Evidence of meeting #35 for National Defence in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was program.
A recording is available from Parliament.
NDP
Rachel Blaney NDP North Island—Powell River, BC
Thank you.
I'm very excited to hear that you're looking at building for BC Ferries. I think a lot of people in our communities will be very happy to hear that.
I have a question about how you're preparing for the construction of the RCN joint support ships. How is the training going and how are you preparing for that?
Chief Executive Officer, Seaspan
Well, the good news from a shipbuilding perspective is that if you're working in one of our shops, you're building parts of a vessel almost like building with Lego pieces. To be honest with you, right now we are working on a vessel. In less than about four weeks, the entire vessel will be seen on our property. Stem to stern, top to bottom, it will look like a ship. Up until this point, it's been pieces of a vessel, which we build in blocks, that have been moving throughout our shipyard.
The reason I give that story is a lot of our employees working in a shop, putting a panel together, actually don't know if it's going into an OFSV or a joint support ship. Thankfully, shipbuilding is agnostic as to the type of ship that comes out the door.
For us, it's about building up, and similar to what we heard when Kevin was talking about training at schools, it's getting them comfortable and knowledgeable about how to build a ship. I mentioned earlier that we are seeing fantastic tradesmen and tradeswomen coming from Alberta, for example, with 10, 15, 20 years of experience. That's not shipbuilding experience, so we have to retrain them in some areas from their basic trade into a shipbuilding version of that trade—pipe, steel, electrical, whatever it is. Once we get that skill set ingrained, they're going to go to work and they're going to build beautiful ships, but in their portions of the building, they actually don't see anything different.
Chief Executive Officer, Seaspan
The key is that we're training them now. Regardless if it's a joint support ship or an icebreaker, they'll be doing the same work.
NDP
Rachel Blaney NDP North Island—Powell River, BC
One of the things we've heard a lot about is how both of you are working with local businesses and getting as much Canadian content as possible. I'd like to hear a couple of success stories of that, and also if you have any stories about how you're working with smaller yards to help you with the work that you're doing.
President, Irving Shipbuilding Inc.
I'll give you a couple of examples from the AOPS program. We have a local small business, Bluedrop associates. Bluedrop has a $15-million contract to develop the 3D visualization of the training. They're really a world leader in this, a small company right in Halifax, and they are actually taking some of what they're putting together for the Arctic offshore patrol ship and that technology, and with the people they're hiring, they think they're going to be in a better position for export.
In my notes I talk about a Quebec company, Bronswerk, that is opening up two additional sites in Halifax and has about $80 million's worth of contracts and people. We have a multi-mission rescue boat. Two of them will be on each AOPS. They're going to be built in Rosborough, Nova Scotia, about 20 to 30 kilometres from us—a great small boat company, a great opportunity for them. They're going to build 12 of these multi-role rescue vessels.
We're very much committed. As a matter of fact, our contracts have small and medium-enterprise goals that we have to satisfy for Industry Canada as part of the contracts. We work very closely, particularly with the small and medium-sized enterprises. We have things that are mundane—foundations, doorways, ladders—being manufactured in three or four different machine shops around Nova Scotia. They are good jobs and provide steady work that is keeping people employed. We think it's a good-news story.
Co-Chief Executive Officer, J.D. Irving, Limited
If you have the opportunity, I hope you do come and see us at the yard in Halifax. You will be able to see a vendor map of Canada on a screen, with every vendor on it, up to date.
We can lay the ridings on it right over that map, so everybody can have a good look at where the money is going and how it's getting spent and what's happening. We're taking that responsibility very seriously. We really work hard at that; that's important, and we understand it.
Chief Executive Officer, Seaspan
We have a very similar story and we also have a map of where all the money is being spent across the country. Obviously it's migrating more east and west, with a little bit of central work. The central provinces don't see a lot of that because of the manufacturing they do, but it is coast to coast.
I think it was one of the gentlemen earlier who asked us to please make sure others are included. This is the great storyline here. The vast majority of the money that flows out is to these businesses across Canada.
Interestingly enough, we also just recently have brought Bronswerk on board, as well as another company in Quebec called Techsol. It does a lot of our electrical work, producing great products, and they are shipped to our door. Then, being where we are, we also have a lot of local vendors either on Vancouver Island or in Vancouver proper, such as Ideal Welders, which is producing hundreds and hundreds of pipe spools for us that we put into our vessels.
