Mr. Chair, members of the committee, I'd like to thank you for the invitation to appear before you to discuss the national shipbuilding strategy.
I'm Troy Crosby, assistant deputy minister, materiel, at the Department of National Defence.
It is my responsibility to outfit the Canadian Armed Forces and its members with operationally relevant and safe equipment and services, so the Canadian Armed Forces can accomplish the missions assigned to it by the Government of Canada.
Today we are discussing the national shipbuilding strategy and what it means to the recapitalization and in-service support of the Royal Canadian Navy.
As a reminder, in the shipbuilding strategy it's planned to deliver six Arctic and offshore patrol ships, two joint support ships and 15 Canadian surface combatants to the Royal Canadian Navy. This is an immense undertaking spanning decades of work and involving billions of taxpayers' dollars. For context, one of the projects, the Canadian surface combatants, will be designed and then built over a 30-year duration and will be the backbone of the navy for four-plus decades. Construction of these 15 ships is currently forecast to require some 60 million person hours of labour.
Shipbuilding has many stakeholders. Internally, it involves interdependencies with departments such as Public Services and Procurement Canada, or PSPC, and Innovation, Science and Economic Development Canada, or ISED, and is supported by a broad web of policies and authorities. Externally, it involves our prime contractors, their subcontractors and a complex supply chain.
You have heard from my colleague at PSPC how we have made significant strides towards satisfying the objectives of the national shipbuilding strategy. You have also heard that there have been significant challenges faced, the global pandemic being but one of them.
Specific to the shipbuilding strategy objective of satisfying the requirements of the Department of National Defence,
my colleague, the commander of the Royal Canadian Navy has expressed that he is pleased with the performance to date of the two Arctic and offshore patrol vessels that have been delivered. The historic passage through the Northwest Passage, while circumnavigating North America, is evidence of the capability this new ship brings to Arctic sovereignty.
Ships four and five of this class are well under construction in the Irving shipyard in Halifax and steel cutting on the sixth ship is planned to occur later this year.
The very visible progress on construction of the first joint support ship in Vancouver is also most welcome. Vancouver shipyards is planning to cut steel on the second joint support ship in the coming months.
There has also been significant progress on work accomplished on the Canadian surface combatant design with a goal of cutting steel in the 2024 time frame.
Improvements in implementing the shipbuilding strategy are required, however, and investments in our collective capacity, including industry, are needed. Simply put, ships are not being built fast enough and are costing more as a result.
A recent PBO report on the NSS underlined the time value of money on a project of the magnitude of the Canadian surface combatant. By their calculations, one year of ship schedule slippage could equate to $2.2 billion of lost buying power. At the same time, we need to keep in mind the cost and collective ability to keep our Halifax class frigates in service and at the required operational level while bridging to deliveries of the Canadian surface combatant.
The required security in shipyards where warships are built and maintained, as well as their supply chain, limits options as to where this type of work can be done. Having the domestic capability and capacity to support our existing and future fleet allows sovereign control. Events in the world today have reinforced the importance of this ability.
The national shipbuilding strategy is crucial to National Defence. Collective focus is required to continue across the various stakeholders, including industry, to bring the new fleet into service in the time that it is required.
I will be pleased to take your questions.
Thank you.