Back to news

December 20, 2019 | Local, Naval

Quebec shipyard selected to be new partner under shipbuilding program - will construct six icebreakers

DAVID PUGLIESE, OTTAWA CITIZEN

The Canadian government announced today that Chantier Davie has been pre-qualified to become the third strategic partner under the National Shipbuilding Strategy. The NSS's third yard will build six program icebreakers for the Canadian Coast Guard. Davie has demonstrated it meets initial requirements related to experience, capability and capacity, as defined in the Invitation to Qualify issued on August 2, the federal government noted.

The NSS is to build ships for the coast guard and Royal Canadian Navy.

Davie operates the largest shipyard in Canada.

Chantier Davie will now move to the next stage in the selection process, the Request for Proposal and evaluation stage, according to Public Services and Procurement Canada. This will include a third-party assessment of the shipyard's infrastructure, submission of a formal proposal, and a due diligence process to ensure the shipyard is financially capable of performing the work and making any necessary upgrades to its infrastructure. This assessment is similar to the process previously undertaken in 2011 to select Irving Shipbuilding Inc. and Seaspan Shipyards as strategic partners under the NSS.

Once the phase is completed, Canadian government will begin negotiations for an umbrella agreement with Davie, which is expected to be put in place in late 2020.

https://ottawacitizen.com/news/national/defence-watch/quebec-shipyard-selected-to-be-new-partner-under-shipbuilding-program-will-construct-six-icebreakers

On the same subject

  • Conservatives promise to 'protect' defence spending from deficit battle

    October 18, 2019 | Local, Aerospace, Naval, Land, C4ISR, Security

    Conservatives promise to 'protect' defence spending from deficit battle

    Defence takes a fifth of the federal budget and has often been a target for deficit cutters Murray Brewster The Conservatives have pledged to "protect" the budget of the Department of National Defence even as they work to eliminate the federal deficit. In their election platform, the Tories said they would find $5 billion in savings by cutting operational expenses, but were not clear on precisely what that meant, other than to say it would not affect services to Canadians. The Liberals, through their two-year-old defence policy, committed to increase defence spending by 70 per cent to $32 billion annually by 2024-25 — a program that would unfold at precisely the same time a potential Conservative government intends to cut expenditures.​​ The Liberals have also set in motion plans to buy two of the military's biggest-ticket items — new fighter jets and navy frigates. Conservative leader Andrew Scheer said Wednesday his party would stick with those purchases, but would be more efficient. "We are committed to the funding allocated to the Department of National Defence," he said during a campaign stop in in southwestern Ontario. "We will not do what the Liberals did, which is waste hundreds of millions of dollars stopping and starting the procurement process." The Conservatives have pledged to depoliticize the process of buying military equipment and have complained about the Liberal government's delivery timelines and decisions, including the plan to purchase used Australian F-18s to supplement the existing fighter jet force until a decision is made on brand-new warplanes. Says money wasted "They have wasted so much money when it comes to procurement," Scheer said, adding that Conservatives would "protect the budgets of National Defence [and] we're going to ensure that the money that's allocated to National Defence is spent wisely." At least two experts wonder how the Conservatives can live up to that pledge in light of the fact the Defence Department is the single biggest discretionary expense on the federal balance sheet and the last two times Conservatives — or Liberals — tried to balance the budget, military spending took major hits. Under the government of former prime minister Stephen Harper, the defence budget was cut by $2.1 billion annually and the department racked up sizeable chunks of lapsed spending, money that was appropriated by Parliament, but not spent. The reduction took place after the Afghan war and the department faced concurrent spending cuts through the Conservative strategy review and deficit reduction action plan. Both Liberal and Conservative governments in the 1990s cut defence spending and postponed buying new equipment, most notably new maritime helicopters, which only came into service in the last few years Defence spending an obvious target "Balancing a federal budget without looking at defence spending is extraordinarily difficult, to impossible," said Dave Perry, an analyst and expert in defence spending at the Canadian Global Affairs Institute. "Defence spending accounts for one-fifth of the federal budget." And even if the Conservatives did look for savings, a change to the accounting structure at Defence leaves little room for them to recoup much money by cancelling or postponing equipment purchases. Reducing the size of the military or the civil service was something previous governments did, but Perry said those kinds of cuts "take two years or more" to make their way through the system. Kevin Page, the former parliamentary budget officer and CEO of the Institute of Fiscal Studies and Democracy, said much of what all of the parties are proposing — and their ability to deliver — is contingent on the kind of Parliament that is elected on Monday. CANADA VOTES How much will the defence file matter to voters? PBO pushes up cost estimate for Canada's frigate build by $8 billion In a minority government scenario, the Conservatives might find themselves struggling to deliver savings outside of the Defence Department, he suggested. Would need majority "If elected, I would assume the Conservatives would need a majority government to push through the savings on direct program spending – infrastructure, wage bills, other operations, corporate and development assistance," Page said. The Liberal record on defence spending is up for debate. An internal DND slide presentation, obtained by CBC News, lays out projections for the department going to up to the 2036-37 fiscal year. Faced with extraordinary pressure from the Trump administration to meet NATO's goal of earmarking two per cent of gross domestic product for military spending, the Liberal government committed to a 70 per cent increase by 2024-25. The Feb. 25, 2019 slide presentation shows that spending will peak in 2026-27 and begin to fall again in the preceding decade. Used Australian fighter jets could cost $1.1B: Parliamentary budget officer The document also shows that, for two years running, the Liberals have not spent as much as they planned on new equipment. While $12.7 billion was set aside in their plan between 2017-19 for new military gear, the Trudeau government only asked Parliament for permission to spend $8.34 billion — leaving $4.4 billion still in the treasury. The slide presentation said part of the reason is that some existing projects came in under budget, but in one-third of the instances the spending delay was because the Defence Department — or the federal government in general — could not get the projects organized. https://www.cbc.ca/news/politics/conservatives-defence-spending-1.5323618

