Equipping the Royal Canadian Navy and the Canadian Coast Guard—National Shipbuilding Strategy: 2016 annual report

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Large vessel shipbuilding projects

In 2016, $270.8 million of new large-ship construction was awarded to both the Irving Shipbuilding’s Halifax Shipyard and Seaspan’s Vancouver Shipyards.

The total on-going contracted activityFootnote 1 for large ship construction in 2016 resulted in over 7,400 jobs being created or maintained during the reporting period.

The shipyards are in full production, constructing technologically advanced ships for the Royal Canadian Navy and Canadian Coast Guard.

Vessels at Irving Shipbuilding’s Halifax Shipyard
Vessel Scope Status Client
Arctic and Offshore Patrol Ships 5 or 6 vessels Construction in progress on 2 vessels Department of National Defence
Canadian Surface Combatant 15 vessels Definition (design) phase Department of National Defence
Vessels at Seaspan's Vancouver Shipyards
Vessel Scope Status Client
Offshore Fisheries Science Vessels 3 vessels Construction in progress on 2 vessels Department of Fisheries and Oceans
Offshore Oceanographic Science Vessel 1 vessel Basic and design development underway Department of Fisheries and Oceans
Joint Support Ships 2 vesselsFootnote 2 Definition (design) phase Department of National Defence
Polar Icebreaker 1 vessel Definition (design) phase Department of Fisheries and Oceans

Consult Annex A—Status of large vessel projects at the end of the report for more detailed information.

Irving Shipbuilding’s Halifax Shipyard

Irving Shipbuilding’s Halifax Shipyard began production of the Arctic and Offshore Patrol Ships on schedule in September 2015, and by December 2016, significant progress had been made on the construction of the future Her Majesty’s Canadian Ship (HMCS) Harry DeWolf, the first vessel in the class. Irving also commenced production of the second vessel, the future HMCS Margaret Brooke in August 2016.

Seaspan’s Vancouver Shipyards

The Offshore Fisheries Science Vessels being built by Seaspan’s Vancouver Shipyards will be the first large vessels delivered under the strategy, and construction of the first two ships is well underway, having commenced in June 2015 and March 2016, respectively. The third and final vessel is on track to commence construction in early 2017. On September 30, 2016, a significant milestone in the construction of the first Offshore Fisheries Science Vessel was reached when Seaspan’s Vancouver Shipyards mated a grand block, weighing over 170 tonnes containing the vessel’s wet lab (one of the key spaces supporting the ship’s missions) to the ship, fully enclosing the ships' propulsion motor room. This addition also brings the first group of mission equipment to the ship.

The Government of Canada has awarded the initial construction engineering contract to Seaspan’s Vancouver Shipyards to commence the work required to prepare for the construction of the Offshore Oceanographic Science Vessel and in February 2016, Canada awarded the long lead items and material contract to Seaspan’s Vancouver Shipyards. This contract enables the shipyard to initiate early discussions with potential suppliers and to purchase required material and equipment. A long lead Item and material contract has also been awarded to Seaspan’s Vancouver Shipyards for the Joint Support Ship.

A key element within the strategy selection process was the requirement for each bidder to provide its recapitalization plans to achieve a pre-defined "target state," by which the shipyards would:

The shipyard modernizations at Irving Shipbuilding’s Halifax Shipyard and Seaspan’s Vancouver Shipyards were performed at no cost to the Government of Canada and both shipyards remain committed and continue to progress towards the implementation of target state.

A final target state assessment will take place at each yard and subsequently, similar assessments will be repeated periodically to assess the shipyards’ sustained and improving levels of productivity.

National Shipbuilding Strategy in action: Creating long-term employment

Genoa Design International Ltd., a marine production design company based in St. John's, Newfoundland and Labrador, provides production lofting and detail design services to marine and offshore industries around the world.

Under the Offshore Fisheries Science Vessels supply contract, Genoa created and is using a 3D model with Seaspan’s Vancouver Shipyards to extract information to provide the manufacturing details required in a format suitable for the efficient construction of the Offshore Fisheries Science Vessels. The information provided is fully integrated with the construction plan and schedule developed by Seaspan’s Vancouver Shipyards.

Working on the National Shipbuilding Strategy non-combat package has allowed Genoa to hire approximately 30 new full-time employees and will allow them to train new Canadian employees in the skills necessary to produce manufacturing information for this type of vessel, providing an excellent reference for the export market to win additional contracts and maintain long-term employment in Canada.

Small vessel construction

For all small vessel construction projects, a competitive project-by-project procurement process is being undertaken among Canadian shipyards, other than Irving Shipbuilding’s Halifax Shipyard, Seaspan’s Vancouver Shipyards and their affiliated companies, who are not eligible to bid.

During the reporting period, $12.9 million of new small ship construction activity was contracted to Canadian shipyards.

The total on-going contracted activity for small ship construction in 2016 resulted in over 150 jobs being created or maintained during the reporting period.

In October 2016, the Government of Canada awarded a $5 million contract to Kanter Marine of St. Thomas, Ontario, to build 2 Channel Survey and Sounding Vessels for the Canadian Coast Guard. Once delivered by 2018 these new small vessels will replace the Canadian Coast Guard’s 2 current Channel Survey and Sounding Vessels operating in the St. Lawrence Seaway in the Coast Guard’s Central and Arctic region, which have been in operation for an average of 37.5 years and are nearing the end of their lifespan.

