Addressing challenges: Canada’s National Shipbuilding Strategy—2019 annual report

Navigation for Canada’s National Shipbuilding Strategy: 2019 annual report

The Government of Canada (GC) is continuously working in concert with shipyards to monitor improvements in shipyard productivity, manage and adhere to timelines, and to closely monitor costs, all while investigating and implementing opportunities to minimize any potential work disruptions related to fluctuations in production.

Earlier this year, the GC and its shipbuilding partners demonstrated how the National Shipbuilding Strategy (NSS) provided the flexibility in addressing these challenges. For example, fluctuations in production and sustaining a skilled workforce at shipyards have been mitigated by re-sequencing the joint support ship (JSS) and offshore oceanographic science vessel projects, as well as adding the construction of a sixth Arctic and offshore patrol ship (AOPS). This allowed for uninterrupted work at the shipyard, mitigating the risk of potential layoffs and fluctuations in production between builds.

In 2019, the government faced new challenges with emerging shipbuilding needs. In order to ensure capacity to deliver important services that save lives, protect the environment, and help our economy grow, while keeping Canada’s waters safe, secure, and open, the Canadian Coast Guard (CCG) needed new vessels to do their important work. In May 2019, the GC announced the construction of up to 18 new large vessels to renew the CCG fleet:

Adding these vessels will keep both shipyards working to capacity until the late 2030s to 2040s. This long production run will better allow shipyards to generate efficiencies that will ultimately benefit Canada, ensure greater workforce stability, and minimize production slow-downs.

With urgent icebreaking needs and to support future shipbuilding requirements, and attract more talent and good jobs to communities through the country, the GC launched a competitive process to add a third Canadian shipyard as a strategic source of supply. The shipyard will be called to build 6 new program icebreakers for the CCG. The addition of a third shipyard will also increase the capacity to deliver new vessels in a timely manner.

Furthermore, the GC continued to address current and future fleet maintenance needs by announcing new contracts for the maintenance of the Royal Canadian Navy’s (RCN) 12 Halifax-class frigates. Initial contracts worth $1.5 billion were awarded to ISI, Seaspan’s Victoria Shipyard and Chantier Davie. These shipyards will provide the necessary ongoing maintenance for the frigates until they are retired in the 2040s. These contracts are expected to create and sustain an estimated 400 direct jobs at each of the 3 respective shipyards and hundreds of spin-off jobs for material suppliers and sub-contractors.

The next classes of ships to be built, the Canadian surface combatants at ISI and the JSS at VSY, are highly complex projects. One of the challenges to be addressed in order to avoid fluctuations in production at the shipyards is a current shortage of experienced white and blue collar labour in the shipbuilding industry. Furthermore, it was previously acknowledged that original budgets for large vessel construction projects were set many years ago and were guided by limited experience and projections. Budgets have been updated, through the benefit of actual build experience at the yards, and continue to be closely monitored. For some large vessel construction projects, budgets remain under review and adjustments may be necessary.

We continue to leverage lessons learned to ensure future projections are realistic and achievable.

Navigation for Canada’s National Shipbuilding Strategy: 2019 annual report

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