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These are long-term agreements that define the relationship between the Government of Canada and the shipyards for the next 20 to 30 years and set the parameters for the negotiation of ensuing contracts.

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Over the past five years, Halifax Shipyard and Vancouver Shipyards have been actively engaged in the process of upgrading, expanding and preparing their facilities for production. Great efforts have also been invested by the two companies in the recruitment of skilled workers and the expansion of their workforces.


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Irving Shipbuilding and Seaspan both told the Committee that they have made arrangements with local technical colleges and universities to train their workforces. They have also set up special training programs within their own facilities to train workers in specialized trades.


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As a result of these above-mentioned investments in infrastructure and personnel, Halifax Shipyard and Vancouver Shipyards commenced construction of the first ships to be built under the NSS large-ship construction program in The NSS is contributing to the resurgence of the shipbuilding and marine industry in Canada and providing work to businesses from coast to coast. This figure does not include estimated through-life costs associated to the small-ship construction program and to the ship repair, refit and maintenance program of the NSS over the same time period.

Many witnesses who appeared before the Committee in the course of this study spoke of the NSS as a sound plan to recapitalize the RCN and CCG fleets and to revitalize the Canadian shipbuilding and marine industry. They believed that the federal government should stay the course with the NSS. Similar points of view were expressed by other witnesses. In his view, Canada needs to maintain course with the strategy, regardless of the time it takes.

Many witnesses believed that the NSS could be improved.

All of the RCN ship projects covered under the large-ship construction program of the NSS have been plagued with delays over the years. Fraser, in particular, referred to the Joint Support Ships project as a case in point. The new program now called for two ships with an option for a third.

The first ship was originally scheduled to be delivered in with project completion by Each of the RCN ship projects have also faced cost overruns over the years. Cost overruns and delays have also been encountered with CCG ship projects, as Mr. Fraser told the Committee. It should be noted that the costs of most of the large-ship projects of the NSS are currently under review by PSPC and are expected to be increased in the near future.

It is also important to note that there is no international standard for costing naval ships, making it hard to adequately compare naval shipbuilding costs in Canada with those in other countries. Many of the witnesses heard in the course of this study believed that the RCN and CCG may not be able to purchase all of the ships they require for their future fleets if current naval procurement budgets are not increased.

Other witnesses shared Mr. He pointed out that this was actually less than the number of major surface combatants that the RCN possessed at the dawn of the 21 st century, which was 16 4 Iroquois class destroyers and 12 Halifax class frigates. They believe that the RCN requires a minimum of 15 to replace its destroyers and frigates and the federal government should stand ready to pay the bill. However, regardless of the outcome, witnesses agreed that there should be better communication with the Canadian public about progress made with the NSS and how shipbuilding costs really function.

Boutilier explained. Joint Support Ships were available has generated an important at-sea replenishment capability gap within the Navy. The original engines will be kept in the ship. The numbers vary from months to month, according to the work being done. Converting commercial vessels for naval operations is not new.

The government doesn't pay us a dollar for the ship until we deliver it. We've privately financed the actual delivery of the ship, and then we will lease it to the government. If such a case were to transpire, Mr.

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The Navy expects to start deploying the Resolve class interim AOR on naval operations by the end of According to Mr. Notwithstanding these efforts, some witnesses indicated that they would like to see further progress made with the Canadian Surface Combatants project in particular, the most expensive and most complex listed in the NSS. While most witnesses agreed that the Canadian Surface Combatants project needs to be expedited, a number of witnesses commented on the type of capabilities that those warships will need to have.

According to Vice-Admiral Retired Drew Robertson, these warships will need to be at the cutting-edge of naval technology. Let's make sure they're good, well-equipped, high-technology surface combatants that can participate in combat situations in 20 or 30 years.