We have a list of probably 150 success stories like that.
Co-Chief Executive Officer, J.D. Irving, Limited
Just as a point of interest, when we built the frigate program in the 1980s and 1990s in Saint John, there was more money spent in Ontario and Quebec than there was in New Brunswick in Saint John. Ontario and Quebec were the big beneficiaries of that program at the time. I would expect that by the time this is all over, they will still be the big beneficiaries.
February 2nd, 2017 / 5:15 p.m.
Liberal
Leona Alleslev Liberal Aurora—Oak Ridges—Richmond Hill, ON
Thank you very much, you guys. It's clear that you are committed to delivering this program to a high standard, on time and on budget, as of course our government is as well.
I want to come back to project management. You highlighted the complexity of it, and the need for speed and quick decision-making. Could you share with us the roles and responsibilities between you and the crown? What recommendations do you have for the crown with regard to how this could be changed to support the process so as to ensure that our navy gets those ships as quickly as possible?
Vice-President, Programs, Irving Shipbuilding Inc.
There's a lot of detail we could go into around roles and responsibilities, but I think, fundamentally, the government is responsible for setting the requirements and the strategic direction of what we're doing. Decisions on the requirements, what they want out of these contracts, and what success looks like at the end is absolutely Canada's responsibility.
Our role and responsibility is to execute all this in the most cost-efficient, timely way that we can. We are very focused on that, and I think the government is focused on it, but the divestment of responsibilities across a number of departments sometimes isn't the best way to achieve speedy decision-making.
Liberal
Leona Alleslev Liberal Aurora—Oak Ridges—Richmond Hill, ON
What's the recommendation? How do we fix it? Come on, guys.
President, Irving Shipbuilding Inc.
What we've suggested to the crown is to look at the models used in the U.K. and the U.S. that have a single leader accountable for delivering the program within all the constraints. That was our suggestion to the crown.
Chief Executive Officer, Seaspan
We did the same. A single point of accountability is very important. Actually, within our own shipyard we unfortunately can't build ships with masses of people all making a decision, so we have an SPA, a single point of accountability. From the government, we also find this would be helpful.
Liberal
Leona Alleslev Liberal Aurora—Oak Ridges—Richmond Hill, ON
Would it be safe to say that you're recommending a single point of contact across programs—that is, an integrated program rather than an individual stovepipe program?
Chief Executive Officer, Seaspan
That's correct. We're a bit more complicated because we have two customers, two main customers, but that would be very helpful. There's acknowledgement from the crown that it would be something it would like to look at. It's not falling on deaf ears; it is something that would help both shipyards out immensely.
There is also the matter of the number of contracts. I mentioned that earlier. It slows down the process. It's all about speed. Kevin spoke eloquently about what kills speed. We have to increase speed when it's slowing down, and right now we could have up to 60 different contracts that need to be signed with the government in 2017. It's a lot.
Vice-President, Programs, Irving Shipbuilding Inc.
Could I add to the point you made about being integrated? That is incredibly important. We find that as you break it down to different programs, there's a tendency to want to micromanage individual contracts. A single point of accountability needs to have the responsibility for the strategy as well as for making the individual program successful.
Liberal
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
Thank you, Mr. Chairman.
What percentage of the workers in Halifax were recruited from outside Canada?
President, Irving Shipbuilding Inc.
People like me and my colleague Scott Jamieson represent less than 4% of the workforce. All the trades in the shipyard are Canadian. As Jonathan indicated, it is the same with Seaspan.
In order to get this business run right, there are people who need 20 years to 30 years of planning, engineering, project management, and supply chain experience. These people didn't exist in Canada, so we have gone out for a handful. It's small. About 4% of our workforce right now was recruited from outside of Canada. However, all of them are on a path to permanent residency with their families. Their kids are in school. Some of them are on a path to citizenship, and some have already been through the path to citizenship. We're committed to keeping this as a Canadian program, but we recognize that shipbuilding is an incredibly complex and talent-specific business, and we're relying on that handful of folks from outside of Canada to mentor and train the next generation of Canadian shipbuilders.
