New Canadian Shipbuilding Strategy

[Uzlu]

The medium icebreaker conversions will end up as a long term fix, because more CCG ships will die of natural causes due to old age.

Yes.

 

[Navy_Pete]

The medium icebreaker conversions will end up as a long term fix, because more CCG ships will die of natural causes due to old age.

But aren't the coversions already 20 years old?  That give the CCG a bit of breathing room to nail down the project requirements and get it rolling, but sounds like they could keep a yard busy with just building ice breaker replacements for a long time. With how slow our complex project approval/procurement system is, we almost need to factor in a 10-15 year lead time for anything, and start planning for a replacement almost as soon as we get something.

Part of the CCG issue is they don't have an overarching white paper laying; it's a bunch of work, but makes it easier to triage replacements and plan ahead to keep critical capabilities once it's been approved, as you don't need to reinvent the wheel and justify every projects existence from scratch.

 

[Colin Parkinson]

Give this man a cookie for spotting what successive governments and senior management missed or swept under the rug for another day. NP you are bang on the issue and it's not going away soon. I always said the NSPS was a good idea 20 years to late.

 

[Navy_Pete]

To be fair, there were a number of people that had been pushing for an NSPS on and off since the 90s, but never hit critical mass and got support until the mid 2000s.  It was kind of obvious when the CPFs were winding down, and the CCG rust out happened to coincide with navy projects, so got roped in about a decade ago.  Maybe need a 20 year lead on getting a strategy in place as well?

Guess that is the kind of thing that is tracked at a portfolio level, and glad there are people that like that kind of thing so I can stay in the day to day work. 50 year horizon is an interesting thing to chew about over a coffee/pint, but not my cup of tea for a primary duty.

 

[Colin Parkinson]

I was deeply involved in large infrastructure projects like bridges, dams, etc. When you start speaking of impacts over a 75-200 year timeframe, most of the politicians and most senior management zone out, they just don't care about longterm as they are to wrapped out in the short term and how it effects them.

 

[Uzlu]

Ottawa officially launches process to bring 3rd shipyard into national strategy

The process to bring a third shipyard into the National Shipbuilding Strategy is officially getting underway.

Whichever firm is selected will be tasked with building six newly announced icebreakers that will operate in the Atlantic Ocean and through the St. Lawrence waterways, officials say.

Fisheries and Oceans Minister Jonathan Wilkinson announced the start of the competitive process from Iqaluit on Friday and stressed that the process will take into account technical, operational and financial considerations from bidders — even if only one shipyard were to apply.

Global News first reported on July 24 that the process would launch this month.

The announcement comes after Wilkinson and Prime Minister Justin Trudeau pledged close to $16 billion for a renewal of the aging coast guard fleet; two of the ships will be additional Arctic and Offshore Patrol Ships from Irving Shipyard in Halifax while the other 16 will be multi-purpose vessels from Seaspan in Vancouver.

But just six months before making that announcement in May, officials had been doubling down in private insisting that no such plans were being considered.

No deal will be signed with a shipyard before the election and the process to select a winner will likely take about a year based on how similar processes unfolded for the other two firms that are part of the National Shipbuilding Strategy.

The strategy was created by the former Conservative government in 2011 to bolster the domestic shipbuilding industry, which has historically been subject to the boom-bust cycles of government procurement. But it has faced repeated delays and cost increases over the years.

There is only one other Canadian shipyard that is not part of the strategy: Quebec’s Chantier Davie.

That was the firm at the heart of the Vice-Admiral Mark Norman affair after he was accused of leaking in November 2015 a plan by the Liberals to freeze a sole-sourced deal with Davie for interim supply ships negotiated by the former Conservative government just prior to the 2015 election.

The Crown stayed its case against Norman earlier this year, citing lack of evidence.

Sources both within and outside the government have told Global News they believe Davie is the only player positioned to benefit from the process.

The decision to open up the strategy has raised questions from defence industry experts about why it is coming so close to an election.

Quebec City, where Davie is located, is politically competitive and the two Liberals in the largely blue region only won their seats in 2015 by single-digit margins.

Davie itself is located in the riding of Conservative MP Steven Blaney.

It was among five firms that had initially been invited to submit proposals to do the work under the original selection process for the strategy but its bid lost because the shipyard was in bankruptcy protection at the time.

