Building ships here worth the cost: DND
OTTAWA • Canadians don’t have to look any farther than the navy’s troubled submarines to see the advantage of building warships here, says the head of military procurement at National Defence — even if it costs more.
Many taxpayers may have felt sticker shock last month when the Trudeau government’s new defence policy promised 15 new ships to replace the navy’s frigates and destroyers at a cost of around $60 billion.
It represented a dramatic increase from previous estimates the ships would cost between $26 billion and $40 billion, and confirmed its place as the single largest military purchase in Canadian history.
Critics of the shipbuilding plan have long argued that the government could save money by either outsourcing abroad, or buying a complete ship from the U.S. or another ally.
A recent report by the parliamentary budget office has suggested building the ships in Canada would add about 16 per cent to the cost of the new warship fleet.
The Liberals, and Conservatives before them, have countered that building warships and other vessels here will help create a vibrant Canadian shipbuilding industry.
But Patrick Finn, assistant deputy minister of materiel at National Defence, says it also means the navy won’t have to rely on foreign companies to support the new ships.
In an interview, Finn said one of the reasons Canada has had such a hard time getting its four submarines up and running is a lack of spare parts and technical support.
The submarines were purchased used from the U.K. in the 1990s, by which point many of the British companies involved in their construction had moved on to other projects.
“We couldn’t get this spare part, this gasket, this piece, this item for this valve block, and it was crippling us,” said Finn, a former rear-admiral who previously served on submarines.
That meant National Defence had to spend years building up an industry to support the submarines, a situation the government hopes to avoid with the new warships.
Another benefit to building in Canada, Finn said, is that the much of the money spent to pay workers’ salaries in Halifax and other places will be recouped through taxation.
“All the dockyard workers get a salary, and they all pay income tax. They go downtown and buy things or go to restaurants, and the people who work at those places pay income tax,” he said.
“When we go overseas, we don’t get that benefit.”
Some of the world’s largest defence and shipbuilding companies are drawing up proposed designs for Canada’s next warship fleet, with submissions due next month.
The winning design will be selected next year, at which point work will begin in earnest on preparing for the start of construction in Halifax between 2019 and 2021.
Finn also defended the Trudeau government’s plan to hold off on a competition to replace Canada’s aging CF18 fighter jets until at least next year, despite calls from experts to launch it now.
Those experts include one of Finn’s predecessors as assistant deputy minister of materiel, Alan Williams, who has accused the Liberals of needlessly dragging their feet on the competition.
“I hear people say this, but I’ve lived enough of the complexity of this that 18 to 24 months (are) needed,” Finn said, citing the need to consult with industry and ensure the process is safe from legal challenge.
“When people tell me that I can put a (request for proposals) out in a year, maybe if we want to ignore everybody and set everything aside. Does it increase the probability of a failed procurement? Probably.”