  • Canada to purchase 25 used Australian F-18 jets if U.S. gives approval

    June 18, 2018 | Local, Aerospace

    Canada to purchase 25 used Australian F-18 jets if U.S. gives approval

    David Pugliese, Ottawa Citizen The Liberals had originally announced they would buy 18 used Australian jets to augment Canada's CF-18s. The extra aircraft will likely be stripped down for parts Canada has boosted the number of used Australian fighter jets it is purchasing to 25, but the deal still hinges on approval from the U.S. government. The Liberal government originally announced it would buy 18 used Australian F-18 jets to augment the Royal Canadian Air Force's CF-18s until new aircraft can be purchased in the coming years. It has added seven more aircraft to the deal, Dan Blouin, a spokesman for the Department of National Defence, confirmed Friday. Those extra aircraft will likely be stripped down for parts. It is not known yet if the seven aircraft will be flown to Canada or shipped, Blouin added. The exact cost of the aircraft, along with weapons and other equipment, is not yet known as negotiations are still underway, Procurement Minister Carla Qualtrough recently told journalists. The Liberal government has set aside up to $500 million for the project and that would cover the seven added jets. An Australian Senate hearing was recently told that Canada was presented with a cost proposal last year. “They accepted our offer in December, but they have also put in a further request for some seven aircraft for system testing, training and spares,” Australian Air Vice Marshal Cath Roberts told the hearing. The U.S. government is examining the deal and will have to give its approval before Australia can sell the F-18s to Canada, because the F-18s were built in the U.S. with American technology. Canada is hoping for the U.S. approval sometime in the summer. Although U.S.-Canada relations have hit a slump, with President Donald Trump vowing to punish Canadians over economic disputes, the DND does not expect that to affect approval of the fighter jet deal. Pat Finn, DND's assistant deputy minister of materiel, has said he expects a deal by the end of the year with deliveries of the Australian planes to begin in the summer of 2019. The government originally planned for the arrival of the first used aircraft next January. The government had originally planned to buy 18 new Super Hornet fighter jets from U.S. aerospace giant Boeing. But, last year, Boeing complained to the U.S. Commerce Department that Canadian subsidies for Quebec-based Bombardier allowed it to sell its C-series civilian passenger aircraft in the U.S. at cut-rate prices. As a result, the Trump administration brought in a tariff of almost 300 per cent against the Bombardier aircraft sold in the U.S. In retaliation, Canada cancelled the deal to buy the 18 Super Hornets. That project would have cost more than US$5 billion. In the meantime, the federal government expects to issue next year a request for proposals from aerospace firms who want to take part in the competition to provide Canada with 88 new fighter jets. That project, with a $19 billion price-tag, would see the purchase of a new fleet of planes that would replace both the CF-18s and the used Australian jets.A winning bidder is expected to be selected in spring 2021 and the first of the new aircraft would be delivered four years later. The last CF-18 will be retired in 2032. http://nationalpost.com/news/politics/canada-to-purchase-25-used-australian-fighter-jets-if-states-says-yes

