The federal government does the right thing …

Parliamentary Affairs reporter Daniel Leblanc, writing in the Globe and Mail, says that HMCS FREDERICTON Anti-Ship Missile Defence ExerciseThe federal government will award a third of the work on $1.5-billion of maintenance contracts on its military frigates to the Davie shipyard in Quebec, cementing the shipyard’s anticipated partnership with two other firms on Canada’s national shipbuilding strategy, federal officials say … [and] … The move comes amid pressure on Ottawa to provide additional contracts to Davie, which is located south of Quebec City in a part of the country heavily courted by all political parties during federal elections. Davie has long complained of unfair treatment under the government’s shipbuilding strategy.”

I think that the federal government was right to exclude Davie from the original national shipbuilding procurement strategy in 2011. At the time, Davie was in poor financial shape due to decades of mismanagement which was, in turn, due in part to a “rule” that was in place from the 1970s, that said that about 25% of all contract spending had to go to Québec. The governments of the day (Liberal and Conservative) didn’t care what was being built or bought as long as Québec companies got ¼ of the money. It was a result of Pierre Trudeau’s misguided bastardization of the notion of fiscal federalism.

I think that this decision, confirmed by Public Services and Procurement Canada, is also right. Chantier Davie has been turned around, partly by foreign ownership, and is now, a vital part of Canada’s shipbuilding potential.

We need to note that this contract is for Canada’s current fleet of 12 Halifax class frigates, Screen Shot 2019-05-13 at 17.37.15launched in the late 1980s. They will be in service until the 2040s. The new, larger Canadian Surface Combatants, AKA Type 26 Global Combat Ships, which will be built in Halifax starting in the 2020s will have a separately contracted maintenance support system. I expect that Irving Shipbuilding, the Halifax based builder, which is also building the Harry DeWolf class arctic offshore patrol ships, will fight hard to keep the maintenance work for itself; I also expect that the government will want, at least, both East and West coast maintenance contracts.

3 thoughts on “The federal government does the right thing …

  1. There is little doubt that Chantier Davie is a more solvent shipyard today than even ten years ago. It is also a given that the cost of constructing ships in Canada will always be considerably more expensive than a comparable ship constructed in a foreign shipyard. Northern climate, union labour, robust safety program, expectation of corporate profit, etc.. All of these factors, plus more, will drive up the eventual cost of a made in Canada product.

    If we accept the additional cost to construct ships in Canada, and that there is no true cost competition between the three main shipyards in Canada, is it not prudent to spread the work between all three shipyards? As can be expected there will be a lot of political wrangling and negative press as corporate greed takes over. No shipyard, that has the right political connections, will let any potential work slip away with out a fight. If fighting over existing shipbuilding is counterproductive what about potential new work on the Canadian Navy wish list?

    Project Resolve, there is still the potential to acquire a second naval supply ship in a reasonable timeline and at a very good price. Realistically the two supply ships on order, from a shipyard on the West Coast, are many years away from the operational status of both ships.

    Project Resolute, the opportunity to fast track the acquisition of a Class 1 icebreaker should not be squandered. Again the currently contracted Class 1 icebreaker, from the same shipyard on the West Coast, is years away from operational status. China is currently constructing their third Class 1 icebreaker and has applied for special status at the Council of Arctic Nations. Canadian claims of Arctic Sovereignty should be backed up with a reasonable presence of Canadian icebreakers in the Arctic Ocean.

    A midlife upgrade for the twelve Kingston Class MCDV vessels. Although these ships have a few shortfalls they have been used for missions well beyond their original design. These ships have crossed the Atlantic Ocean, sailed to Hawaii, multiple trips to the Carribean, sovereignty patrols in the Canadian Arctic, etc.. A new main gun, possibly the same gun as on the AOPS, would add a credible weapon system to the ship. The ships were originally designed to handle add on containerized systems so the future possibilities are unlimited. I understand that the Navy, and most likely the Canadian shipyards, are promoting a new design. Reality shows that a new Canadian design / build will take considerably longer and cost considerably more than a midlife upgrade, if a new ship ever gets past the design phase.

    There is more than enough ship construction to keep all three main Canadian shipyards busy for the foreseeable future. The main question, is there the political will to keep the company lobbyists at bay, and with the Canadian taxpayer in mind, get the job done?

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