Published by Senator Colin Kenny on 08 August 2008
The revelation this week that the Department of National Defence is investigating Dutch shipyards to build ships for the Canadian Forces runs counter to what Canada needs to be doing to resuscitate the navy and economy.
A report from Citizen defence writer David Pugliese said a retired Canadian admiral had been sent to the Netherlands to determine whether the navy's $2.9-billion Joint Support Ship project -- which looks like it will cost more than expected -- could be completed at a lower cost overseas.
This is a strange time in Canada's economic history for the government to be trying to save pennies by manufacturing overseas. Even Canadians who don't comprehend their country's need for a robust military do understand Canada's need to create real industrial jobs -- jobs to replace all the good ones that have evaporated so alarmingly in recent years.
I am convinced that Canada needs to revitalize both its military and its economy. Which is why I would advise any party interested in attracting votes in the next federal election to come up with a new Canadian industrial strategy at least partially based on military production, particularly to meet the needs of the Forces naval arm.
Canadians need good jobs, and our navy needs a healthy Canadian shipbuilding industry because it can't count on foreign countries to deliver ships in times of crisis.
Canadian shipyards will never replace the number of high-income jobs that Canada has been losing in the auto sector and other vulnerable industries. But we could be stimulating many more high-skill shipbuilding jobs while helping to fill the gaping holes that are threatening to turn Canada's navy into a bathtub flotilla.
And with the right strategy, we could turn shipyard employment in this country into something far more stable that the on-again, off-again employment that the shipbuilding industry has traditionally offered in Canada.
The average Canadian probably believes that the only place to do shipbuilding these days is in low-wage countries where metal bending can be done on the cheap. Much of the investment in modern military ships, however, is funnelled into high-tech electronics and engineering, and Canadian companies are quite capable of competing in these sophisticated areas.
First, we need a plan. But before I talk about an industrial plan, let me explain our navy's needs, which, whatever the anti-military crowd likes to think, equate to the needs of all Canadians living in a tumultuous world.
Six days after he was named Canada's new chief of the defence staff, General Walt Natynczyk pronounced that the biggest challenge he faced was procuring big-ticket items for the navy, whose needs have been put on the back-burner with the focus on the army's activities in Afghanistan. "I've got to deliver," said Gen. Natynczyk. "I've got to lay keel for ships."
He surely does.
Canadians should never underestimate the importance of their navy. Asian countries are busy expanding theirs, and Asia is one area of the world where Canada needs to strengthen its influence.
Not only are economies expanding rapidly in Asia, an increasing percentage of Canadians are of Asian heritage. Asia matters to us, and navies matter a lot in the Pacific. If Canada doesn't maintain a healthy naval presence in the Asia-Pacific theatre and other international waters, we are soon going to become a political non-entity on the global scene. We can't afford that as a nation.
The navy should be expanded. The Senate Committee on National Security and Defence has recommended that the number of ships it floats should be doubled to keep pace with the responsibilities the navy will face in a changing world.
But even if it were to tread water at its current size, the navy and Canadian Coast Guard are going to require at least 133 new vessels of a significant size over the next 25 years, as well as refits.
Just to stand still the navy needs to modernize 12 frigates soon and eventually replace them. It needs four new destroyers, eight Arctic-offshore patrol vessels and refits for four submarines.
The Department of Fisheries and Oceans will require at least 83 ships. These include nine icebreakers, 15 medium endurance and offshore patrol vessels and 42 search and rescue lifeboats.
Transport Canada is going to need three marine Atlantic ferries.
That adds up to plenty of skilled manufacturing -- enough to keep shipyards in eastern, central and western Canada going as healthy, cutting-edge operations, with the bigger yards handling all kinds of jobs and the smaller ones specializing in niche production of key components.
Canada has traditionally ordered many of the ships it needs from Canadian shipyards, but it has been a stuttering process. What has been missing is a strategy that assures two key results: that the navy gets the ships it needs at the right time, and that Canadian shipyards get a steady stream of work to retain skilled employees.
Costs matter when it comes to purchasing military equipment -- Canadian taxpayers should not be saddled with huge additional costs to keep the work at home. So if the government is to guarantee a predictable level of work to Canadian shipyards, a regulatory board will need to be created to regulate returns and avoid over-pricing. But there is no reason that an entity such as the National Energy Board or the Canada Radio-television and Telecommunications Commission couldn't be brought into play in the shipbuilding industry.
Guaranteeing a predictable level of work to shipyards would also involve signing a lengthy contract that spanned decades, so one government or another couldn't turn tail on the commitment. That should be doable, as long as review provisions are written in to iron out wrinkles from decade to decade.
If one prescient government were to put this arrangement in place for Canadians, I would wager that no subsequent government would ever dare pull such a valuable economic stimulant apart.
A healthy navy means a healthier Canadian economy. All Canadians need is a little political leadership here, and Canada can have both.
If the retired admiral scouting Dutch shipyards is just looking for good design options to be built in Canada, fine. But if he is looking for places other than Canada to build Canadian military ships, he is doing both the navy and the economy a huge disservice.
Colin Kenny is chair of the Senate Committee on National Security and Defence