Shipbuilding Shambles: There is no 'Plan B'

About a year ago, I wrote an article in Frontline entitled “The National Shipbuilding Shambles”, asserting that Canada’s National Shipbuilding Strategy (NSS) is failing the country’s needs and should be scrapped.

The fundamental problems I identified were that the NSS is not delivering ships in a timely manner, and is incurring costs that are outrageous in comparison with almost any other country.

I received a great deal of feedback from private and public sector stakeholders, the majority of which was supportive, yet the practical effect has been... zero. Now midway through 2023, we are basically “another year older and deeper in debt”, in the words of the old song. A set of vested political and corporate interests continue to take precedence over the increasingly urgent needs of the Navy, and the Coast Guard to rebuild strong maritime capabilities for Canada.

Over the past year, the NSS has gone increasingly radio silent. The parties involved seem to realize that if there is nothing good to say, it’s better to say nothing at all. The annual reports on NSS have been delayed and are becoming less and less detailed – in fact, the most current report available is from 2021.

News releases from the NSS shipyards have been rare and uninformative. The attachment of the final block of the first Joint Support Ship in Vancouver Shipyard in January 2023 was celebrated as being a milestone for Canada’s longest warship, with no apparent sense of irony; JSS is certainly taking years longer to build than the Canadian Patrol Frigate, at least 13 compared with 9 years from contract award to delivery. Information on the Canadian Surface Combatant project (CSC) – just doesn’t exist.

There seems to be a broad recognition within Navy circles that the situation is not sustainable. Money is being pumped into the patrol frigates to keep them acceptably seaworthy, but they will not survive as viable combat assets until the Canadian Surface Combatant project (CSC) is available. Also, the CSC will not be affordable in sufficient numbers to provide enough hulls in the water to support operations worldwide. This is widely recognized in naval circles, but there does not appear to be a Plan B to mitigate the risk to the Navy’s basic viability.

I did not focus on CSC in my previous article, because so little real information on the program was available. That situation is no better today, but the urgency is.

The CSC contract was awarded in early 2019. In October 2022, Lockheed Martin revealed at the Euronaval trade show that the Preliminary Design Review (PDR) was scheduled for completion by the end of 2022. This was well behind the schedule that was required under the CSC request for proposals, yet the public has never been told if the PDR has in fact been completed, what its outcome has been, or what form of cost estimates accompanied the review.

Meanwhile, across the Great Lakes, construction of the first Constellation Class frigate for the U.S. is already under way. The contract was awarded in 2020, and has already overtaken CSC. USS Constellation is projected for delivery in 2026, while the CSC delivery date remains unknown.

Cost for a Constellation Class ship is around U$1 billion, while the guesstimated CSC cost per ship appears to be hovering around C$5 billion.

Fincantieri, the builder of Constellation, is close to completing a major rebuild of its shipyard to allow for efficient construction of the 10 ships in the initial flight, while in Canada, Irving and the government remain in negotiations over who will pay for the shipyard upgrades needed to build the CSC.

None of these comparisons are flattering to Canada, and none give any encouragement for the future of the CSC program on its current trajectory.

Turning to the Canadian Coast Guard side of NSS, the picture is not much brighter. In 2019, the government announced that Chantier Davie would be added to the NSS as a third shipyard participating on CCG projects. It took until April 2023 for an umbrella agreement to be signed, and no actual work has been awarded as yet.

Meanwhile, the notional delivery dates for projects under way at Seaspan continue to slip. The consequence of these delays is that an increasing number of CCG vessels are being forced into increasingly expensive Vessel Life Extensions (VLEs). There can be no doubt that these NSS components are ‘good work’ for the successful repair yards, but dubiously cost-effective for the Canadian taxpayer.

The VLEs also do not bring the ships up to current standards for environmental protection or other performance considerations. Many involve re-engining old ships with new equipment that does not meet Tier III standards for NOx emissions; the ballast water treatment systems that are now mandated for commercial ships are not being installed due to cost and complexity concerns; none of Canada’s existing icebreakers meet Polar Code standards for keeping fuel off the hull to prevent pollution in the event of ice damage or grounding.

Furthermore, none of these projects will make significant progress towards meeting Canada’s greenhouse gas reduction targets for 2030 and beyond. In all of these regulatory areas, Canada’s approach seems to be “do as I say, not as I do.”

Any reasonable observer must recognize that fundamental changes to NSS are hugely challenging but clearly necessary. We are already moving into a pre-election environment, with the temptation to kick hard decisions down the road and play politics over current problems. However, the state of our Navy and Coast Guard should not be a partisan issue – the country needs both services to protect our security, support our trade, and provide many other essential functions. Stakeholders, including those who are benefitting from the status quo, should aim to convince politicians of all colours that the NSS is unsustainable and that new solutions are required.

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Andrew Kendrick is a naval architect and ocean engineer who has worked in ship design, research, and regulatory development for over 45 years as an engineer, project manager, and company executive. He retired from full-time employment in late 2020, but continues to be active on projects in Canada and internationally, and volunteering for several professional and technical organizations in the marine sector.

Read National Shipbuilding Shambles (Part 1) here: frontline.online/defence/2022/1/10764