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Don't compromise on these vessels. As Stephen Burt pointed out, China, Russia and other potentially hostile nations are known to possess cyber capabilities that can affect warships at sea, and those capabilities will probably be more sophisticated in the future. In his view, it will be imperative that the systems aboard the Canadian Surface Combatants be as resilient as possible and that the ship be capable of defending itself against cyber-attacks. As Commander Retired Ken Hansen explained, because producing a sophisticated, state-of-the-art warship will be costly, difficult choices will have to be made in the coming years with regard to certain new and emerging technologies and whether or not they should be embedded in the design.

The cost of these things is so prohibitively high that they cannot be afforded as a common standard of capability. Still, Commander Retired Hansen would like to see the following key capabilities imbedded in the Canadian Surface Combatants:. In his view, modularity results in cost savings and represents the future in warship design and construction. They are able to cut costs quite significantly … and [achieve] flexibility. In order to accelerate delivery, Michael Byers and other witnesses encouraged the federal government to make the procurement process less complicated, and reduce costs by pursuing off-the-shelf solutions.

That's how you get money out the door. For his part, David Perry urged caution, arguing that there is no such thing as off-the-shelf in the realm of warships:. The federal government remains committed to the NSS and is trying to improve it. One area in need of improvement, the Committee was told, has to do with predictability and stability in funding for NSS projects. In his view, there needs to be more predictability and stability in funding. In his view, Canada should reconsider how it costs naval projects. Another area of improvement would be to transform the NSS into a continuous shipbuilding program that provides work to the Canadian shipbuilding and marine industry well beyond the s and s.

Witnesses pointed to the fact that all of the NSS ships will need to be eventually replaced, so the sooner the federal government and industry start thinking about those future projects, the better prepared they will be when the time comes to build those replacement vessels. It would also keep the shipbuilding industry busy with a continuous flow of federal government work. Robert Huebert explained the advantage of having a constant and ongoing shipbuilding strategy as follow:. According to several witnesses, the main problem with the NSS is that it lacks shipbuilding capacity.

At the moment, only two shipyards have been selected to deliver the large-ship construction program of the NSS. However, some witnesses believed that having a third shipyard involved in that program would be beneficial from a production standpoint.

According to John Schmidt of FFS, there is spare capacity within the Canadian shipbuilding industry that could be used for future NSS work or other shipbuilding projects. Davie employs about 1, people and has CVs from another 2, people, many of them skilled workers with 10 to 30 years of shipbuilding experience. The CCG, for example, will need to replace its icebreaker fleet in the coming years and Davie has expressed interest in producing such vessels. Many witnesses also pointed to the need to improve decision-making and accountability.

There are too many decision-makers, they implied, and this, as a result, is slowing down the process. Many witnesses stated that centralizing the defence procurement in Canada under a single point of accountability a single government organization led by a single minister accountable to Parliament would be helpful in many respects. In particular, such centralization would speed up the decision-making process and ensure greater accountability for individual defence procurement projects, especially those to be built in the coming years under the NSS. Such is the case in Australia, France and the U.

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However, Mr. Jennings noted that at the political level, the Minister for Defence shares responsibility for defence procurement and defence industrial policies with the Minister for Defence Industry. Both of those ministers, Mr. It need be told that Canada is no stranger to defence procurement centralization. In fact, defence procurement was centralized under a single federal government department for most of the s to s, first through the Department of Munitions and Supply and then the Department of Defence Production.

Canada might want to revisit those past models and consider whether the decision taken in the s to adopt a multi-departmental model is still relevant in the 21st century. Now when the thing goes down the tubes, everyone looks around for who's responsible. Michael Byers agreed, suggesting that defence procurement be centralized under the DND and made the sole responsibility of the Minister of National Defence.

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According to David Perry, we need to regard defence procurement differently from the rest of federal government procurement. Emphasis was placed on boosting the defence budget and increasing naval spending, investing in submarines, developing new naval capabilities, enhancing Arctic and maritime domain awareness and control capabilities, and fostering a strong shipbuilding industry in Canada.

Several witnesses believed that Canada should be spending more money on defence and strive to reach the NATO target of 2. Several witnesses pointed to the fact that Australia, a country significantly smaller than Canada with about one third less population, has increased its defence budget to almost 2.