Procurement – Navy

National Shipbuilding Strategy

Key Facts

Details

• On June 3, 2010, the Government announced Canada's National Shipbuilding Procurement Strategy (renamed the National Shipbuilding Strategy in March 2016).
• In 2011, the Government selected Seaspan's Vancouver Shipyards and Irving Shipbuilding Halifax Shipyard for the construction of large ships.
• In February 2012, the Government of Canada signed long-term agreements, referred to as umbrella agreements, with the selected shipyards.
• The National Shipbuilding Strategy Combat Package, which includes the Arctic and Offshore Patrol Ships and the Canadian Surface Combatants (replacements for the frigates and retired destroyers), will be built by Irving Shipbuilding.
• The National Shipbuilding Strategy Non-Combat Package, which includes the Joint Support Ships for the Royal Canadian Navy, science research vessels, and Multi-Purpose Vessels for the Canadian Coast Guard will be built by Vancouver Shipyards.
• In the context of the COVID-19 pandemic, there has been sustained media and Parliamentary interest in the potential for delays to the timelines for major shipbuilding projects under the National Shipbuilding Strategy.
• During this time, we are working in close collaboration with our industry partners to keep our respective workforces safe, while still making progress on these important naval projects.

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Canadian Surface Combatant

Key Facts

Details

Canadian Surface Combatant Project

• Canada's new class of warship – the Canadian Surface Combatant – will replace both the retired Iroquois-class destroyers and the Halifax-class frigates, one for one. This single class of ship will be capable of meeting multiple threats on the open ocean and the coastal environment.

·  The new warships will be able to conduct a broad range of tasks, including:

• In February 2019, the Government announced that Irving Shipbuilding had contracted Lockheed Martin Canada to provide the design and design team.
• Canada is now working with Irving Shipbuilding and Lockheed Martin Canada to evolve the selected ship design and systems integration in preparation for build.
• Early in 2019, Alion and Navantia, the two non-selected bidders on the Canadian Surface Combatant Request for Proposals filed for judicial reviews asking the Federal Court to set aside the decision that Lockheed Martin Canada was the selected bidder. In November 2019, Alion discontinued its applications for judicial review. The Department of Justice has carriage of the ongoing matters, which should not be publicly discussed as they are before the courts.
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  • Delivering decisive combat power at sea;
  • Supporting Canadian Armed Forces, and Canada's allies ashore;
  • Conducting counter-piracy, counter-terrorism, interdiction and embargo operations for medium intensity operations; and,
  • Delivering humanitarian aid, search and rescue, and law and sovereignty enforcement for regional engagements.

Recent Media Interest In Potential Delays

• In March 2020, media reported that Irving Shipyard was running at half capacity with around 650 people working at the shipyard and 300 remotely due to the COVID-19 pandemic.
• The article reported that any impacts on major shipbuilding projects, including the Canadian Surface Combatant, will ultimately depend on what stage the project is in, with less effect for those in design and requirement phases and more impact on projects in the midst of construction.

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Arctic and Offshore Patrol Ships

Key Facts

Details

Recent Media Interest in Potential Delays

• In March 2019, media reported that Irving Shipyard was running at half capacity with around 650 people working at the shipyard and 300 remotely due to the COVID-19 pandemic. The article went on to speculate that any impacts on major shipbuilding projects, including the Arctic and Offshore Patrol Ships, will ultimately depend on what stage the project is in, with less effect for those in design and requirement phases and more impact on projects in the midst of construction.

Arctic and Offshore Patrol Ships Project

• Strong, Secure, Engaged committed to the acquisition of five to six Arctic and Offshore Patrol Ships. In November 2018, the Government of Canada announced a decision to acquire a sixth vessel.
• These vessels will be able to perform a wide variety of tasks, including:
  • Surveillance operations of Canadian waters;
  • Support of sovereignty operations;
  • International operations;
  • Humanitarian assistance, emergency response and disaster relief; and
  • Search and Rescue.
• The Arctic and Offshore Patrol Ships will operate in the Arctic between June and October, providing a greater and longer Canadian Armed Forces presence in the North.

