Backgrounder SOS
S. O. S.
On May 19, 2008, the Ottawa Citizen’s headline read “Plan for supply ships comes up short” and the news that many had been expecting was finally out in the open as DND’s plans to acquire three Joint Support Ships for $2.1 billion (plus a further $800 million for long-term in-service support) seemed to have finally run aground – insufficient funds.
Announced by the New Conservative government in 2006, the ambitious project had been on DND’s books for well over a decade during which time many ship design alternatives were considered before selecting a common hull form to undertake support for the naval destroyers and frigates as well as strategic sea lift, support for shore-based forces, in-theatre hospital, and personnel transport roles. The three JSS (four were preferred in order to assure a continuous capability on both coasts) then became the subject of fierce competition with six teams replying to the initial Letter of Interest, subsequently being down-selected to four to respond to the Project Definition (PD) Request For Proposal (RFP). From these, two teams – ThyssenKrupp Marine Systems Canada and SNC-Lavalin ProFac - were selected for PD contracts to define their respective approaches as how best to meet the Navy’s requirements.
At the time, the JSS project marked the first step in the government’s “Canada First” Defence Strategy.
With the federal government about to finish its business for the Summer recess, the JSS dilemma may have been put on the back burner, though it’s understood that the government has met with both competitors to review the situation. However, as of yet, no realistic solution has emerged. The alternatives, however, are quite clear: either provide adequate funds to deliver the needed ships or cancel/reduce the scope of the project.
Either way, the Navy needs to replace its aging supply ships – HMC Ships PROTECTEUR and PRESERVER – as they are now 40 years old and have for years now been propelled by obsolete steam-driven equipment for which the Navy no longer trains its operators and maintainers.
On top of this, for almost the last 20 years, the Navy has directly contributed to the war on terrorism starting with the first Persian Gulf War in 1990 and continuing ever since with deployments to East Timor and elsewhere. In short, safety and security at sea are today very different than during the Second World War and, as a result, the Navy has to adapt. The JSS is but one aspect of that adaptation - and it is sorely needed without further delay.
Unfortunately, few Canadians understand the necessity of having a strong and relevant Navy. Thus, a project such as JSS could very easily, and for the wrong reasons, find itself either scuttled entirely or relegated to do the very least at the very lowest cost.
As a responsible organization that advocates for a strong and relevant Navy, the Navy League of Canada strongly encourages the government to act in the best interests of all Canadians, in the best interests of the Canadian marine industries, in the best interests of our allies, and in the best interests of our Navy to continue with its “Canada First” Defence Strategy and to fund the JSS project as necessary to procure and support at least three Joint Support Ships within the earliest possible timeframe.
The Naval Requirement
While the JSS project will replace two existing supply ships, it actually is meant to replace three ships (HMCS PROVIDER, the Navy’s first supply ship, was disposed of a few years ago when it became unsupportable). With only two supply ships – one on each coast – it is impossible (due to refit and alongside maintenance periods) to provide the support capability on more than about a 60% basis. As the Navy is very adept at being able to move ships from one coast to another at minimal notice, a total of three supply ships increases this “availability” to about 90% whereas a fourth such ship would almost meet 100% availability to address a single situation from either Naval base (Halifax, NS or Esquimalt, BC).
Furthermore, for each year of delay in replacing the existing supply ships the operating and repair costs will continue to rise as equipment and materials become obsolete, unsupportable, and/or irreplaceable. As a result, Canada risks losing its global maritime reach and much of the status and influence we enjoy as a maritime power and coalition leader. Without these ships, we must face the possibility of being unable to deploy our Task Groups and/or participate with our allies in multi-national/coalition operations (in this regard, it should be remembered that the Canadian Navy, with its expertise in multi-role support operations, commanded the Coalition Support Task Force during the first Gulf War (1990-1991)).
In addition, without a relevant and capable JSS, Canada risks losing all the options the Navy provides for diplomacy and humanitarian aid. We also lose our ability to deploy ships and aircraft on missions independent of any other nation, such as our mission in East Timor (1999) and the humanitarian assistance provided to the USA following hurricanes Andrew (1992) and Katrina (2005). This loss places serious constraints on our ability to develop and implement independent Canadian foreign policy.
While the benefits of the existing supply ships are well understood (they provide a mobile support base for the frigates and destroyers while on extended deployment – refueling, provisions, etc.), the utility of the Joint Support Ships is probably less clear to many Canadians, even those with a maritime background.
As our world continues to change, and becomes more complex, Canada needs a strong, capable, and relevant Navy – one that, in addition to other capabilities, has the ability to quickly move quantities of equipment – such as main battle tanks, trucks, helicopters, light aircraft, etc. – to virtually anywhere where there is ocean access. While transport aircraft (such as the new C-17 strategic lift aircraft) can move limited quantities of equipment fairly rapidly, a ship – such as the Joint Support Ship – can operate “in harms way” for extended periods and presents a credible and sustainable presence wherever and whenever needed. These ships also provide an “in theatre” command and control capability, a mobile hospital capability, and a temporary respite for personnel deployed ashore. In fact, had the JSS been available, they would have played vital roles in removing Canadian citizens from Lebanon in 2006 and they would have prevented the diplomatically embarrassing situation that Canada faced with the GTS Katie incident of 2000. For both those situations Canada in effect became a hostage to other countries – a situation that we should not find acceptable ever again.
