NSPS - The Opportunity of a Generation

Canada’s new naval and coast guard shipbuilding program is the opportunity of a generation to create a dynamic, national high-technology industry sector. ­Billions of dollars will be spent over decades, to build dozens of ships in ­Canadian yards on both coasts – and the economic rewards will be widely distributed in the form of regional benefits.

Sydney, Nova Scotia (9 March) – Greg Kerr, MP for West-Nova (centre), participated in an information session for local businesses looking to capitalize on the $33-billion federal shipbuilding initiative. Joining MP Kerr for the session that involved presentations by the Atlantic Canada Opportunities Agency, Irving Shipbuilding Inc. and Enterprise Cape Breton Corporation were John Lynn, CEO of Enterprise Cape Breton Corporation (left) and Dave MacLean, Principal of the Nova Scotia Community College, Marconi Campus in Sydney.

Executed with efficiency and diligence, the National Shipbuilding Procurement Strategy (NSPS) will deliver a new generation of vessels at a reasonable price to the taxpayer. With excellence and imagination, however, the NSPS will deliver an enduring national industry that ends the boom-and-bust shipbuilding cycle, and creates and supports businesses that are internationally competitive within their chosen markets.

There are, of course, obstacles to achieving those goals, but they can be ­overcome – we have done it before. In two world wars, Canada became a shipbuilding power. During the Cold War, Canadian shipyards stepped up to build the Tribal Class destroyers, and later, as the end of the submarine threat lessened the anti-submarine role, they converted the ships to include an air defence capability.

Under the Canadian Patrol Frigate (CPF) program, Canada commissioned 12 world-class Halifax Class frigates between 1992 and 1996. In the years since, the CPF ships have repaid the taxpayer many times over, carrying the Canadian flag around the world. Perhaps more importantly, they justified the faith and rewarded the risks taken by naval officers, public servants and politicians to build them. They defied those whom Winston Churchill called ‘croakers’, not only to create the program but to support it through the inevitable rough patches experienced by any major defence procurement.

Those frigates are now undergoing refit in Nova Scotia and British Columbia. Lockheed Martin Canada was awarded the contract to integrate and install modernized combat systems that will support the Royal Canadian Navy’s mission until the next generation warship, the Canadian Surface Combatant (CSC), comes into service. Under the 2008 contract re­quirements, Lockheed Martin Canada must procure, install and integrate the modernized combat systems and provide long-term in-service support of the command and control system.

Looking to the future, the new Surface Combatants will epitomize the agility, speed, power and reach of the Canadian navy. If past performance holds true, this new generation of warship will keep Canada at the forefront of innovation, give our sailors pride of place among other nations, and earn our government a leading role in international decision-making.

As the most visible and important component of the renewed Royal Canadian Navy, the design of the CSC program is an opportunity for the government to indicate its confidence in the ability of Canadian industry to assemble and deploy the resources necessary to build and equip these ships.

The greatest industrial opportunity of the NSPS may lie in the electronic systems that will give the Surface Combatant fleet its ears, eyes and intelligence. Design and integration of the communication, sensor and weapons systems on these warships calls for the most advanced research and development now, and a depth of support far into the future.

The ships themselves will last for three decades or more, and undergo periodic major ‘refreshes’ like that being done now on the frigate fleet. The pace of technological change dictates that the maintenance and upgrading of the electronics systems aboard the CSC ships will be almost continuous. The amount spent on keeping any military fleet current, far exceeds its purchase price, thus, the employment created by sustaining programs is long-term and high-value.

High tech products created by Canadian companies for the CPF program are still supporting domestic employment through sales to navies around the world. Clearly, major defence procurements can, and should, create the benefit of high-technology employment.

Long ago, Canada, like many other nations of its relative size and strength, exited the field of propulsion weapons ­systems, but our inability to compete in those markets has not affected our ability to compete in other, niche maritime markets – the success of dozens of Canadian manufacturers proves it. The CPF program demonstrated beyond any doubt that early stage support for specialized Canadian manufacturers pays off.

In recent years, under the pressure of combat in Afghanistan, the Canadian military acquired and fielded equipment in months rather than years. People at every choke point of the procurement system responded brilliantly to the challenge as artillery, land vehicles, aircraft and UAVs were all deployed within very short time periods. That simply cannot be done with naval vessels. The uniqueness of each ship type, and the levels of technical complexity within each design means that they do not come into existence simply as the products of a supply chain, but rather as the endpoint and raison d’etre of an entire industry.

If Canada is to build its naval and coast guard ships domestically – and that political decision has indeed been made – then it must step up to the responsibilities of sustaining the businesses that will design, build and sustain  these ships.

Until now, every time a fresh cycle of shipbuilding has started, the Canadian industry has had to first undertake the reconstruction of the necessary physical and intellectual infrastructures. With the National Shipbuilding Procurement Strategy, this country will seize the opportunity to break that cycle and establish shipbuilding as one priority within a defence industrial strategy. To do that, government will need to work to a common purpose, with a much higher degree of communication and cooperation than it has so far demonstrated.

Likewise, Industry, working with government, must find ways to compete as individual businesses and cooperate as a sector, again to a common purpose. The Canadian market is simply not large enough to maintain adversarial relationships between key players.

Looking Ahead
Canada must have a strong and effective navy and coast guard. The alternatives to policing and patrolling our coastlines and economic zones are unacceptable. If we don’t do it, other nations may intervene. Given that it must be done, it should be done intelligently. From one perspective, the Canadian defence industry may divide itself into hardware categories like ground vehicles, aerospace and shipbuilding, but in reality, the true value and growth in military equipment cuts across that system. All platforms now rely on advanced electronic technologies, and air, ground and naval platforms are increasingly interconnected.

The Canadian defence industry needs a vision that recognizes that integration. Across the entire Canadian defence sector, we need stronger and deeper relationships between the larger contractors who can reach global markets and Canadian sub-contractors that can provide energy and innovation. To spur that innovation, the resources of the federal government in research and development should be aimed at making the most of Canadian expertise.

Through the National Shipbuilding Procurement Strategy, Canada can support human resource development in technologically strategic, knowledge-intensive areas and create strong, domestic companies. Successful Canadian companies would continue to support the men and women of the Canadian Forces, and export sales of leading edge products would provide a return to the Canadian taxpayer.

The NSPS program will not only create an enduring shipbuilding industry, it will contribute to a defence industrial strategy that increases the value of every defence dollar to every Canadian.

Janet Thorsteinson is Vice President of Government Relations at the Canadian Association of Defence and Security Industries (CADSI)
© FrontLine Defence 2012