Thank you very much for having me here today. It's a very interesting version—and a privileged version—of a hot seat this morning.
Thank you for inviting me to speak to you today.
In my opening remarks, I'd like to give you a Canadian defence industry perspective on the recapitalization of the Royal Canadian Navy and Canadian Coast Guard.
Six years ago, the government unveiled the national shipbuilding procurement strategy, which is now called the “national shipbuilding strategy”, or NSS. The core principle of the NSS is that this historically large recapitalization of the Royal Canadian Navy and the Coast Guard will be carried out in Canada. The objectives behind the principle are twofold: first, to bring predictability to federal vessel procurement; and second, to end the boom-and-bust cycles that have characterized Canadian shipbuilding in the past. Together, the result can be a sustainable long-term shipbuilding plan that benefits Canadians and the Canadian marine industry.
CADSI fully supports the principle and objectives of the NSS. One of the strengths of the NSS is that, from day one, it received strong all-party support in Parliament. I say this because it's a common-sense proposition. Spending tens of billions of taxpayers' dollars over two or three decades on recapitalizing the navy and Coast Guard presents a rare and achievable opportunity. The opportunity is to revitalize Canada's shipbuilding industry, increasing high-wage employment throughout the country and bolstering innovation.
Moreover, at a time when the federal government is trying to jump-start the Canadian economy out of its slow-growth rut, the projects that comprise the NSS are poised to have significant short- and medium-run economic impact, effectively functioning not unlike the infrastructure stimulus that the current government is investing in.
According to government estimates, for example, the large vessels portion of the NSS is estimated to contribute, based on contracts to date, nearly $4.4 billion to GDP and to create or maintain up to 5,500 jobs per year between 2012 and 2022. This economic impact stands to grow as new contracts are signed. One estimate suggests that if capital, personnel, operations, in-service support, and maintenance costs over 25 years are added together, the total estimated cost of the large ship construction program is more than $111 billion.
It's worth mentioning that Canada is a G7 country. Every G7 country has a significant domestic naval shipbuilding industry, some of which—or some of whom—will be actively bidding on the design and build of the Canadian surface combatant.
If you hear someone trying to convince you that they can offer an alternative approach to the NSS and that Canada's industrial benefits requirements should be relaxed, then it's very likely too good to be true. This is one of those very few industries that is seen as being truly strategic and vital to the economies, if not the national defences, of the world's leading countries.
That said, there are those who would argue that Canada should be recapitalizing the Royal Canadian Navy by buying offshore and off the shelf. They'd say that Canada has no business in the naval shipbuilding industry because we don't do this well. The claim doesn't hold water, so to speak.