Jane’s Navy International

 

June 2011

 

Title: Canada’s navy set for $35 billion overall

Sub-title:  Its aging fleet of destroyers and frigates, which has been forced to defend one of the world’s most imposing coastlines, will almost entirely be replaced.

 

Canadian shipyards are competing frantically to meet the July 7th deadline for applicants to begin providing backbone construction for an expected $35 billion in naval and coast guard procurements during coming years.

 

Four yards, including Vancouver’s Seaspan Operations, New Brunswick’s Irving Shipbuilding, Quebec’s Davie Yards and Ontario’s Seaway Marine and Industrial, are expected to submit bids for a program that will eventually supply more than 30 new ships, ranging from frigates, to supply ships, patrol boats and icebreakers.

 

Two yards will be selected, one to produce large ships including arctic patrol ships, joint support ships and Canadian surface combatants, and the second to produce smaller vessels such as tugboats, search and rescue lifeboats and so on.

 

Defending the world’s longest coastline

Canada’s navy faces daunting challenges in coming years. Its 243,000 kilometre coastline is the world’s longest. Much of it runs around the potentially resource-rich Arctic region, which due to global warming, may one day open to global commercial traffic. The Canadian navy is also involved in the Libya conflict through its deployment of the frigate HMCS Charlottetown in support of Operation Mobile, and regularly participates in global patrols as well as NATO counter-piracy and counter terrorism operations.

 

However while Canada’s naval personnel have by all accounts performed exceptionally well, they have been doing so with increasingly ageing equipment notes Brian MacDonald, an analyst with the Conference of Defence Associations. The country’s four Iroquois-class guided missile destroyers date back to the 1970s and its Protecteur class Auxiliary Oiler Replenishment supply ships to the 1960s and 1970s. As if that weren’t enough, the country’s newer combatant vessels, the upgraded Halifax class frigates were commissioned in the early 1990s and, even with the upgrades, only have another 10 or 15 years of useful life left in them.

 

“The maximum life expectancy of most of those ships is about 25 years,” says MacDonald. “So replacing them is long over due.”

 

Majority bodes well for procurement initiatives

The good news is that indications are that after eons of talk that just may happen. In fact, the country’s National Shipbuilding Procurement Strategy (NSPS), announced last year, got a major boost last month, with Prime Minister Stephen Harper’s Conservative Party of Canada’s majority government win.

 

While the Tories had gradually been boosting defence financing during the past five years, their minority position hampered efforts due to their constant need to get approval from at least one of the three other parties to get budgets passed. The result was that many previously announced programs, such as the Joint Support Ships initiative either faced repeated delays or never got off the ground.

 

Canadian military purchases, as in many countries, are not merely a defence matter, but a political one as well. As a result, a complex procurement structure has evolved to satisfy the range of players and interest groups lining up to get in any new deal. These range from bureaucrats, contractors, sub-contractors, in-service support players, regional politicians and so on. The armed forces, who actually use the stuff, only fit in somewhere in the middle of that list of stakeholders.

 

Feeling the heat

On major procurements, the Department of National Defence’s role is to make a list of its requirements, which it then hands to the Public Works and Government Services Canada, a ministry headed by Rona Ambrose, which does the actually buying. With that much money involved it should come as no surprise that Ambrose is already feeling the heat from interest groups, and this month, in an address to CANSEC, the national defence industry trade show, she told stakeholders to back off.

 

"Companies involved in the NSPS implementation process have been asked not to engage lobbyists,” Ambrose said. “It was our intention at the outset to ensure that the NSPS competition would be run through a process that is completely arms length of politics."

 

Since the defence department does not get to specify exactly what kit it needs or wants, only the capabilities that it must fill, the specifications read rather broadly. That said, the major ships that will be procured fall into three broad categories.

 

Canadian Surface Combatants

The new Canadian Surface Combatants are designed to replace both Canada’s frigates and destroyers. The goal of the program, which is currently in the definition phase, will be to provide the navy the ability to monitor and defend Canadian waters and to continue to make contributions to international operations.

 

“They will have a common hull design, which will save the armed forces some money,” says MacDonald. “However they will be fitted with different weapons, communications and other defense systems.” While nothing has been made public yet, the first new ships will likely replace Canada’s ageing Iroquois class destroyer capability, with subsequent ones replacing the Halifax class frigates, which have a longer expected life.

 

Joint Support Ships

The Joint Support Ships are designed to replace Canada’s two existing Protecteur class Auxiliary Oiler Replenishment (AOR) vessels, the HMCS Protecteur and the HMCS Preserver, which provide a range of functions such as supplying troops at sea with fuel, munitions and food, well as extensive medical and dental facilities.

 

Because they have been around so long (close to 40 years) replacing the AORs has long been a priority, In fact attempts have already been made. Yet despite several efforts, the project has been hit with a slew of delays. During the end of the last decade the Canadian government asked for bids to produce three support ships, one of which would be deployed on each of its coasts and the third of which would act as backup. However the project got so laid down with demands, that the government eventually ruled that none of the competing groups could meet the specifications.

 

Arctic Offshore Patrol Ships

The ships that could potentially generate the best return on investment though are the proposed Arctic Offshore Patrol Vessels, which are projected to be built between 2012 and 2019.  Climatologists have suggested that global warming could eventually open up a Northwest passage, which British explorers searched in vain for decades during the 1800s, that would shorten travel from Europe to the Pacific ocean.

 

The challenge is that many countries, including the United States question Canada’s sovereignty in these waters. The fear is that if Canada does not assert its jurisdiction there by conducting armed seaborne surveillance, ships will pass through with impunity and that other countries could eventually lay claim to some of the region’s resources.

 

Yet despite the Canadian government’s ambitious procurement goals, many industry watchers are waiting with a wary eye to see how much of them actually get implemented. For example while MacDonald notes that the country’s procurement budget is set to increase for the next four years, as funds saved from the reduction of Canada’s Afghanistan commitment, are gradually devoted to capital expenditures, nothing is hammered in stone. “The average time lag between when needs are actually identified and filled is well over ten years,” says the industry veteran. “There is always a temptation when there is a hole in the budget to fill it by delaying a program for another year or so.”

 

Yet those pressures are often higher in minority government situations. Right now, with a newly elected majority government, Canada’s armed forces procurement efforts have the best chance of materializing that they have had in some time.

 

Peter@peterdiekmeyer.com

 

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