I see, on social media, that some of my Conservative friends are outraged by a report (almost a year old) from Murray Brewster on CBC News which explained that “Federal officials overseeing the country’s shipbuilding program warned the Liberal government that they were being leaned on to steer up to $1.2 billion worth of repair and upgrade work on naval frigates toward the Irving-owned Halifax Shipyard, internal documents reveal … [and] … Officials at Public Services and Procurement Canada used remarkably blunt language to draw the attention of the minister at the time, Judy Foote, to backroom discussions related to an impending construction gap between different classes of warships … [further] … The documents paint a fascinating portrait of the behind-the-scenes political, bureaucratic and corporate tension over the multi-billion dollar shipbuilding program, which has been beset by cost escalations and delays.“
It is, indeed, “fascinating;” it is, also, quite normal and legal and above board and I can assure readers, from my own personal experience, that both industry and the government put pressure on one another as each seeks advantages. I would have been shocked had Irving not used every available tool to try to keep their workforce busy; I would be equally shocked had MPs, including the Speaker, who, despite his high and mighty office, is still a constituency MP, not listened to Irving’s pleas and tried to press the government to support Irving. The government can and does play hardball, too, when it wants something. It is, I guess, part of the nature of government contracting.
What the report does tell us, albeit between the lines, is that it is time for the next (Conservative) government to revisit the National Shipbuilding Strategy, which was launched in 2010, based on conditions at the time, to ensure that the plan and the participants still meet Canada’s needs.
What is a bit troubling is that it seems to me that Irving might be falling into the trap that I believe caused Davie to be left out of the original shipbuilding procurement plan in the first place. Davie was, then, one of the darlings of “Québec Inc” and, under both the Trudeau (père) and Mulroney governments, it had been almost guaranteed continuous government work. Davie‘s management got lazy and the company lost its competitive edge, by 2010 it was almost bankrupt. New, foreign management turned Davie around, but I suspect that the lure of guaranteed, by a government, support is too strong for any company to resist and, now, Irving may want to fall into the same
trap situation that was disastrous for Davie.
The intent of the original National Shipbuilding Strategy was that government work would help companies to survive the slow periods which are inevitable in any business cycle; the intent was NOT to allow companies to depend on government contracts. To that degree, it was a good plan and it can and should work, even for three large, national yards: Seaspan on the Pacific coast, Davie in the St Lawrence and Irving on the Atlantic seaboard. But warships should be produced in a fairly steady stream, batch after batch, as the St Laurent, Restigouche, Mackenzie and Annapolis classes were, in the 1950s and ’60s, rather than in concentrations as was the case for the Halifax class in 1980s and ’90s, thus spreading out the work and allowing for steady product improvements. But, sadly, in the 1970s Canadian defence procurement entered a “feast or famine” mode from which it has never recovered. Politicians and the civil service seem unable to even imagine a bipartisan, national defence force development (and, therefore equipment procurement) strategy.
Defence procurement is not at or even near the top of Canadians’ priority lists but it is a topic that can always provoke opposition outrage … no matter which party is in governments and which is opposition.