Finance committee  That's right, yes.

Finance committee  Today it is, yes. But if you look at the prices in 2006, the ship you can get in China for $25 million or $24 million today would have been about $40 million, because they weren't going to let that margin go. In those conditions, the difference actually came to a wash, or very close to it.

Finance committee  Yes, I think conditions are pretty desperate for building it. One of the things you have to bear in mind is that these old service shipyards that are capable of building ships are essential to the marine operators to maintain and repair the ships they have. So you have to find some way to preserve that capability, even if there's not shipbuilding available for new construction.

Finance committee  Let's start with that one-third price that you pay in China for the same ship, because you have to build the equation.

Finance committee  Let me get to that. Let's say you can purchase that ship in China for $24 million and it costs a little over $75 million to build that same ship here. On the $24 million, you add a 25% vessel import duty—to which you're referring—which is $6 million. Now you have the price up to $30 million, and frankly, it still looks pretty attractive compared to a price of $75 million.

Finance committee  The rest of this you can apply against that, and it actually decreases the price to the customer on the Canadian side. The structured financing facility can buy down the total cost of that project by about 15%, and 15% of $75 million is going to be something in the order of $10 million.

Finance committee  Yes.

Finance committee  If we look at the shipyard in St. Catharines, which belongs to us, it has survived on doing these forebody conversions, where you replace up to 80% of the steelwork in the hull, preserving the mechanical and control system sections of the ship. Because these ships have a lifetime in fresh water, they can go quite a long time without being replaced.

Finance committee  —but it's a price of economics.

Finance committee  No, commercial shipbuilding takes place. I think the successful ones are probably on the east coast, from Prince Edward Island. They've got a successful export for tugs, specialized purpose vessels. Offshore modules are also built and refitted and refurbished in Halifax. Irving Shipbuilding does those.

Finance committee  I'm well aware.

Finance committee  Thank you for this opportunity to address the committee. In the interest of everybody, I will refer to a prepared text, and my topic is shipbuilding. The Government of Canada is currently reviewing options for the renewal of the government fleets, based on a commitment to build in Canada, at a nominal cost of more than $40 billion for more than 50 ships over the next 20 years.