In an announcement that promises to keep Canadian shipyards busy for a quarter-century, the national government in June said it plans to spend $33.8 billion to build new icebreakers, supply ships and other vessels.
The national ship procurement strategy is part of a long-term maritime plan that asserts Canada’s sovereignty claims in the Arctic Ocean and Northwest Passage. Ottawa said it will spend CAD $35 billion on new vessels over the next 30 years.
The government announced in 2007 that it intended to build up to eight Polar Class 5 Arctic Offshore Patrol Ships — armed 319-foot, 6,372-ton vessels capable of breaking ice over three-feet thick.
Shipyards are thrilled at the prospect of staying busy for decades.
“We could have significant employment in the industry and supply for 25 to 30 years. It is a very good opportunity,” said Peter Cairns, president of the Shipbuilding Association of Canada.
“There is the whole issue of marine security, northern sovereignty and security on the high seas,” he said. “There is piracy now that we didn’t have 25 years ago. There is a lot of tasking for Navy and Coast Guard, so it all has to do with an aggregate. All these things are factored into the decision, I believe.”
The big prize will be two large projects that will be assigned to two of the shipyards that win the bidding process. One yard will work on combatant vessels (navy icebreakers), and the other non-combatant vessels (new supply ships).
“What they are doing is looking for two shipyards,” Cairns said. “The two will have to qualify in the qualification process. Anyone who thinks they have capability will enter into the competition.”
For the supply-ship construction, Davie Yards Inc. in Quebec may be favored due to its size. The Washington Marine Group, which owns both Vancouver Shipyards and Vancouver Drydock in North Vancouver, British Columbia, and Irving Shipbuilding Inc. in Halifax, Nova Scotia, are expected to be the main contenders for icebreaker construction.
Canada’s bold plan contrasts with the United States, where budget-deficit cutting threatens capital spending even while the nation’s icebreaker fleet is aging.
The U.S. has three polar icebreakers, only two of which are heavy icebreakers, and both are over 30 years old. One of the ships, Polar Star, is undergoing an overhaul to return it to operational readiness. In June, the U.S. Coast Guard said a major engine casualty has sidelined the 33-year-old cutter Polar Sea for the remainder of 2010.
In February, then-commandant Adm. Thad Allen said that without new ships to replace aging assets, the Coast Guard would be a “hollow fleet.” Extending the service life of the existing cutters in the fleet is not a viable option, Allen said. A new icebreaker would cost $1 billion.
No funding was included in the 2011 budget request to begin recapitalizing the U.S. icebreaker fleet, according to the American Shipbuilding Association.
In Canada’s plan, the construction of smaller ships will be set aside for competitive procurement. The repair, refit and maintenance of ships in the government fleet will continue to be awarded through competitive tendering. The government says that strategy promotes the regional distribution of work and opportunities to shipyards across the country. Selected shipyards will need to subcontract vast amounts of work to the broader marine industry and suppliers.
George MacPherson, president of the Shipyard General Workers’ Federation in Vancouver, is optimistic, but he says the West Coast industry has to prove it can do the job. MacPherson says that if the Washington Group wins the icebreaker contract, the work will spread around to other yards in B.C.
“If we are successful and are one of the two shipyards that get the contract, I see a very bright future for the industry,” MacPherson said. “It’ll rejuvenate the bulk of the yards. It’ll put some work in Allied Shipbuilders, Victoria Shipyards and Point Hope Maritime in Victoria, and Nanaimo Shipyard.”
The competition will be fierce, he added.
“We think one of the yards will be Davie, in Quebec,” MacPherson said. “The ships we’ll be going after are the navy icebreakers, the ones they call A/OPS.” That stands for Arctic/Offshore Patrol Ships — Canada’s planned armed naval icebreakers.
John Shaw, vice president of Washington Group and chairman of the Pacific Coast Shipbuilders’ Association, said that the association is very pleased the government recognizes the need to renew the Coast Guard and Navy fleets.
“B.C. shipyards will compete very strongly based upon their experience, expertise and capabilities to bring one of the programs to the West Coast,” he said.
On Canada’s East Coast, Steve Durrell, president of Irving Shipbuilding, said his company looks forward to participating in the process to select two Canadian Centres of Shipbuilding Excellence.
“This is what we’ve been working toward and we are definitely ready to compete,” Durrell said.