The year ahead—National Shipbuilding Strategy: 2016 annual report
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With the world’s longest coastlines bordered by three oceans, Canada has a long and rich shipbuilding tradition. While Canada’s shipbuilding industry has been subject to periodic episodes of "boom and bust," the Government of Canada has, through the National Shipbuilding Strategy, reaffirmed its commitment to the sustainability of the shipbuilding industry as well as the timely and affordable delivery of vessels for the Royal Canadian Navy and the Canadian Coast Guard. The strategy has successfully begun the process of renewing these fleets over the next 30 years, as well as executing small ship construction procurements and repair, refit and maintenance efforts to support their needs.
While the strategy is still in its early stages of implementation, the economic benefits being derived are already substantial and will continue to produce significant wealth and opportunity for Canada, including affording opportunities for the introduction of Indigenous peoples and other underrepresented segments in the workforce to receive training and long-term work.
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Large ship construction
It is expected that in the coming year, National Shipbuilding Strategy activity will continue to grow. In fact, a formal request for proposals process to select a design for the Canadian Surface Combatant was released in October 2016, with construction of the first ship beginning in the early 2020s. The Joint Support Ship is also expected to move into the design and production engineering stage as a precursor to starting the build phase. As well, the Offshore Oceanographic Science Vessel project will continue with construction engineering. A construction contract will be negotiated with Seaspan’s Vancouver Shipyards once the required engineering work has been advanced.
Small ship construction
In terms of small vessel construction, in order to support Department of National Defence and Canadian Coast Guard operational requirements, Canadian shipyards will continue to undertake the construction and delivery of vessels under 1,000 tonnes. In the immediate future these efforts will include the Department of National Defence engaging industry in 2017, regarding the strategy to procure four commercially-designed near coastal tug boats.
As well, the Department of National Defence is currently finalizing requirements with respect to the Halifax class ship’s multi-role boats. Up to 30 9-metre rigid-hulled inflatable boats and 30 new cranes (launch and recovery systems) will be procured. It is anticipated that industry engagement will take place in 2017.
Over the coming years, the Coast Guard will procure additional small vessels to renew its fleet, including near shore fishery research vessels, special navaids vessels, mid-shore science vessels and specialty vessels.
Repair, refit and maintenance
When the new National Shipbuilding Strategy ships enter service, in-service support will be required. For the Department of National Defence, the first classes of ships to enter service will be the Arctic and Offshore Patrol Ships and the Joint Support Ships. It has been estimated that the potential value of a competitive in-service support contract would be approximately $5.2 billion over a 35-year duration. A competitive request for proposals was issued in July 2016, with the contract expected to be awarded in 2017. The winning bidder will serve as primary maintainer, design agent and overall primary service provider for these new vessels. Further in-service support procurement activities are currently underway to sustain the legacy fleet until its estimated end-of-life in the 2030s.
It is expected that over the next year vessel life extension work and in-service support efforts will continue across the country. Over $60 million of activity is expected to be undertaken over the next year in the regions across Canada to support the Canadian Coast Guard, Transport Canada and Royal Canadian Mounted Police. An example of such vessel life extension work is the efforts currently being undertaken with the CCGS Pierre Radisson. Work began on this ship in fall 2016, with an anticipated completion in 2017.
The National Shipbuilding Strategy is a long term commitment destined to cover 30 years of shipbuilding efforts. To date, a significant amount of effort has been undertaken in all areas of the strategy. Construction activity is underway across many regions of the country to support both Royal Canadian Navy and Canadian Coast Guard large and small ship construction requirements. Further, competitive procurements are being executed across the country to support vessel repair, refit and maintenance requirements of the Royal Canadian Navy and the Canadian Coast Guard. Significant yard modernization efforts have been undertaken at the Irving Shipbuilding’s Halifax Shipyard and Seaspan’s Vancouver Shipyards to enhance capability and to ensure higher levels of productivity are achieved. Supplier development opportunities for Canadian firms, including many small and medium-sized enterprises, have risen dramatically, with current levels of contracts at approximately $1.3 billion. The National Shipbuilding Strategy has and will continue to produce significant economic opportunities for Canada.
Looking forward to 2017 and beyond, the Government of Canada will continue to execute large and small ship construction projects and vessel repair and refit activities, affording Canadian industry with significant industrial opportunities. The government will also continue to work hand-in-hand with the shipyards to implement the lessons already learned and ensure the shipyards maximize productivity throughout the lifespan of the strategy. As well, the introduction of new technologies and process improvements will pave the way for the continual development in the efficacy of the program itself and in particular in the ability to realize the objectives of Canada’s National Shipbuilding Strategy.
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