Current Status

• HMCS Harry DeWolf is the first of its class. Production challenges, typically seen with a first-of-class vessel, delayed the delivery of the first ship from 2018 to 2020.
• The shipbuilder has learned lessons from the build of the first ship that will help ensure efficiencies in the construction of the subsequent ships. The schedules for these following ships will therefore be easier to plan.
• Out of the total of six ships, the first one has been delivered and the next three are in various stages of production.

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Joint Support Ships

Key Facts

Details

• The two new Joint Support Ships are intended to replace the Navy's Auxiliary Oiler Replenishment vessels. They will provide at-sea support to naval task groups, limited sealift capabilities, and support to operations ashore.
• In 2013, after a rigorous interdepartmental selection based upon affordability, capability, and risk, National Defence selected a design for its Joint Support Ship project that offers the best value to Canada.
• Public Service and Procurement Canada selected Seaspan's Vancouver Shipyards as the prime contractor to build these vessels for the Navy.
• In June 2018, this Shipyard started the construction of the first supply ship. It is expected to be delivered in 2023. Construction of the second supply ship is scheduled to begin in 2021.
• A $2.4 billion contract for full-rate construction of the JSS was awarded to Seaspan Vancouver Shipyards in June 2020. This contract will build on the ongoing construction of the first ship's early build blocks, and will progress to full-rate construction of the remaining blocks.

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Interim Supply Ships (iAOR)

Key Facts

Details

The MV Asterix

• The premature retirement of the Royal Canadian Navy's remaining supply ship, in 2016, combined with the operational delivery dates of the new Joint Support Ships, in 2023-2025, has resulted in a capability gap.
• To help bridge this gap, in 2015, the Government of Canada entered into a Provision of Service Contract with Project Resolve Inc, which later became Federal Fleet Services, for the conversion of a commercial container ship into an interim supply vessel – the MV Asterix. The vessel commenced service in support of the Royal Canadian Navy on January 28, 2018.
• The MV Asterix is operated by Federal Fleet Services and is crewed by Canadian civilian mariners. A limited number of Canadian Armed Forces personnel are deployed as mission specialists.
• Since it became operational, the MV Asterix has supported numerous deployments and exercises at sea.

Request for the Obelix

• Prior to the last election Davie Shipbuilding was making the case to convert a second commercial vessel – the Obelix. Furthermore, the Bloc Québécois and the Conservative Party of Canada advocated at the time for the procurement of a second interim supply ship from Davie.
• The Parliamentary Budget Officer has previously estimated the cost of a second interim supply ship to be around $607 million. This costing was requested by the Conservative Party of Canada as part of its larger platform costing during the last election period.

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Modernization of Victoria Class Submarines

Key Facts

Details

• Canadian submarines deliver a world-class, force-multiplying deterrent effect as well as an unmatched sovereign defence and security capability.
• These submarines are capable of covertly monitoring evolving situations at home and abroad.
  • At home, submarines provide critical, sovereign force protection capacity for our sea-based forces when required.
  • Abroad, these submarines can conduct "indications and warnings" and vital joint-targeting information, weapon delivery, or Special Operations Force insertion.
• The decision to modernize remains the most effective means of ensuring continued submarine operations for the Royal Canadian Navy into the 2030s.
• The Victoria-class Modernization project will focus primarily on enhancing three distinct capabilities:
  • Habitability – to improve habitability and deployment conditions onboard Victoria-Class submarines;
  • Joint Force Capability – position the Victoria-Class submarines to contribute meaningfully to joint operations ashore; and
  • Survivability – to ensure the survivability of the Victoria-Class submarines against an evolving complex threat in an ever changing battle space.
• The Victoria-class modernization project will provide the capability enhancements required to keep the submarines operationally relevant against evolving threats in the future operating environment.