It has been aggressively pursuing work on retrofit and maintenance contracts ever since but is not part of the official strategy.

Inclusion in the strategy would open the door to the shipyard being able to bid on a larger range of more lucrative projects.

https://globalnews.ca/news/5718947/national-shipbuilding-strategy-third-shipyard/

 

[Navy_Pete]

Missed this when it was posted a few weeks ago, but John Turner (former ADM(Mat)) has joined the Seaspan team as the VP for government relations.

This position is the go-between for Canada and the NSS operations, so the first POC.  Understand there have been ongoing changes since the new CEO came in last year, so this one is kind of interesting, as the previous VP was one of the last ones left in the executive from the bid. In case anyone is curious, Mr. Turner had no part in the bid eval or shipyard selection (it was all done about five levels down the chain).

https://www.seaspan.com/seaspan-shipyards-welcomes-john-turner-vice-president-government-relations

Seaspan Shipyards Welcomes John Turner as Vice President, Government Relations

North Vancouver, BC – Seaspan Shipyards today announced that John Turner will join the company as Vice President, Government Relations on August 19, 2019. Mr. Turner will be based out of Seaspan’s Ottawa office that was recently opened in May of this year and will be responsible for the day-to-day management of Seaspan Shipyards relationships with the federal and B.C. provincial governments.

Mr. Turner’s appointment follows changes to Seaspan’s senior leadership over the past 12 months, including appointments of Mark Lamarre as Chief Executive Officer, Jari Anttila as Chief Operating Officer, John McCarthy as Chief Program Officer and Tony Winter as Vice President, Project Delivery.

Mr. Turner joins Seaspan from Newfoundland and Labrador based PAL Aerospace where he has worked since April 2017, first in the role as Vice President Operations and more recently as Senior Vice President Business Development. Prior to that, Mr. Turner served as Associate Deputy Minister (February 2015 to March 2017) and Assistant Deputy Minister (Materiel) (December 2012 to February 2015) at the Department of National Defence. Mr. Turner holds a Master of Strategic Studies from the US Army War College, a Master of Business Administration from Queen’s University and a Bachelor of Engineering Management from the Royal Military College of Canada.

 

[Good2Golf]

Seaspan will be well-served by John Turner - he’s astute, well connected and a genuinely nice person - congratulations to both him and Seaspan on news of his appointment.

Regards
G2G

 

[Spencer100]

They have to get this one out before the election

https://www.halifaxtoday.ca/local-news/irving-shipbuilding-awarded-500-million-contract-for-work-on-halifax-frigates-1640762

 

[Navy_Pete]

For context, every single east coast DWP has been done at Irving.  Only the 280s, steamers, (and maybe PRE?) did out of area refits in the last 30 years. All this is doing is bundling the same work into a contract.

This is the same RFP that was put out last fall that awarded some work to Davie, and gave the west coast work to Seaspan (in the Victoria yard).

There was too much work on the east coast for either to do on their own (because of the scope growth from aging ships and schedule overlaps) but means they will be competing for the non-guaranteed work.  This is good for the east coast as it means that ISI needs to sharpen the pencils on the refit side and step up it's game, but also should give some more wiggle room if big jobs come up when you start poking around, as there isn't such a domino affect on the ships waiting to come in.

With only 5 ships on the west coast, it's manageable by one yard.

If it didn't get announced soon, would be in limbo until early 2020, so imagine there was probably a bit of pressure to make sure it was signed before election time rolls around.

This is also good news for looking down the road to when AOPs and JSS join the coastal fleets, as we'll have a lot more 3rd line work.  West coast may also need to start looking at another yard (or at least another docking facility) in the next 10 years or so.

 

[Colin Parkinson]

Point Hope is building a graving dock that will do the MCDV"s but I think the AOPS  are to big

 

[Navy_Pete]

Will be interesting to see what Point Hope can do; if they have the facilities and labour pool a floating dry dock is always an option as well. There a whole raft of small shipyards on the Island and BC coast that can do something the size of the MCDV/ORCAs, so think that's were they usually end up going.

The port weller dry dock and I think the ones in Davie have cut outs filled with concrete blocks specifically to accomodate the props, sonar etc.  Maybe they've thought ahead and included those features?

