The National Shipbuilding Procurement Strategy (NSPS) is delayed and over budget with the federal fleets rusting out faster than they can be replaced. At the end of March this year, five of the largest vessels in the Royal Canadian Navy’s (RCN) fleet will have been sent for scrap, while no replacement vessels have even begun. Delays and cost escalations put not only the overall capabilities of the Canadian Coast Guard and the RCN at stake, but also the longevity of an important industry that has atrophied during boom and bust cycles. The Government continues to make splashy NSPS announcements yet dates continue to be missed, but no one seems is accountable. For example, Seaspan and PSPC continue to announce the JSS ships delivered by 2022, which means that Seaspan will need to deliver six large ships in six years, yet in the first six years of NSPS they have delivered zero. Such apace of shipbuilding productivity has not been achieved in Canada since the Second World War when we had a dozen shipyards building warships.

Over the past two decades, Canada has a history of problematic defence procurement projects (Sea King helicopters, Iltis ‘jeeps’, submarines) and the NSPS is our most intensive and ambitious yet. The NSPS aims to build new naval and commercial Coast Guard fleets to replace an existing over-age fleet in order to meet the challenges of the 21st century, create a strategic relationship between the government and the NSPS shipyards, and increase that shipyard’s global competitiveness. The NSPS cannot be a rigid program that it does not allow innovation between the government and industry to change its course after unforeseen circumstances. The NSPS has not fostered a strengthened relationship between the two parties. Only a few years in, the NSPS needs to be revitalized, and it can be. It will take innovation, injecting competition into the process and adopting initiatives proposed by other industry providers who can add needed capacity in order to meet the growing demands on the fleet replacement procurement model. It also means that the Canadian government will have to take measures to improve the NSPS processes and also to strengthen the current relationship with the shipbuilding industry.

Full Report (pdf)…


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