Workers construct components of the Arctic offshore patrol ships at the Irving shipbuilding facility in Halifax on Friday, March 4, 2016.Andrew Vaughan/The Canadian Press
Canada's largest shipbuilding companies have been meeting with the Liberal government to flesh out and affirm support for the former Conservative government's $38-billion national shipbuilding strategy as a special cabinet committee reviews parts of the program for costs and timelines.
The committee is looking at the more expensive warship component of the strategy, involving a $26-billion contract with J.D. Irving Ltd.'s shipbuilding division, as the bureaucracy has proposed going outside Canada to purchase "off-the-shelf" designs. Discussions about the civilian side of the shipbuilding strategy are also continuing, though a federal official said the program's $8-billion contract for non-combat ships is not facing a similar review.
Given the stakes, companies are as much trying to gain information from the government, as offer it, after the shipbuilding strategy has been criticized for delays and increased costs.
Halifax-based Irving Shipbuilding has reported meetings with a number of senior bureaucrats, while Vancouver-based Seaspan, contracted to build the non-combat vessels, has reported discussions with Public Services and Procurement Minister Judy Foote and the Prime Minister's Office, according to the federal lobbyist registry.
Senior government officials met with shipbuilding-industry players at the end of February to propose that off-the-shelf warship designs be purchased internationally instead of made from scratch, indicating that Irving Shipbuilding, the prime contractor for building and designing the warships, would subcontract out the design component.
Scott Jamieson, vice-president of programs for Irving Shipbuilding, suggested in an e-mail statement that the company will work with the government's proposed changes.
"We will work closely with the Government of Canada to ensure the right foundations for the Canadian Surface Combatant (CSC) Program are in place, doing our part to support efforts to strengthen capacity for our men and women in uniform," Mr. Jamieson said. He said government engagement on a "refined" procurement strategy "presents an opportunity for Canada to acquire the right ships for the right price, delivered in a timely manner. Irving Shipbuilding supports the government in their active engagement with industry on this matter."
Prime Minister Justin Trudeau has established a special ad hoc committee on defence procurement, chaired by Natural Resources Minister Jim Carr, which is reviewing major military procurement programs including the former Conservative government's national shipbuilding procurement strategy and the replacement of Canada's CF-18 fighter jets. The Liberal platform had pledged to lower the price tag for CF-18 replacements and put those savings into procurement for the Navy.
The cost of both the civilian and combat vessels has been rising, with Vice-Admiral Mark Norman, commander of the Royal Canadian Navy, saying last year that the warships will be over their $26-billion budget.
Jessica Kingsbury, a spokeswoman for the Department of Public Services and Procurement, formerly Public Works, said in an e-mail that the changes to the warship program could "enable us to start construction of the CSC sooner." She said the proposed changes would "simplify the procurement and reduce the level of custom design required while maintaining all of the project objectives … [They would] allow one competitive process to be used to select an existing warship design and the combat systems integrator that comes with it, rather than having two separate processes, as was previously contemplated."
Since December, officials with Seaspan's Vancouver Shipyards have reported discussions with PMO policy adviser Patrick Travers; Coast Guard Commissioner Jody Thomas; staff to Public Safety Minister Ralph Goodale; and MPs, according to the federal lobbyist registry. Irving officials have met with staff to Fisheries and Coast Guard Minister Hunter Tootoo; John Knubley, deputy minister of the Department of Innovation and Economic Development; George Da Pont, deputy minister of the Department of Public Services and Procurement; as well as senior officials with the Department of Defence.
Brian Carter, president of Seaspan Shipyards, said nothing suggests the contracts on the civilian side of the program will be changed and that the Liberals remain fully committed to the program.
"Reviewing the shipbuilding strategy from the standpoint of understanding it, seeing how to improve it, I applaud that," he said. "We look forward to working with them to make incremental improvements to the strategy. But I'll tell you, it's set up to deliver exactly what it's meant to deliver, so there's not much to fix in my opinion."
While the Shipbuilding Association of Canada has criticized the program for delays and called for opening it up to more shipyards, Mr. Carter said neither Irving nor Seaspan are members of the group.
On Nov. 30, the new Liberal government awarded Chantier Davie in Quebec a $700-million contract to provide an interim navy supply ship until new ships are delivered. Davie hasn't reported any lobbying meetings in the past six months. The company's lobbying registration, last updated in February, says it is looking at business opportunities as the shipbuilding strategy is implemented.
Mr. Carter said the national shipbuilding strategy is providing long-term economic benefits at a critical time that break the sector out of a "boom and bust" cycle.
"The shipbuilding industry, historically, has been very boom and bust in Canada. The government needs some ships, they build them, and then the industry goes quiet for 20 or 30 years, and then they come back. The procurement strategy is solving that," Mr. Carter said. "I know there's a lot of discussion on, 'Oh we should accelerate this and we should accelerate that,' but changes to the national shipbuilding procurement strategy are just going to put it back into that boom and bust cycle."