AOPS has the stabilizing fins as well, so those are another complication, as there is definitely some docking dependent work there.

 

[Humphrey Bogart]

Here is a question I have:

With a recession probably coming, does this undermine the National Shipbuilding Strategy or does it strengthen it?  Will we see the Military get a large influx of funding for Capital Projects because JOBS JOBS JOBS or does the Government slash the budget as part of an overall austerity plan?

 

[Navy_Pete]

Flip a coin; the BGHs could spin it either way.

Maybe depends who gets elected and how they do on the coasts.  I would bet any austerity though would like come from trimming scope of the ship capabilities though, or maybe having a bunch of 'fitted for but not with' just because of how the shipyard contracts are set up.  Stuff like spares, ammunitioning etc are probably the easiest to kick down the line and make someone else's problem without having any real job or program impact.  Costs more in the long run, but if you at least run the cables/piping etc during the build part, can always fill the box or mount the gear later.

 

[Infanteer]

In a Keynesian model, it should be good because you ramp up public spending through major projects to stimulate the economy.  However, seeing how the current Ministry deficit spent through the nose during a strong economy, I can't see Keynesian logic applying....

 

[Cloud Cover]

The theories of John Maynard Keyes are exactly the ones relied on and used by Floyd Laughren+ Robert Rae in 1991 to go into deficit 17 billion dollars in a single budget, and the province books have never recovered. The Ontario economy itself did not turn around until the deficit funded 30% tax cuts of 1996, plus some dull version of austerity. “stay alive ‘’til 95” was the mantra of every 20 something looking for a job, house, etc. The province has never really balanced its books since, although they were close in the early 2000’s. The economy of 1995-2008 was the last blue collar manufacturing based economy in the province.
All that to say- when out of borrowing room, cutting core budgets was not as effective as cutting core taxes and moving deficit spending out of core and into services.  So I would hope the feds don’t cut defence capital spending, as this is a core federal responsibility that is not a service: it’s a key dependency of responsible government.

 

[Spencer100]

I wish Kenyes had never wrote his stuff.  The theory sounds good but the Pols use it pay off the voters.  Plus they never reign in spending in good times.

 

[Underway]

I wish Kenyes had never wrote his stuff.  The theory sounds good but the Pols use it pay off the voters.  Plus they never reign in spending in good times.

That stuff was going on loooooong before Kenyes (Romans, Plebians  bread and circuses comes to mind)

 

[Navy_Pete]

The Romans were pretty transparent about the bread and circuses though, and didn't really coat it with much of a veneer of BS. Also, they actually gave bread to the masses and put on triumphs, feasts and circuses that were open to the Roman public.

Keynesian economics continues to be used as a 'trickle down economics theory to transfer riches to the fortunate few under the guise of good for the masses.

The NSS does sustain a lot of jobs; the question of it would be cheaper to buy offshore and invest the delta in something else is really an academic question as that was never an option, as Canada has had a 'Build in Canada' policy since the 60s.  One good thing they did was embed a lot of the data reporting requirements in it.  There is no specific target, but at least they can say the impact of the spending is X, and we get ships as well.

One area that I think is underappreciated for govt investment during economic dips is infrastructure repairs. Roads, bridges, utilities etc. are generally all coming due for their lifetime replacement, and it's something that the govt can direct funds into which will have a positive impact on the country (or at least prevent big issues from the infrastructure failing requiring emergency repairs).  Putting down asphalt, laying pipe (hi-oh!) and pouring concrete aren't sexy, but is one of those things that governments at all level should be making sure is done.  Going to cost a collective fortune, but not going to get better if we go full ostrich for a decade.

 

[Underway]

One area that I think is underappreciated for govt investment during economic dips is infrastructure repairs. Roads, bridges, utilities etc. are generally all coming due for their lifetime replacement, and it's something that the govt can direct funds into which will have a positive impact on the country (or at least prevent big issues from the infrastructure failing requiring emergency repairs).  Putting down asphalt, laying pipe (hi-oh!) and pouring concrete aren't sexy, but is one of those things that governments at all level should be making sure is done.  Going to cost a collective fortune, but not going to get better if we go full ostrich for a decade.

Transportation infrastructure investments are generally the best investments a gov't can make at any time.  They continue to create/sustain wealth long after the original jobs are gone.