Government Operations Committee on May 3rd, 2022

[Kelly McCauley, Conservative, Edmonton West, AB]

What is your ability to scale up should you get a contract for one of those ships? We know there's a labour shortage. There's a skills shortage. Would it be focused on one certain area? You mentioned that you have several docks. Where would it go? Where would you find the people?

[Shaun Padulo]

Thank you. Those are good questions.

I think our biggest issue right now is that in southern Ontario we're in the most populated centre of the country. We had to ramp up several years ago to take on a commercial project to replace 250,000 pounds of steel after they ran aground, and we were able to bring on 300 people very quickly. Our issue has always been the continuity of work and being able to keep people and attract people.

The proposition of being hired for three months and then being laid off is not a good one, especially in this labour market when there's a ton of different opportunities. At the same time, the jobs in the shipyard are high-paying jobs, so if we can create continuity of work, I think we can solve a lot of the labour issues that we've seen during the boom-and-bust cycles. I hope that answers your question.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks.

I have just one last question. On partnering with Davie, Seaspan and Irving, how do you do so? How does the government, under the NSS or any other form, encourage such subcontracting partnerships without basically sticking it to the taxpayer? It's one thing to say, “hey, great, we're building everything in Canada”, but if we're doing it at Irving and doing it at eight times the going rate, that's not great value for taxpayers. How do we move forward and address something like that?

[Shaun Padulo]

It's a great question. I don't want to speak on behalf of Irving, Seaspan or Davie. I think there are challenges on both sides: with the shipyards but also with the government.

Again, this was a monumental undertaking in terms of trying to rebuild an industry. I know that from our perspective.... Again, I don't mean to keep bringing up the Amundsen, but if we deliver it—and we're on course to deliver it on time—it will be the first on-time and on-budget project. I think creating a framework to bring other yards into the national shipbuilding strategy, to bring more capacity into the national shipbuilding strategy, will help alleviate some of the constraints that are currently there and potentially bring down prices.

[Kelly McCauley, Conservative, Edmonton West, AB]

That's perfect timing. Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Now we'll go to our final questioner, Mr. Bains, for five minutes.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you, Mr. Chair.

Thank you to our witnesses for joining us today.

My questions are coming from Richmond, British Columbia. This study is very important to us and to our marine sector on the west coast. Richmond is also the home of the largest commercial fishing harbour in all of Canada, so much of what you've said is very interesting to me.

I think you answered a bit about the sustainability of shipbuilding, and you went into some length there. What should we do beyond the national strategy? I think you've answered some of those things, but I'm just wondering about recruiting and retaining staff. What can we as a government do to support the recruitment and retention efforts, maybe in partnerships or collaborations with our academic institutions?

As you may know, we have the British Columbia Institute of Technology, one of the best and a world-class trade school. What are your thoughts on that? Are there any partnerships with the academic institutions and the industry? How we can help support that?

[Shaun Padulo]

I would echo that B.C. has some great educational institutions. I went to school there; it was a great time.

Right now at Heddle, we're embarking on a program in which we're partnering with trades colleges that are in the areas where we have shipyards: Mohawk College in Hamilton, Confederation College in Thunder Bay and Niagara College in the Niagara region, in St. Catharines. What we're doing is creating a standard curriculum for ship repair and ship construction.

We need to get young people attracted to this industry. I think there are some incredible things that can be done. It's a great industry, and it's one where you can have a career, should we find stability within all the different shipyards in Canada.

Again, I'd just like to echo that I think if the federal government can do anything, it's to perhaps mobilize some of the trades colleges across the country to come up with a consistent curriculum, but to at the same time ensure that the shipyards that are offering employment do have work. For example, ensure that Davie in Quebec has multi-generations' worth of work and ensure that Seaspan and other shipyards—like in Port Alberni—have work.

I think the single greatest thing the federal government could do is roll out the programs that have already been green-lighted and funded.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you.

In terms of the maintenance of ships, at what point do you think they should need to be completely replaced? What's the lifespan of many of these?

[Shaun Padulo]

That's a very difficult question. There are many different variables. Again, the rule of thumb within the commercial sector is 25 to 30 years, but they're built to last 25 to 30 years. If I look at some of the Coast Guard ships we have repaired, they are into 40 or 50 years, and one is almost 60 years old. I think at that point you're almost spending money to keep a ship alive and you're probably throwing good money after bad. It's extremely important that we start bringing new ships into operation so we can start recycling in an environmentally and sustainable way the vessels that are in the current fleets.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

When you look at the recycling and the amount of money going into the repairs, is it better to bring new ships into circulation rather than even doing the repairs?

[Shaun Padulo]

I think it all depends on the circumstance. The large, complex VLEs are extremely complex. If you look at the Amundsen that we have in the shipyard right now, it requires a significant project management team. There's a huge team in place. The workers we have are incredibly skilled. If the government hopes to continue on with major VLE programs, they're really going to need to look at shipyards that are capable of taking on that work so they don't hurt smaller shipyards, which are starving for work and which would take on a large complex project and then be unable to deliver. That hurts the shipyard, but it also hurts Canada; it hurts the Coast Guard and it hurts the navy. I think it's incumbent upon Canada to look at certain shipyards that are capable and large enough to take on the complex VLEs. Nothing is impossible; it's just a matter of projects being able to go to the yards that are capable of doing them.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you.

Mr. Chair, how much time do I have?

[The Chair, Conservative, Robert Gordon Kitchen]

You have 14 seconds.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Well, I will allow someone else to take some of that time.

[The Chair, Conservative, Robert Gordon Kitchen]

You are yielding the time back to me. I appreciate that.

With that said, we've come to the end of our questions.

I would like to thank Mr. Padulo for being with us here in person.

Thank you, Mr. Fulfaro, for being here with us. We realize that it's closing in on 11 o'clock your time. We appreciate your taking the time to answer our questions and provide clarification to the committee.

So thank you very much—

[Achille Fulfaro]

Could I get 20 seconds of your time before we close?

[The Chair, Conservative, Robert Gordon Kitchen]

Okay, we'll give you 20 seconds.

[Achille Fulfaro]

Thank you very much. I really appreciate that.

I want to convey a message from Fincantieri to you all.

We discussed today very complex programs like the frigate program. As we said, from Fincantieri's side, in order to achieve the target, to be on time and to be within the budget and be of quality, you need three major things. You need for a local capability, a local shipyard. You also need a strategic partner acting as the prime contractor from the time of mission profile analysis up to the end of life in order to properly reduce the risk in the different phases. Fincantieri can be this strategic partner because it's a global player and can act with the proper transfer of technology in order to maintain the program within the targeted price, without going over any type of valuation for a real frigate that is completely different from what you are having in your program. Finally, you need a very solid design in order to properly manage the program.

This is the message I want to convey to you all. I hope we can have a chance to discuss this in more detail.

Thank you very much.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you once again.

Thank you, all.

As I mentioned throughout, if there is something further that either of you would like to submit to the committee, please feel free to do so. Submit that to the clerk, and we will distribute that to everybody.

With that said, the public portion of our meeting is now complete. We're about to go into the in camera portion of our meeting.

With that said, I now declare the meeting suspended.

[Proceedings continue in camera]