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Halifax-Class Modernization and Frigate Life Extension

Key Facts

Details

• The Halifax-class multi-role patrol frigates were commissioned between 1992 and 1996 and have become the backbone of the Royal Canadian Navy. They can deploy anywhere in the world, either independently or with NATO or individual allied nations.
• The modernized Halifax-class frigates will serve as a bridge to the future fleet and, along with Harry DeWolf-class Arctic and Offshore Patrol Vessels, Kingston-class Maritime Coastal Defence Vessels and Victoria-class submarines, will allow the Navy to continue to deliver on its core missions until the arrival of the Canadian Surface Combatants.
• The modernization and refitting project includes upgrades such as:
  • a new Combat Management System
  • a new radar suite
  • an internal communications system upgrade
  • a harpoon missile system upgrade (surface-to-surface)
  • a multi-link system
  • new electronic warfare systems
  • modifications to the 57 mm naval gun
  • enhanced capability to employ the Evolved Sea Sparrow Missile (surface-to-air)
  • a new Integrated Platform Management System offering better damage control
  • modern electronic and machinery control
  • other preventive, corrective and mid-life maintenance activities
• Canadian companies involved in this program include:
  • Lockheed Martin Canada (Combat Management System)
  • Irving Shipbuilding Inc.'s Halifax Shipyard (upgrade work on east coast)
  • Seaspan's Victoria Shipyards Co Ltd. (upgrade work on west coast)

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Maritime Helicopter Project

Key Facts

Details

• This project has a phased approach for the gradual introduction of capabilities for the 28 Cyclone Helicopters, called a "blocking strategy" as follows:
  • Fiftheen "Block 1" helicopters were formally accepted between 2015 and 2018 and are being converted to the final "Block 2" configuration;
  • Deliveries of the "Block 2" helicopters started in April 2018.  As of October 2020, sixteen "Block 2 helicopters" were delivered, including some converted from "Block 1" and the helicopter lost in April 2020 during an operation in Greece; and
  • Currently, the total number of Canadian owned Cyclone Helicopters is 21.

CH-148 Cyclone Helicopter Accident

• On April 29, 2020, a Canadian Armed Forces (CAF) CH-148 Cyclone operating from HMCS Fredericton was lost at sea while it was returning to ship following an exercise as part of the Standing NATO Maritime Group 2 in the Mediterranean.
• Directorate of Flight Safety initial report on the accident was released June 8, 2020, and continues to investigate aircraft systems and human factors.
• The US Navy assisted the CAF with specialized equipment and personnel during the search and recovery of human remains and the helicopter. Efforts led to the recovery of human remains and of critical equipment for the investigation. This is in addition to the flight data and voice recorders that had been previously recovered from the crash site. All the equipment recovered is undergoing analysis in Ottawa and Gatineau.

Activities to Date

• The Commander of the Royal Canadian Air Force declared Initial Operating Capability in June of 2018. Since then, CH-148 helicopters have been supporting domestic and international operations continuously.
• The Maritime Helicopter Training Centre was handed over to the Royal Canadian Air Force in July 2018.
• Twenty one Cyclones have been delivered to 12 Wing Shearwater, Nova Scotia since June 2015. Out of that number, five are currently with Sikorsky for upgrades to the Block 2 configuration.

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Naval Large Tug

Key Facts

Details

• The Royal Canadian Navy's mission is to operate and maintain a combat effective and multi-purpose maritime force. In order to achieve this mission, the RCN requires efficient naval tug services to help move, maintain, and train its fleet if it is to control events at sea, to take independent sovereign action when necessary, and to contribute to joint and combined combat operations when required.
• As part of the National Shipbuilding Strategy (NSS), the four new naval large tugs will support and enable warship movements, maintenance and training. They will also provide afloat harbor fire protection, allowing the RCN to replace its five current Glen tugs and two fireboats.

Project Delays

• While the naval large tugs were based on an existing in-service design, they required some changes to ensure they meet Transport Canada and RCN operational requirements.
• These requirements required verification during an inspection and final design review before construction could start, which took longer than expected.
• This further affected project timelines as trials for the first tug will have to be conducted when the St. Lawrence River ice conditions allow.
• As a result of these impacts we now expect delivery of the first two tugs in 2022, while delivery of the last two tugs in 2023 remains on track.