The new Channel Survey and Sounding Vessels will provide private and commercial boaters with information about channel bottom conditions and water depth predictions. These vessels will also provide the Department of Fisheries and Oceans as well as other departments and agencies with the capability to monitor and observe marine and environmental conditions.

In July 2015, Hike Metal Product Limited in Wheatley, Ontario, and Chantier Naval Forillon in Gaspé, Quebec were awarded competitive contracts to construct new Search and Rescue Lifeboats for the Canadian Coast Guard, valued at a total of $89 million. Under these contracts, the shipyards are building and delivering 6 Search and Rescue Lifeboats each, with options for an additional three. Construction is currently underway at both shipyards with delivery of the first vessels expected in 2017.

Repair, refit and maintenance projects

Contracts for ship repair, refit and maintenance requirements are competed through publicly announced requests for proposals. In 2016, the Government of Canada continued to invest in ship repair, refit and maintenance by providing work to the broader Canadian marine industry across the country. Maintaining a domestic ship repair capability is critical to supporting Canada’s federal fleets. Current repair, refit and maintenance activities include frigates, submarines, as well as Kingston and Orca class vessels, and the auxiliary fleet of small boats, barges, tugs and diving tenders.

This work has benefitted numerous Canadian shipyards and suppliers’ right across the country, including Ontario, Nova Scotia, British Columbia and Quebec. During the reporting period $188.6 million of new contracts were awarded or amended for the Canadian Coast Guard and the Royal Canadian Navy.

Included in this total is the $3.1 million modernization of the Canadian Coast Guard Ship (CCGS) Sipu Muin, undertaken by Réparations Navales et Industrielles Océan in Québec City. The work, completed in December 2016, provided hull repairs, modifications to the pilot house, upgrades to the electronic navigation suite as well as the replacement of the fuel bladders and skirting of the 19-year old vessel.

The year also marked the completion of a $2 million contract with Heddle Marine of Hamilton, Ontario, for the drydocking and repair of HMCS Haida. As well, vessel life extension work was completed at Chantier Davie for 2 Coast Guard vessels: the CCGS Henry Larsen ($16 million contract value) and the CCGS Earl Grey ($14 million contract value).

The Victoria Class Submarine In-Service Support Contract (VISSC), contributes approximately $200 million of work annually and directly sustains approximately 200 jobs in Esquimalt, British Columbia, plus another 200 jobs elsewhere in Canada. In 2016, an additional $880 million was also allocated for the VISSC Contract in order to cover the actual maintenance costs over the life of the contract.

The total on-going contracted activity for repair, refit and maintenance in 2016 resulted in over 10,000 jobs being created or maintained during the reporting period.

National Shipbuilding Strategy in action: Developing Canada’s marine sector

In August 2016, the Government of Canada announced an $8.7 million contract to Verreault Navigation Inc. for important refit and maintenance work on the Canadian Coast Guard Ship (CCGS) Pierre Radisson. The work will be done in Les Méchins, Quebec. This is part of Canada’s commitment to enhancing meaningful economic opportunities for the Canadian marine sector and related industries via the National Shipbuilding Strategy.

The CCGS Pierre Radisson is a medium icebreaker based in Québec, Quebec, normally operating in the St. Lawrence River, the Gulf of St. Lawrence and the Canadian Arctic.

The work began in September 2016 and is scheduled to be completed in 2017, sustaining 100 jobs in the process. Main work items will include steel work, maintenance and repairs on several tanks, hull recoating, reconditioning the helicopter deck and hangar, replacement of windows and portholes, maintenance on propulsion and steering components, as well as interior repairs.

Other marine projects

While the National Shipbuilding Strategy is a long-term plan to build ships in Canada, there will also be, from time to time, other necessary requirements. The Government of Canada engages with industry in open and transparent processes, as requirements are identified to support the Canadian Coast Guard, Royal Canadian Navy and the entire federal fleet.

For example, following the early retirement of the two Royal Canadian Navy replenishment ships in 2014, the Government of Canada entered into an at-sea replenishment services contract with Federal Fleet Services Inc. (formerly Project Resolve Inc.) to provide the Royal Canadian Navy with an Interim at sea Auxiliary Oiler Replenishment capability prior to the delivery of the two Joint Support Ships being constructed at Seaspan’s Vancouver Shipyards.

Under the contract, Chantier Davie Canada Inc., a major subcontractor to Federal Fleet Services Inc., is conducting the conversion work that will meet Transport Canada regulations. The procurement is seeing economic benefits realized across the country, with approximately 400 people currently working at Chantier Davie on the conversion of the vessel, as well as another 300 people working as sub-contractors across Canada. The project is expected to be completed by early 2018.

In November 2016, the Government of Canada issued a request for information (RFI) to seek input from the marine industry on options for filling potential interim needs in the Canadian Coast Guard’s delivery of icebreaking services. As part of the Canadian Coast Guard’s commitment in the Oceans Protection Plan, the request for information also seeks input on strengthening the Canadian Coast Guard’s marine pollution response capacity. Solutions presented by industry will inform decisions on how to best fill potential capability gaps and ensure continuity of service given the age and condition of Canadian Coast Guard’s fleet and the time it will take to deliver new ships. The Government of Canada is currently analyzing the information received through the RFI and, in the short-term, will be re-engaging industry on its towing requirements, and in the medium term on its ice breaking capacity requirements.

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