renewal for Canada’s Coast Guard
    Ice-capable Canadian Coast Guard ships could be both ‘a blessing and a curse’: expert

The current work packages will keep both Irving Shipbuilding Inc. and Seaspan Vancouver Shipyards working to capacity until the late 2030s-2040s and their facilities cannot concurrently begin other construction projects, Lubczuk said [emphasis added].

“The government has pressing marine requirements and needs additional ships to be delivered in an earlier timeframe,” Lubczuk said.

“To help support these additional requirements, the Government of Canada is launching a competitive process[emphasis added--REALLY?] to add a third Canadian shipyard as a strategic source of supply to help ensure the timely delivery of additional vessels to the federal fleet.”

With the construction of the two non-combat Joint Supply Ships (JSS) for the navy and the 16 Multi-Purpose Vessels (MPVs) for the coast guard, the federal government has essentially given Seaspan enough business to keep it busy for 20 years, Lubczuk said.

“Coast Guard’s future plans include the polar icebreaker to ensure continued delivery of its Arctic program,” Lubczuk said. “We have the design completed and are confident that when it is built, the new polar icebreaker will be a great addition to the fleet in support of Arctic sovereignty and northern science research.”

Officials at Seaspan could not be reached in time for publication.

Good news for Davie?

Experts and industry insiders who spoke to Radio Canada International said they expected the contract for the construction of the future polar icebreaker to go to the Davie Shipyard in Quebec.

While making the announcement on the construction of 18 new ships for the coast guard, Trudeau also alluded to the fact that the workload at Seaspan’s Vancouver Shipyard and Irving’s Halifax Shipyard is “an opportunity for Davie to apply to become that third shipbuilding facility [see at end for other vessels for Davie].”

Frédérik Boisvert, vice-president of public affairs at Davie, said the company has not heard anything official from Ottawa regarding changes in the government’s plans for the construction of a heavy polar icebreaker.

“However, it’s no secret that we’ve got a tremendous expertise in building ships on time and on budget but especially, we’ve got a real expertise in building icebreakers,” Boisvert said.

“In 2013, we made an unsolicited proposal to build Canada’s future polar icebreakers because everyone within the industry was aware that it could not be achieved under the original National Shipbuilding Procurement Strategy,” Boisvert added.

If the government had accepted it back then, Canada would already have a new polar icebreaker, he said.

Refitting medium icebreakers for the Coast Guard

“Obviously, as the third shipyard of the National Shipbuilding Strategy we’re willing to partner with the government on whatever key projects they want us to be involved in,” Boisvert said.

Last year, Davie signed a $610-million contract with the federal government to acquire and convert three medium icebreakers to renew the Canadian Coast Guard’s ageing fleet.

These icebreakers will carry out icebreaking duties in Atlantic Canada, the St. Lawrence and the Great Lakes and Arctic regions.

One of these icebreakers, CCGS Captain Molly Kool, was delivered to the coast guard in December of 2018, the two remaining icebreakers will be delivered in late 2019 and early 2020, Boisvert said.

“But it’s far from over, Canada needs to renew its entire fleet of icebreakers,” he said.

“As well as the polar icebreakers (of which two are required), there are approximately 10 other medium and heavy icebreakers required by the Canadian Coast Guard which are not included in the existing umbrella agreements and we believe these ships will be included in Davie’s Large Ship Package [emphasis added].”

Timothy Choi, a maritime strategy expert at the University of Calgary’s Centre for Military, Security and Strategic Studies, said awarding the contract to Davie would make a lot of sense for the Liberal government.

“It’s actually a pretty clever way to do two things that had up until now been contradictory,” Choi said.

It allows the federal government to ensure steady work at Seaspan’s Vancouver Shipyard, avoiding the boom-bust-cycle of the shipbuilding industry, while also ensuring that the coast guard will get its polar icebreaker much sooner than under the original construction schedule, Choi said.

It’s also a shrewd political move with upcoming federal election in October, Choi added.
http://www.rcinet.ca/en/2019/06/10/davie-shipyard-canada-polar-icebreaker/

These are the other vessels that should keep Davie pretty busy for a while:

...
The Government of Canada will also proceed through a competitive process with the design of a new class of smaller ships, the new Mid-Shore Multi-Mission Ship, which would complement the work of the large fleet in shallow areas and deliver mid-shore science activities...
https://pm.gc.ca/eng/news/2019/05/22/prime-minister-announces-renewal-canadian-coast-guard-fleet

Mark
Ottawa

 

[Stoker]

There will be plenty of CCG work for Davie, given ancient fleet and Seaspan already full up, without the polar icebreaker--just get it built abroad, much cheaper and probably within three/four years ( https://www.damen.com/en/news/2016/05/australian_icebreaker_operated_by_dms_maritime_to_be_constructed_by_damen ):

These are the other vessels that should keep Davie pretty busy for a while:

Mark
Ottawa

I was wondering how they all of a sudden got a "expertise" in building ice breakers when all they really did was do some light conversion work of existing ice breakers. The only mention online is the one heavy ice breaker and now according to Davie is a further package of ten, is this true or is it Davie self promoting themselves again?

 

[Colin Parkinson]

They just did a major refit on the Louie St Laurent, so technically they have more 'current" experience than anyone. Although it may be a case of the one eyed man in the land of the blind.

 

[Uzlu]

I was wondering how they all of a sudden got a "expertise" in building ice breakers when all they really did was do some light conversion work of existing ice breakers. The only mention online is the one heavy ice breaker and now according to Davie is a further package of ten, is this true or is it Davie self promoting themselves again?

“As well as the polar icebreakers (of which two are required), there are approximately 10 other medium and heavy icebreakers required by the Canadian Coast Guard which are not included in the existing umbrella agreements and we believe these ships will be included in Davie’s Large Ship Package.”

http://www.rcinet.ca/en/2019/06/10/davie-shipyard-canada-polar-icebreaker/

There are sixteen icebreakers, soon to perhaps go up to eighteen old icebreakers.  So Davie might just be saying that a large number of icebreakers are going to have to be built in a hurry.  I suppose we just have to wait until the contracts are signed and steel is cut.  No Canadian yard has expertise building icebreakers. 

I blame the incompetent politicians for allowing this to happen.  What should have happened is that all the political parties agree to a continuous-build strategy for naval and coast-guard ships.  One yard, for example, could have built sixteen icebreakers ordered at a rate of one every eighteen months.  But, again, it takes competent politicians for something like this to have happened.

 

[Kirkhill]

Which of Canada's yards have experience building the hulls they are currently building?

 

[Colin Parkinson]

Part of the blame lies with the CCG management and with the voters who don't think beyond their own neighbourhood. Politicians pander to the voter. 

 

[Stoker]

http://www.rcinet.ca/en/2019/06/10/davie-shipyard-canada-polar-icebreaker/

There are sixteen icebreakers, soon to perhaps go up to eighteen old icebreakers.  So Davie might just be saying that a large number of icebreakers are going to have to be built in a hurry.  I suppose we just have to wait until the contracts are signed and steel is cut.  No Canadian yard has expertise building icebreakers. 

I blame the incompetent politicians for allowing this to happen.  What should have happened is that all the political parties agree to a continuous-build strategy for naval and coast-guard ships.  One yard, for example, could have built sixteen icebreakers ordered at a rate of one every eighteen months.  But, again, it takes competent politicians for something like this to have happened.

We all know they need to built. All I'm saying Davie tend to embellish sometimes, as far as I can tell the contract will be for one Ice breaker. Its sad that the contract probably won't be signed until after the election.