Defence and marine procurement: Standing Committee on Government Operations and Estimates—November 16, 2020

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Defence and marine procurement: General accomplishments


Suggested responses and background information is provided on defence and marine procurement accomplishments.


Questions on defence procurement delays or the Department of National Defence (DND) order paper questions should be directed to the minister of National Defence.

Suggested response

Most recently:

If pressed on delays in defence procurement projects (questions on defence procurement delays should be directed to the minister of National Defence):


Major progress on defence and marine procurements over the last 18 months include:

Status of defence procurement projects


Due to COVID-19, several defence procurement projects slowed, including the construction and maintenance of ships.


All questions related to challenger jets should be referred to the minister of National Defence.

Suggested response

If pressed on the budget, delays and impact:

If pressed on the Future Fighter Capability Project:

If pressed on challengers (all questions related to challenger jets should be referred to the minister of National Defence) :

If pressed on the challenger contract:

If pressed on the third yard:

If pressed on ‘excusable delay’ requests:


Irving Shipbuilding

In response to COVID-19, Irving Shipbuilding Inc. (ISI) suspended most industrial operations as of March 20, 2020, with special measures for working from home or within ISI’s offices implemented where possible. Most of the workforce is now back in the shipyard while also ensuring physical distancing. COVID-19 safety measures have been implemented, including temperature screening for all individuals entering the site.

Construction of the Arctic and offshore patrol ships (AOPS) and maintenance of HMCS Charlottetown has gradually resumed since mid-April, though with reduced levels of efficiency. On July 31, 2020, the first AOPS was delivered and accepted by the Royal Canadian Navy. Due to COVID-19 related disruptions and other slippage, ISI has indicated a 6 to 9 month delay to future AOPS, with these timelines at least partly dependent on whether COVID-19 measures are continued or enhanced.

On October 27, 2020, 90 workers at Irving Shipbuilding’s Halifax Shipyard refused to work after the union alleged that a sub-contractor from Quebec arrived on October 19, and did not self-isolate. The shipyard has stated that the sub-contractor was granted an exemption from the provincial government to the 14-day self-isolation requirement for people entering the Atlantic bubble. Due to the number of personnel involved, the shipyard called the provincial Labour Department to investigate. Following recommendation by the Nova Scotia Labour Department, as of October 28, 2020, all workers have returned to work at the shipyard.

Vancouver Shipyards

Operations at Vancouver Shipyards (VSY) continue during COVID-19 but are being closely monitored. Staff not in direct support of production who had been working from home have begun returning to the office. In keeping with provincial regulations, only 50% occupancy is permitted. Approximately 95% of tradespeople are working in shifts at the shipyard. Measures being taken include:

VSY has been working closely with WorkSafeBC in implementing these practices, and has adjusted and escalated actions in response to new regulations and guidance.

This approach has allowed VSY to continue construction at a reduced rate of production for the first joint support ship (JSS) and final offshore fisheries science vessel (OFSV), the latter of which was delivered in October 2020.

Chantier Davie

On March 24, 2020, in response to COVID-19, the Quebec Government published a list of essential industrial sectors, under which Chantier Davie qualified. Chantier Davie has conducted on-site training for dealing with COVID-19, implemented a set of strict directives, and negotiated with their union to maintain intact squads instead of rotating employees through different teams. Nonetheless the workforce numbers and capacity have diminished to accommodate the social distancing measures implemented.

As of October 29, 2020, there have been multiple COVID-19 cases reported by Chantier Davie and they have invoked, in accordance with local health authority protocols, measures to report on and control the situation. These measures have reduced the number of reported cases from 26 to now just one case and the full impact on the workforce and schedule is being assessed.


To ensure that Canada obtains value for money, PSPC conducted a thorough cost analysis using supporting information from Bombardier as well as a third party market analysis. The price was deemed to be fair and reasonable.

Acceptance and title transfer of the aircraft occurred on June 30, 2020, and July 3, 2020. Both aircraft completed the first of 2 post-delivery retrofit periods in August 2020. Both aircraft are currently undergoing the second post-delivery retrofit in Whichita, Kansas, which is expected to be completed in early December 2020. The RCAF has been able to operate the aircraft since mid-August 2020.

Future Fighter Capability Project


As part of the Government of Canada’s reaffirmed commitment to invest in Canada’s military, as announced in the 2017 Canada’s defence policy: Strong, Secure, Engaged, the government launched an open and transparent competition in December 2017 to permanently replace Canada’s fighter fleet with 88 advanced jets—the Future Fighter Capability Project.


Suggested response


In June 2017, Canada’s defence policy: Strong, Secure, Engaged confirmed a fleet size of 88 advanced fighter aircrafts to replace the current CF-18s. The government launched a procurement process for the future fighter aircraft in December 2017. Officials conducted extensive industry engagement with suppliers to maximize the likelihood that Canada receives competitive proposals, and with Canadian industry to ensure that they are well positioned to participate in the procurement. 

In November 2018, France-Dassault Aviation officially withdrew from the competitive process.

In July 2019, the request for proposal was shared with the eligible suppliers.

In August 2019, United Kingdom (UK)-Airbus also withdrew from the competition.

On October 4, 2019, Canada received preliminary security offers from the remaining 3 eligible suppliers, outlining how the suppliers intend to meet Canada’s security and interoperability requirements. Canada completed the first security acceptability assessment on these offers and provided significant feedback to suppliers on January 31, 2020. The feedback helped suppliers understand the scope of information required in their proposals for Canada’s assessment of their security offer.