Economic Benefits to Canada
While the Naval Requirement must be considered as being of paramount importance, the economic benefits to Canada of the JSS project cannot be overlooked.
The Canadian shipbuilding and ship repair industry has gone through an extended “lean” period due to a lack of government shipbuilding programs (witness the lack of shipbuilding projects for the Canadian Coast Guard since the Louis St. Laurent was modernized in the early 1990s and the CPF and DDH 280/TRUMP projects which lasted until 1996).
However, with the JSS project, the competitors are obliged to committing to a minimum of 100% in the form of Industrial and Regional Benefits (IRBs). This means that, for every dollar spent by Canada on the project, the industry will spend an equal amount in putting high-quality/high-technology work into Canadian companies, either directly for the project, or indirectly, and this work will benefit all regions of Canada - small businesses and large businesses. This is not a trivial or insignificant promise or commitment as any company that received such benefits under the CPF and/or DDH 280/TRUMP projects will readily attest.
Compared to Air or Army projects, Naval shipbuilding and ship repair projects deliver far more work to a broader range of Canadians. The reason is simple. For air and army projects, a single commodity is usually being procured and the benefits are thus limited and regionally contained. On the other hand, a naval ship is, in effect, an entire community that operates for extended periods completely on its own, and thus provides the entire range of goods and services as does a small city.
Another factor is that the JSS, while they are naval ships, are not fitted with the same complement of weapon and sensor systems as are found on frigates and destroyers. In essence, they are large steel hulls with appropriate equipment and accommodation arrangements that, to a large degree, can be completely provided by Canadian companies.1
The competitors for the JSS project have each defined their own IRB program. While the details of the two programs will be quite different, the benefits will, to a large extent, be similar; there will be wide-spread benefit to all regions of Canada.
Now, let’s look at the Canadian marine industry.
First, marine industries contribute more than $20 billion to our economy each year and they generate more than 350,000 jobs. Second, marine industries have an Economic Generation Factor of 5:1, fueling local economies and driving international trade2 meaning that, for every dollar spent, a further five dollars of economic benefits are created (thus a $2-3 billion project adds a further $10-15 billion benefit to the Canadian economy). Third, maritime traffic in Canadian ports (i.e., global maritime trade) is presently predicted to grow by as much as 12-15% per year for the next decade. And fourth, shipbuilding jobs in Canada produce an average sector wage that is 33% higher than the Canadian norm.3
Though it has fallen on difficult times over the past 25 years, Canada’s shipbuilding and ship repair industry must be considered a vital strategic asset. This industry employs more than 14,000 highly skilled workers and creates the second highest paying jobs in the manufacturing industry, with salaries higher than those in the aviation and ‘high technology’ sectors. These facts are often overlooked because the major shipbuilding and ship repair activities must, by their very nature, occur in some of the smaller Canadian communities (e.g., St. John’s, Marystown, Halifax, Quebec City, Port Weller, Victoria, New Westminster, and Prince Rupert [Vancouver is the only notable exception]). While their economies pale in comparison to Montreal and Toronto, their contribution to the Canadian economy – either directly or indirectly – has a major impact on Canada’s overall economic situation, domestically and globally.
However, it is important to recognize the benefits of naval shipbuilding to Montreal, Toronto, Vancouver and each of the provinces. Naval shipbuilding includes extensive use of technology. This technology comes from companies all across Canada. Even when it comes from offshore, the Industrial Regional Benefits program ensures that every region receives investment in industry, technology and research. This creates more high paying jobs and stimulates the innovation required to survive in a knowledge-based economy.
Conclusion and Recommendation
The current situation with respect to the Joint Support Ship project is serious and deserves consideration by our government. There are two options: (1) cut capabilities and maritime commitments to meet the presently available funds; or, (2) increase the available funds so that Canada can acquire the needed number of vessels with appropriate capabilities. The essential nature of these ships and the age of our existing supply ships provide strong arguments to support the latter choice as the best for our country.
The capabilities of the JSS have been identified as strategic imperatives by recent governments. The Navy has further identified the need for a minimum of three ships to deliver those capabilities.
Three JSS ships are urgently needed by the Navy – ships that will support Canadian military operations worldwide – naval, air, and land operations. In addition, the JSS project will provide significant benefits to Canada’s economy, and the money spent by Canada will bolster all parts of our economy.
The situation now faced by the government should be looked on as an opportunity – an opportunity to deliver on the government’s “Canada First” Defence Strategy, an opportunity to maintain the Canadian posture in a segregated world, and an opportunity to strengthen the Canadian economy. The Navy League of Canada strongly urges the government to consider all aspects of this important project and trusts that, when this is done, the government will proceed with its plans to procure a minimum of three Joint Support Ships, without sacrifice in their operational capability.
1. For most warships, weapon and sensor systems are procured from offshore companies. In addition, even for the JSS, some systems – e.g., propulsion systems – will come from offshore suppliers.
2. Canada: Niagara Marine Group 1999
3. Cairns, P., Why Canada Needs a Shipbuilding Policy Too! (Canada: Unpublished 1999) 7