Mr. Speaker, on June 3, 2010, the Government of Canada announced the national shipbuilding procurement strategy, NSPS. Estimated at $35 billion, the strategy has three components. For large ship construction, Canada will establish a strategic relationship with two Canadian shipyards, selected through an open and fair national competition, and designate them as sources of supply, one for combat vessels and the other for non-combat vessels. For smaller ship construction, Canada will set aside the individual projects for competitive procurements amongst Canadian shipyards other than the shipyards selected to build the large ships and their affiliated companies. For ship repair, refit and maintenance, these requirements will be competed through publicly announced request for proposals.
On October 19, 2011, Irving Shipbuilding Inc., or ISI, was selected to build the Royal Canadian Navy’s combat vessels for the next 20 to 30 years. ISI has its primary office at the Halifax Shipyard.
On February 13, 2012, an umbrella agreement was signed with ISI. The umbrella agreement is a long-term strategic sourcing arrangement that defines the working relationship and administrative arrangements under which the government will negotiate fair and reasonable individual shipbuilding contracts. Since the signing of the umbrella agreement, the government has been engaged in negotiations with the shipyard on the Arctic offshore patrol ships, AOPS. On June 27, 2012, a $9.3 million ancillary contract was signed with ISI for the AOPS project.
For its part, ISI has been actively recruiting senior personnel and establishing partnerships. The shipyard has also participated in numerous supplier engagement seminars across the country.
As the government is only months into a 30-year working relationship, the economic impact of the national shipbuilding procurement strategy has yet to be measured. However, a May 2011 Conference Board of Canada report prepared for the Greater Halifax Partnership, entitled “Canada’s National Shipbuilding Procurement Strategy: Potential Impact on Nova Scotia and other Regions” provides estimates with regard to the economic impact of the strategy.
A copy of the Conference Board’s report is available at: http://www.greaterhalifax.com/site-ghp2/media/greaterhalifax/CBOC%20-%20EIA%20Final.pdf.