Next steps

A dialogue phase may be conducted with 2 or more compliant bidders in 2021 so they can address, in revised proposals, any issues and risks that are identified during the evaluation phase. Canada will finalize the contract terms with the preferred bidder prior to contract award which is anticipated in 2022.

Polar icebreaker


The Government of Canada is exploring procurement options for construction of the polar icebreaker. No decision has been taken.

Suggested response

If pressed on the Davie National Icebreaker Center:

If pressed on procurement practices:


Vancouver Shipyards’ non-combat package is a challenging program of work, which was made even more challenging by the inclusion of the large, one-off polar icebreaker. In 2019, Canada made the decision to substitute the one polar icebreaker with a long run of 16 multi-purpose vessels (MPVs). Adding a long production run of up to 16 MPVs will provide Vancouver Shipyards with a longer program horizon than a one-off polar icebreaker, helping to break the cycle of short production runs and provide an opportunity to generate greater efficiencies.

On February 28, 2020, the Government of Canada issued a RFI, open to all Canadian shipyards, seeking information on domestic shipyard capability and capacity to construct and deliver a polar-class icebreaker. The RFI closed on March 13, 2020, and PSPC received 4 responses for evaluation.

On June 9, 2020, Seaspan’s Vancouver Shipyards and Ontario-based Heddle Shipyards announced they will work together if they are awarded the contract to build the polar icebreaker.

On September 16, 2020, Seaspan’s Vancouver Shipyards and Newfoundland-based Genoa Design International announced they will work together on 3D modeling and design services if they are awarded the contract to build the polar icebreaker.

Another process is also underway to select a third shipyard under the NSS to build 6 program icebreakers for the CCG. Chantier Davie has pre-qualified as part of this process, which was overseen by an independent fairness monitor. The yard is now going through the next steps which will include a third-party assessment of the shipyard’s infrastructure, submission of a formal proposal, and a due diligence process to ensure the shipyard is financially capable of performing the work and making any necessary upgrades to its infrastructure. On July 29, 2020 the final request for proposal was sent to Chantier Davie.

National Shipbuilding Strategy


The National Shipbuilding Strategy (NSS) is a long-term commitment to renew the vessel fleets of the Royal Canadian Navy (RCN) and Canadian Coast Guard (CCG), create a sustainable marine sector, and generate economic benefits for Canadians.

Suggested response

Progress on current work

Third yard

Opportunities for other yards / Chantier Davie

If pressed on the polar icebreaker:

If pressed on the Chantier Davie National Icebreaker Center:

If pressed on interim icebreaker capacity for Canadian Coast Guard:

If pressed on Chantier Davie workers being exposed to lead (questions on lead exposure should be directed to the minister of Fisheries, Oceans, and the Canadian Coast Guard):

If pressed on Chantier Davie COVID-19 impact:

If pressed on Irving Shipbuilding Inc. COVID-19 impact:


Contracts under the National Shipbuilding Strategy

From 2012 to the end of June 2020, the government signed approximately $16.74 billion in new NSS contracts throughout the country. In terms of economic impacts of the NSS, contracts awarded in the period of 2012 to the end of 2019 are estimated to contribute over $17.04 billion ($1.54 billion annually) to gross domestic product (GDP), and create or maintain more than 15,521 jobs annually, through the marine industry and its Canadian suppliers between 2012 and 2022.

Table 1: National Shipbuilding Strategy contracts awarded from 2012 to the end of June 2020
Irving Shipbuilding Vancouver Shipyards Chantier Davie Other shipyards/Companies
$4.96 billion $4.30 billion $2.10 billion $5.38 billion
Table 2: National Shipbuilding Strategy contracts awarded by province
Province Total contract value percentage of total contract value
Alberta $20,987,395 0.13%
British Columbia $5,516,809,324 32.94%
Newfoundland and Labrador $200,671,273 1.20%
Nova Scotia $5,034,953,360 30.07%
Ontario $3,549,277,306 21.19%
Quebec $2,423,757,688 14.47%
Grand total $16,746,456,346 100%
Table 3: Project budgets and delivery dates
Vessel Delivery date Budget
Offshore fisheries science vessel (OFSV) 1 June 27, 2019 $687 millions (under review)
OFSV 2 November 29, 2019 $687 millions (under review)
OFSV 3 October 9, 2020 $687 millions (under review)
Joint support ship (JSS) 1 2023 $4.1 billion
JSS 2 2025 $4.1 billion
Offshore oceanographic science vessel (OOSV) 2024 Under review
Arctic and offshore patrol ship (AOPS) 1 July 31, 2020 $4.3 billion
AOPS 2 Spring 2021table 3 note 1 $4.3 billion
AOPS 3 Spring 2022table 3 note 1 $4.3 billion
AOPS 4 Winter 2023table 3 note 1 $4.3 billion
AOPS 5 Winter 2024table 3 note 1 $4.3 billion
AOPS 6 Fall 2024table 3 note 1 $4.3 billion
AOPS 7 Summer 2025 $1.5 billion (estimate)
AOPS 8 Spring 2026 $1.5 billion (estimate)
Canadian surface combatant (CSC) 15 CSCs between 2020s to 2040s $56 billion to $60 billion (estimate)
Multi-purpose vessel (MPV) Up to 16 MPVs starting in late 2020s $14.2 billion (estimate)

Table 3 Notes

Table 3 Note 1

There is an additional 3-month risk due to uncertainty surrounding COVID-19 going forward.

Return to table 3 note 1 referrer

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