Canada’s procurement minister defends shipbuilding plans amid supply chain challenges
The plan is also supporting about 17,000 jobs across Canada's marine industry, according to the government, and resulted in about $1.8 billion per year in economic activity since 2012.
Canada’s procurement minister is defending the federal government’s nearly $100-billion plan to build new coast guard and naval ships as delays, cost overruns and other emerging difficulties raise fresh questions about its long-term viability and worth.
Procurement Minister Filomena Tassi voiced support for the shipbuilding plan at a major arms industry conference on June 2, one day after a Halifax shipyard publicly warned Canada’s new warship fleet could be delayed without additional federal funding.
In a breakfast address to hundreds of industry representatives, military officers and government officials, Tassi said the strategy is starting to deliver much-needed ships to the Royal Canadian Navy and Canadian Coast Guard while creating thousands of jobs.
“This past year, we have had setbacks as all industries have with the fallout from the pandemic,” Tassi added. “Despite this, we continue to make progress.”
Among the ships so far delivered are the first two Arctic patrol vessels for the navy and three fishery science vessels for the coast guard.
The plan is also supporting about 17,000 jobs across Canada’s marine industry, according to the government, and resulted in about $1.8 billion per year in economic activity since 2012.
Yet virtually every remaining vessel is currently behind schedule while the overall cost of the program has skyrocketed since it was launched in earnest more than a decade ago — with even more delays and cost overruns looming.
The minister did not mention Irving Shipbuilding’s request for additional federal funds in her speech, but instead praised the Halifax shipyard and Vancouver-based Seaspan Shipyards for pressing ahead despite the pandemic and other challenges.
She also surprised many by expressing confidence in the government’s talks with Chantier Davie, which have dragged on for more than two years after the Quebec-based shipyard was shortlisted in late 2019 to become the shipbuilding program’s third yard.
“We are making progress on this complex, multi-step process,” she said. “Chantier Davie has proven a valuable partner in the past, and we know they will continue to be an important part of the shipbuilding and ship repair landscape in this country.”
The delay is fuelling fears about the Canadian Coast Guard’s aging fleet, which has lost several ships in recent years and whose icebreaker fleet is on its last legs.
Tassi also confirmed the government is in talks with Irving Shipbuilding about its request for federal funds to upgrade its shipyard, but would not provide further details.
Irving Shipbuilding president Kevin Mooney on June 1 warned the current plan to start cutting steel on the navy’s new warship fleet in mid-2024 is contingent on the company getting additional funding by early next year.
“I can’t get into details in terms of the discussions that are taking place,” Tassi said. “But the discussions have been ongoing. We are monitoring the situation very closely.”
Irving Shipbuilding’s warning is only the latest in a series of challenges to the shipbuilding plan, which was already facing challenges even before the COVID-19 pandemic and skyrocketing inflation threatened additional costs and delays.