Speech from the Honourable Judy M. Foote, Minister of Public Services and Procurement on Canadian Surface Combatant streamlined
Halifax, Nova Scotia
June 13, 2016
Check against Delivery
Welcome everyone, thank you, Kevin. Resting on the traditional territory of the Mi'Kmaq people, this is a world-class facility. The scope and scale of the work being done is impressive. I am pleased to be joined today by the Honourable John McKay, parliamentary Secretary to the Minister of National Defence. Also joining us are Darrell Samson, Member of Parliament for Sackville—Preston—Chezzetcook, and the Mayor of Halifax, Mike Savage. They all share my appreciation of the efforts underway here and across the country to equip our men and women in uniform.
The National Shipbuilding Strategy is a long-term, made-in-Canada plan to renew the fleets of the Royal Canadian Navy and the Canadian Coast Guard. It is creating jobs and prosperity for Canadians, and re-establishing a world-class shipbuilding industry in our country.
Both Irving and Seaspan, our two main shipyards under the National Shipbuilding Strategy, have made significant investments in their facilities and brought skilled people and managers into their workforces.
The work taking place here on the Arctic Offshore Patrol Ships is now well underway and the first ship is scheduled to be completed in 2018. After the last ship is produced, we will start building Canada's next generation of warships.
And that is why we are here today.
In the last half of 2015, National Defence conducted an intensive review of the Royal Canadian Navy's requirements. The review refined the Navy's needs and determined that existing warship designs, with some modification, could meet the requirements of the surface combatant.
As a result of that review, as well as departmental advice and extensive industry consultations, I am pleased to be here today to announce that we are taking a simpler and faster approach to delivering the new fleet of surface combatants to the Royal Canadian Navy.
Through our streamlined approach, there will be a single competitive process to select an existing warship design, along with the systems and equipment that will be successfully integrated into the ship design.
The new approach significantly reduces the design and technical integration time, as well as associated risks.
Today's announcement means that construction of the first surface combatant ship in Halifax can start up to two years sooner than originally planned.
This approach will support job stability. It will help ensure a continuous flow of work between shipbuilding projects.
Based on projected schedules, construction on the surface combatant will now be able to start shortly after work on the Arctic Offshore Patrol Ships is completed in the early 2020s.
The surface combatant fleet, to include up to 15 warships, will replace the Iroquois-class destroyers and the Halifax-class frigates.
Remember that one of the major objectives of the National Shipbuilding Strategy is to provide a steady program of work to retain the workforce, expertise and technologies that have been developed.
This approach will also be more economical. We are currently revising our costing model to more accurately set estimates for this and other ship builds. Once this work is complete, we will be able to put a specific dollar figure on the savings.
These ships are being built in Canada, and the streamlined procurement approach in no way lessens our commitment to leverage meaningful economic opportunities for the Canadian marine sector and the Canadian economy.
Already, the contracts awarded to date for large vessels are contributing nearly $4.4 billion of the gross domestic product and creating or maintaining up to 5,500 jobs per year, starting in 2012 and up to 2022. And these figures will increase over time.
Irving estimates that the surface combatant and the Arctic Offshore Patrol Ships projects will create, at peak, 2,400 direct shipbuilding jobs here in Halifax.
In a report released last week on project investments in this region, the Atlantic Provinces Economic Council highlighted the strong impact the strategy is having on the Nova Scotia economy.
It is essential that a project of this magnitude generate lasting benefits for Canadian firms and workers. This is why industry engagement is so important—the next session will be held later this month.
Economic benefits on this project will be leveraged in two ways, under the Industrial and Technological Benefits Policy, as well as Value Propositions.
First, under Industrial and Technological Benefits, the winning bidder and Irving Shipbuilding will be required to do work in Canada and to make investments in Canada equal to 100% of the value of the design and build contracts.
Those investments support research, technological development and innovation; foster exports; and promote the development and growth of Canadian-based suppliers, in particular small and medium-sized enterprises.
Second, Irving Shipbuilding is obligated to spend 0.5% of contract revenues with the aim of creating a sustainable marine industry across Canada.
Those investments focus on three priority areas—human resources development, technology investment and industrial development—which will help to grow our marine industry.
For example, just last week, Irving Shipbuilding announced a contribution of $2 million to the Nunavut Arctic College to help fund research projects to better involve local residents in research, enhance marine safety and improve response to marine incidents. A similar research partnership is underway with the Marine Environmental Observation Prediction and Response Network, a centre of excellence based at Dalhousie University.
The streamlined surface combatant approach was guided by input from our industry partners who have been engaged on this project from the beginning.
We also considered input from our shipbuilding expert advisor, Steve Brunton, to develop the new approach.
The shipbuilding strategy is good for Canada, but it can be better. We intend to improve the strategy in several areas, including governance, oversight and budgeting.
Those improvements will be based on the experience gained over the last five years since the strategy was launched, best practices used elsewhere, and ongoing discussions with the shipyards and industry stakeholders.
We are developing new procedures to ensure that accurate and timely costing information is provided to Canadians. This information will also allow us to better measure the savings that will be realized through our streamlined approach.
This strategy not only equips our Navy and Coast Guard, but also rejuvenates our marine industry and brings good middle-class jobs and prosperity to many communities throughout the country.
We are determined to rebuild the marine industry and renew Canada's reputation as a major shipbuilding country.
This strategy is a long-term commitment for continuous shipbuilding projects. The simpler and faster approach for delivering the next generation of surface combatants honours our commitment to ensure the Royal Canadian Navy is able to operate as a true blue-water maritime force.
It also means the men and women in uniform will have the tools they need to do their important work sooner.
They deserve no less. Thank you.
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