July 27, 2009
Canada ponders shipbuilding strategy
The Government of Canada today launched a "Shipbuilding Consultation" to get input from key stakeholders on comprehensive and viable options for a long-term, sustainable Canadian shipbuilding strategy.
The Government says it is committed to building and maintaining an effective federal fleet of ships for maritime security and services. It says that fleet renewal plans could see the Government invest in excess of $40 billion to build more than 50 large vessels over the next 30 years.
That renewal is long overdue. The Canadian Government has not placed any new substantial build orders for ships since the mid-1990s. Since then, it says, "the national shipbuilding capacity, once enhanced by the construction of the Canadian Patrol Frigates and Maritime Coastal Defence Vessels, has substantially eroded." Several Canadian shipyards have either closed or converted to more generalized industrial activity. This, combined with worldwide increases in shipbuilding costs, has "severely hindered Canada's ability to build ships cost-effectively, resulting in delays to federal fleet renewal."
The shipbuilding consultation process is seeking industry input on how to bring Canadian taxpayers value. It will involve discussion of long-term investments in the marine industry, with follow-on business for marine suppliers, other industrial sectors and Canadian suppliers. There will also be resulting investments in the development of skilled trades and apprenticeship programs, and research and development.
The process has kicked off with a two-day Shipbuilding Forum being held in Gatineau, QC, today and tomorrow.
The forum will opened with remarks from government officials, the Canadian Association of Defence and Security Industries (CADSI), the Shipbuilding Association of Canada (SAC), accompanied by discussion sessions involving all participants. Key partners in Canada's marine industry are being asked to provide written input, within the next 45 days, on the strategy and their proposals for the way forward.
Once written submissions are received, an Interdepartmental Working Group will review and consolidate the participants' proposals and this will form an important part of the Government's strategy.
When the projected demand for 50 new ships is equally applied to the entire 30-year build timeline, this demand would support the direct employment of 1,200 to 1,500 shipyard workers for 30 years and would also build skills and capacity within the industry. In addition to the 50 or so large ships, approximately 70 smaller vessels of less than 1,000 tonnes have been identified for renewal. Any new ships added to the fleet would generate additional demand for refit and repair work. For the Coast Guard, the refit and repair work done on a regional basis also creates work for shipyards.
The overall demand for new ships, coupled with the requirement for refit and repairs, will sustain several thousand direct shipyard jobs in Canada over the next 30 years, says the Government. When the work of material and equipment suppliers, system integrators, and designers are added, the amount of work generated goes up significantly.