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Point Defence Missile System Upgrade

Key Facts

Details

• The Halifax-class frigates have formed the backbone of the Royal Canadian Navy and have been deployed in support of domestic and international operations since they entered service in 1992.
• These frigates defend themselves and other ships under their protection against a variety of threats that may come from the air, surface, or underwater.
• Since the frigates entered service, the outer layer of the Halifax-class defensive capability has been a Point Defence Missile System (PDMS) based on the SeaSparrow family of missiles.
• The objective of the Halifax-class Point Defence Missile System Upgrade project is to develop and acquire the upgraded missile that forms the basis of the Evolved Sea Sparrow Missile Point Defence System, fitted in the Halifax-class ships.
• This new generation missile will sustain the ships' ability to defend against current and future threats originating from surface, sub-surface, air and land-based platforms, and ensure they can continue executing their roles and core missions.
• This project received project approval in Nov 2014, with an associated budgetary envelope of $802 million plus taxes. It is currently on time and on budget.

Activities to Date

• Payments and activities have been performed in the Definition phase up to and including 2018.
• Payments have been issued to support NATO Sea Sparrow Block 2 Production for US fiscal year 2018 through US fiscal year 2020, with partial payments made US fiscal year 2021.
• Development activities for the software integration into the Halifax-class Combat Management System is ongoing.
• Initial phase of shipboard testing was successfully completed.

Funding Status

• The Point Defense Missile System Upgrade project was previously approved as a Vote 5 Capital Project. However, as missiles cannot be capitalized, and to align with Treasury Board Secretariat's common definition of a capital expenditure, a vote transfer from Vote 5 to Vote 1 starting in 2020-21 was actioned in the 2020-21 Annual Reference Level Update (ARLU).

Location

• The programme is managed by the NATO SeaSparrow Project Office, located in Arlington, Virginia and involves a consortium of 12 international participants. Equipment will be installed and fielded onboard ships in Halifax, N.S. and Esquimalt, B.C.

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Underwater Warfare Suite Upgrade (UWSU)

Key Facts

Details

• The Halifax-class frigates are the backbone of the Royal Canadian Navy and have been deployed in support of domestic and international operations since they entered service in 1992.
• These frigates defend themselves and other ships under their protection against a variety of threats that may come from submarines, torpedoes and underwater weapons in a wide range of maritime environments.
• The UWSU project involves the modernization of the sensor suite and processing systems for anti-submarine warfare on Halifax-class ships. It will deliver an integrated upgraded system that replaces the current towed array sensor and Sonobuoy Processing system, adds additional active intercept sensors, and improves the processing and transmission control system of the existing hull mounted sonar. The UWSU project will reinstate a tactical advantage over submarine/torpedo threats and gain improved survivability.
• This modern underwater suite in the Halifax-class will sustain the ships' ability to defend against current and future threats, ensure they can continue executing their roles and core missions and enable the Royal Canadian Navy to meet GoC defence objectives in all maritime environments.

Activities to Date       

• The Underwater Warfare Suite Upgrade project is achieving project objectives, notably:
  • Treasury Board implementation approval was received 14 June 2018;
  • Contract Award occurred 28 June 2018;
  • Project Kick-off occurred in September 2018;
  • System Requirements Review occurred in November 2018;
  • Preliminary Design Review occurred in July 2019; and
  • Critical Design Review summer/fall 2020.
• The project is currently in implementation.

Benefits to Canadians

• The Industrial and Technological Benefits (ITB) Policy of Canada's Defence Procurement Strategy (DPS) applies to this project. Canada will receive ITBs equivalent of 100% of the contracted value for both the acquisition and In-Service Support.
• The majority of this work will occur in Canada, creating and maintaining about 120 highly skilled jobs while supporting the continued growth and competitive advantage of Canadian sonar and acoustic industrial capabilities.

Location

• Ontario (Ottawa, Cornwall) and Nova Scotia (Dartmouth, Hackett's Cove).

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