Canada: One-Year Anniversary of National Shipbuilding Procurement Strategy Agreements

One-Year Anniversary of National Shipbuilding Procurement Strategy Agreements

On the first anniversary of the signing of the National Shipbuilding Procurement Strategy’s (NSPS) umbrella agreements with Irving Shipbuilding in Halifax and Seaspan in Vancouver, CADSI re-affirms its support of the Government’s policy decision to build ships in Canada in order to obtain the vessels needed by the Royal Canadian Navy and Canadian Coast Guard and to maximize jobs, innovation, manufacturing and economic activity in Canada from defence spending.

CADSI agrees with the Government position that the NSPS will take the boom and bust cycle out of shipbuilding in Canada by creating a more predictable environment and production schedule over 30 years of planned construction. In May 2009, in a report on the potential for Canadian shipbuilding, the CADSI Marine Industries Working Group estimated that 15,000 jobs and $2 billion could be generated annually through a strategy that fully engages the Canadian shipbuilding and marine sector in the construction and maintenance of the new fleets. CADSI stands by these estimates, which the government has echoed in its updates on the strategy.

CADSI supports the government’s commitment to engage with industry early, often and openly as the essential element of NSPS’ success and an important determinant in the final analysis of project costs, risk and domestic industrial participation from the design phase through construction, mid-life upgrades and decommissioning.

CADSI is also pleased that the Government reaffirmed its commitment to adopt procurement strategies that enable Canada’s defence and marine industrial base to be employed to the greatest extent possible through the work of Seaspan and Irving. At least 50% of the end value of the projects will come from the equipment that is built into the shipyards’ hulls to produce the final vessels needed by the military and coast guard to perform their duties as asked of them by Canadians. Canadian companies from across the defence and marine industrial base have many of the capabilities required to play a meaningful role to address the operational requirements of the RCN and Coast Guard. They are lining up to contribute their value-added products, technologies and services and thereby contribute directly to the Government’s objective to maximize jobs, innovation and economic activity in Canada from NSPS.

The NSPS engagement with Canadian industry is consistent with recommendations from Tom Jenkins in his recent report on reforming defence procurement, in part, through a focus on domestic Key Industrial Capabilities (KICs). In fact, Mr. Jenkins lists “Arctic and Maritime Security” as the first of his recommended KICs, which presents clear opportunities both for the government and the Canadian defence and security sector in each of the NSPS projects.

CADSI fully expects that progress on executing procurements under NSPS will continue to pick up pace, and that clarity on procurement strategy expectations for Canadian content will only increase as a result.

CADSI is the voice of Canada’s defence and security industries. CADSI represents over 950 member companies who are essential contributors to Canada’s national defence and security. The sector employs 109, 000 Canadians and generated over 12.6 billion dollars to the Canadian economy in 2011.
CADSI, March 1, 2013; Image: