Department of National Defence

Department of National Defence

July 27, 2009 15:05 ET

Government of Canada Launches Shipbuilding Consultation

OTTAWA, ONTARIO--(Marketwire - July 27, 2009) - Today marks the opening of the Government of Canada's Shipbuilding Consultation, which seeks input from key stakeholders on comprehensive and viable options for a long-term, sustainable Canadian shipbuilding strategy.

The Government is committed to building and maintaining an effective federal fleet of ships for maritime security and services. 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.

"I would like to thank the Canadian shipbuilding industry for their attendance at this consultation and for their invaluable contribution to this important initiative," said the Honourable Peter MacKay, Minister of National Defence and Minister for the Atlantic Gateway. "Our combined efforts will help ensure the Canadian Navy gets the fleet of vessels it needs, while high-value jobs are created and sustained in shipyards across Canada."

"In the past few federal budgets, our Government has invested $1.5 billion in the Canadian Coast Guard fleet, demonstrating our ongoing commitment to the safety and security of coastal communities, as well as the industries that sustain shipbuilding, and we will continue to invest," said the Honourable Gail Shea, Minister of Fisheries and Oceans. "I am looking forward to working more closely with industry as we plan our investments for the future."

The two-day Government Shipbuilding Consultation is being held in Gatineau, Q.C. The Government will use the information received at the consultation to outline its objectives for a long-term shipbuilding procurement strategy, along with its commitment to federal fleet renewal.

"We recognize that Canada's marine industry is a key economic driver and the lifeblood of many communities from coast to coast," said the Honourable Tony Clement, Minister of Industry. "This Government is taking the opportunity to seriously look at a new approach to shipbuilding procurement, one that will engage industry in an open and frank manner."

"This Government is providing the men and women of our Canadian Forces and Canadian Coast Guard with top of the line equipment, while ensuring Canadian taxpayers get the accountability they expect and deserve," said the Honourable Christian Paradis, Minister of Public Works and Government Services. "Today we are building on our long-term relationship with domestic shipbuilders so they can continue to deliver and support our Canadian fleet."

The input of Canada's marine industry is a crucial part of building Canada's future fleet. The consultation, led by the Department of National Defence, will open with remarks from Ministers MacKay, Shea, Clement and Paradis. It will also include presentations from government officials, the Canadian Association of Defence and Security Industries (CADSI), and the Shipbuilding Association of Canada (SAC), and will be accompanied by discussion sessions involving all participants. Industry will then have 45 days to provide written feedback on their view of the way forward.



BACKGROUNDER

CANADIAN SHIPBUILDING CONSULTATION

Introduction

The Government will invest in building and maintaining an effective new federal fleet of ships for maritime security and services. Over the next 30 years, the Government will need to build some 50 large vessels, with an estimated value of over $40 billion. The Government of Canada will consult with Canada's shipbuilding companies, and key shipbuilding stakeholders, to get broad input into the development of comprehensive and viable options to establish a long term, sustainable shipbuilding strategy.

Recognizing that Canada's marine industry is a key economic driver, the Government of Canada remains committed to its policy of procuring, repairing, and refitting its vessels in Canada. An effective, long-term shipyard posture in Canada is the best way to replace a federal fleet of ships over the next 30 years with maximum benefits for Canada and Canadians. This Government is committed to equipping the Canadian Forces and the Canadian Coast Guard with the modern vessels they need to operate in the 21st century.

An effective strategic relationship between the federal government and the marine industry is a win-win for Canadians and for Canadian industry. The government will procure the ships it needs to properly protect and serve Canada and Canadians while a sustainable shipbuilding industry will create jobs and regional benefits for small and medium enterprises across the country.

The shipbuilding consultation process is seeking industry input on how to bring Canadian taxpayers value. This consultation 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.

Background

The Government has not placed any new substantial build orders for ships since the mid-1990s. 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 pursuits. The erosion of Canada's shipbuilding capacity, combined with worldwide increases in shipbuilding costs, have severely hindered Canada's ability to build ships cost-effectively, resulting in delays to federal fleet renewal.

It has become clear that the time has come to consider alternative approaches to ship procurement for the federal fleet. Developing a strategy with industry to create and maintain an effective and efficient, long-term shipyard posture in Canada necessitates a multi-departmental approach in close partnership with key marine industry stakeholders.

Looking Ahead

Canada is a maritime nation with the longest coastline of any country in the world. Modern, multi-purpose Navy and Coast Guard fleets are essential to sustaining Canada's sovereignty and prosperity.

The demand for new ships, as well as the need for refit and repair of the federal fleet, will sustain thousands of jobs for Canadians over the coming decades.

It is expected that more than 50 federal government ships with a displacement of over 1,000 tonnes will be procured in the next 30 years. The shipyard labour demand for these large ships is estimated to be approximately 70 million person-hours over 30 years.

When the demand 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. When the work of material and equipment suppliers, system integrators, and designers are added, the amount of work generated goes up significantly.

Process

The Shipbuilding Forum on July 27th and 28th, 2009, will be a major step in the consultation process, outlining the Government's objectives for shipbuilding procurement and its commitment to federal fleet renewal. The Forum will open 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 will be asked to provide written input 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.

Contact Information

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