Although folks in the TASER thread aren't happy with Senator Kenny I think this is a good article and exactly what is needed in Canada
Published: 2007-12-04
Boosting shipbuilding makes sense
By COLIN KENNY
The Canadian government is going to require well over a hundred new ships over the next quarter century to take care of some critical assignments overseas and along Canada’s coasts.
We need a national strategy to ensure that we have a viable shipbuilding industry. Formulating that strategy is going to be essential to Canadians’ maritime security and vital to Canada’s economy. Parliament should legislate a plan and develop institutional support for this strategy.
There are good reasons for the government to continue to build the ships it needs in Canada. But it must come up with a system that is less hit-and-miss than what we have now to ensure that we retain the resources to build those ships.
In the past, the federal government’s need for new ships has never been sufficient to guarantee anything more than sporadic employment at shipyards in Atlantic Canada, Quebec and British Columbia.
That has created a stuttering industry, with shipyards and their employees never sure whether it was worth it to develop their skills and devote their lives toward the end of building first-class ships.
We need a shipbuilding industry that hums rather than stutters. By my count, Canada is going to need something like 133 new vessels of a significant size over the next 25 years, plus refits.
The Department of National Defence is probably going to need at least 45 ships, including the modernization of 12 frigates and their future replacement, as well as four new destroyers, eight Arctic/offshore patrol vessels, and refits for four submarines.
The Department of Fisheries and Oceans is going to require at least 83 vessels, including nine icebreakers, 15 medium endurance and offshore patrol vessels, and 42 Search and Rescue lifeboats. Transport Canada will need three Marine Atlantic ferries.
That represents a lot of champagne bottles bursting over new bows. There is enough critical mass to restore Canadian shipyards in both Eastern and Western Canada to viable, continuous operations.
Good economic opportunities are vital to the survival of any sovereign state. The Canadian manufacturing sector has taken a huge hit in recent years because of fierce foreign competition and the ascent of the Canadian dollar. A secure shipbuilding industry could play a big part in Canada’s economic future.
Canada is in bad need of ships – new ships and refitted ships. The world is becoming an increasingly volatile place. No country can be absolutely confident that these kinds of needs will be met in foreign shipyards, especially if war were to break out.
If the Canadian government were to institute a continuous shipbuilding program, there would, of course, have to be safeguards on costs. No country can afford to pay double, or even a 50 per cent premium, for Canadian content on such major purchases.
But Canadian shipyards are no longer out of line on costs. While they can’t compete with developing countries on basic metal-bending, modern shipbuilding requires producing modules that incorporate electronics and other complex components. Canadian shipyards can do this as well as anyone.
To assure reasonable pricing, it wouldn’t be that difficult to set up a regulatory authority, similar to the National Energy Board or the Canadian Radio-television and Telecommunications Commission, to ensure fair pricing. Such an authority could hold hearings to ensure that Canadian taxpayers weren’t getting gouged on contracts.
How could the Canadian shipping industry be confident that the next government that came along wouldn’t pull the rug out from under a 30-year plan for shipbuilding that was designed in some earlier Parliament?
First, contracts could be signed so major firms would be guaranteed work on a long-term basis, contingent on regular audits. Those contracts should require major shipbuilding yards to subcontract some percentage of that work to smaller yards, to assure broad capacity in the industry.
This plan would have such economic and political benefits that any succeeding government would meddle with it at its peril.
Essentially, the government would be allowing monopolies in the interests of Canadian security, as it does with pipelines and power companies. This has been a standard model that governments have been using for essential utilities for more than a century.
Profits would still be good if the government created a monopoly structure for shipbuilding, but not as good as they would be if marketplace risk were involved. That’s the trade-off, but it would be a good one for both the industry and Canadians.
Such a grand plan might be of great economic and strategic value to Canadians. It would assure that Canadians will have the navy and coast guard that we need. It would be founded on a regulatory regime that would satisfy the auditor general.
It has become increasingly apparent that the federal government is going to have to pay close attention to ensuring Canada’s economic survival, and Canada’s physical survival.
The shipbuilding industry would be a good place to start.
Senator Colin Kenny is chair of the Senate committee on national security and defence.
© 2007 The Halifax Herald Limited