  • Chantier Davie won’t take ‘no’ for an answer

    December 1, 2017 | Local, Naval

    Chantier Davie won’t take ‘no’ for an answer

    By Kevin Dougherty. Published on Dec 1, 2017 10:46am QUEBEC – Chantier Davie in Lévis, across the St. Lawrence from Quebec City, will be forced to lay off 800 shipyard workers before Christmas without a new contract to build a second supply vessel for the Canadian navy. “We're not taking no for an answer on that,” Davie CEO Alex Vicefield said in a telephone interview on Thursday, after Defence Minister Harjit Singh Sajjan told Le Journal de Québec last week through his press attaché that the government does not plan to buy a second supply ship. In an email response Thursday, Sajjan's press attaché Bryne Furlong reiterated that, “Navy and Coast Guard supply requirements have been extensively studied and are subject to long-term planning, which does not include a second supply vessel‎.” The layoffs have begun, now that the Davie workforce has completed — on time and on budget — conversion of the German-built container ship Asterix into a supply ship to deliver fuel, water, food and supplies to the ships of the Royal Canadian Navy. Davie's plan now is the $600 million conversion of the Obelix, a sister ship to the Asterix, into the navy's second supply ship. Vicefield said Ottawa's plan calls for paying $2 billion each for two new supply vessels, the first of which will only be available 10 years from now. “Why do we need to build these ships for $2 billion each?” Vicefield asked, noting the Asterix and Obelix cost $600 million each and are superior vessels. “I'm not a political activist but we believe in the project and we delivered,” Vicefield said. In 2011, the Harper government unveiled its National Shipbuilding Procurement Program, awarding $38-billion in contracts to build ships for the Navy and Coast Guard to Irving Shipbuilding Inc. of Halifax and Seaspan Shipbuilding of Vancouver. Davie, emerging from bankruptcy at the time, is Canada's largest shipyard and was excluded. Cost estimates have risen since then, Vicefield noted, with the cost ballooning to over $100 billion. And in the six years since the plan was announced, the two winning shipyards have delivered no ships. Officially, Seaspan is to launch its first replacement supply ship in 2021. But Vicefield noted that Andy Smith, the official responsible for shipbuilding in the federal department of fisheries and oceans, told a Commons committee Nov. 7 that Seaspan has a backlog of three ships to build before work on the first supply ship can begin in 2023, for delivery in 2027. Vicefield said that in spite of granting the lion's share of shipbuilding contracts to Halifax, the Conservatives where shut out in Atlantic Canada in the 2015 election, and Steven Blaney, the Conservative MP representing Lévis, was re-elected even though Davie was excluded from the National Shipbuilding Procurement Strategy. “The key point here is that shipbuilding contracts do not win votes,” Vicefield said. “But major procurement scandals bring down governments. “If I was in government, I would be worried about a major procurement scandal, where you are spending five, six times the cost to buy a ship than any other country in the world pays and nothing is being delivered.” The Asterix is also a hospital ship and can deliver humanitarian aid in the event of major natural disasters, such as a tsunami or a devastating hurricane. Davie stepped into the breach in 2014, when the navy's two existing supply ships were scrapped and plans by Seaspan to build two replacement supply ships were a distant prospect. The Harper government granted Davie a contract to convert the Asterix into a supply ship for about $600 million as a private-public partnership, with Davie managing the project from stem to stern, its financing, as well as providing its civilian crew and leasing the ship to the federal government for five years. When Justin Trudeau led his Liberals to power in 2015, Irving Shipbuilding leaned on Liberal ministers from the Maritimes to have the contract cancelled. But the work was underway and Ottawa did not block the Asterix project. The Halifax-based and crewed Asterix will supply Canadian navy ships off the east coast, while off the west coast Canadian naval vessels will be supplied by Chilean and Spanish navy supply ships. “Why would you do that when you can put the money back into Canada and ensure the jobs of 800 people here for another two years?” Vicefield said. “It makes no sense.” Vicefield regards the Harper government's plans, renamed by the Liberal government as the National Shipbuilding Strategy, as “mind-boggling” and “a bit of a joke.” And he believes Canada can have three shipyards, including Davie, to build and maintain naval and Coast Guard vessels. “There are about 50 large ships that need replacing,” he said, noting the average age of the Coast Guard fleet is 40 years. “So there is enough work for sure for three shipyards for the next 30 years.” “We haven't been pushing against the National Shipbuilding Strategy,” Vicefield said. “I think it is going to fall on its own.” Irving, which is now building ships in Romania, and Seaspan, which has ordered two ferries to be built in Turkey, are defending the plan, and so far have political support. “They see the writing on the wall,” Vicefield said. “They want to destroy the competition. They see that now they have the upper hand. “But we're not going to let that happen,” he insists. “We're convinced the new government, the Liberals, will actually see sense. “But it is taking time for them to get their feet under the desk.” https://ipolitics.ca/article/chantier-davie-wont-take-no-answer/

All news