Minister's Statement on National Shipbuilding Procurement Strategy

Minister of Public Works and Government Services and Minister for the Status of Women

Ottawa, Ontario
October 19, 2011

Check against delivery

Thank you all for coming.

I welcome today's decision made by the National Shipbuilding Procurement Strategy's Secretariat.

Today is a historic day.

It started with our government's decision to build our ships for the Navy and Coast Guard right here in Canada.

Today, all regions of Canada are winners in this truly national strategy that will result in 75 million person hours of work and 15,000 jobs over the next 30 years.

Today, our Government is delivering on our promise to create good jobs across Canada and provide much-needed ships for the Canadian Navy and the Canadian Coast Guard, all through a transparent and arm's-length process.

This is a promise made and a promise kept.

This is an investment in Canada and Canadians.

Over a year ago, our Government made the strategic and historic decision to support the Canadian marine industry, to revitalize Canadian shipyards and to build ships for the Navy and Coast Guard right here in Canada.

The strategy, which emerged from consultations with the Canadian shipbuilding industry, is about using Canadian shipyards to meet our shipbuilding requirements.

Shipyards were consulted on the development of the strategy, the procurement process, the evaluation methodology and the umbrella agreements.

This innovative strategy brings predictability to federal ship procurement and eliminates cycles of boom and bust, providing benefits to the entire marine industry. Before the Harper Government made the decision to build ships for Canada in Canada, we were the only NATO country not to have a strategic relationship with our own shipyards.

This strategic relationship with Canadian shipyards will help us deliver on our commitment in the Canada First Defence Strategy, and enable us to provide our Navy with the modern ships they need to defend Canada's interests at home and abroad.

This is a win for Canada because we are revitalizing our shipbuilding industry and making it internationally competitive like never before.

We know that this unprecedented investment by the Government will create significant industrial and regional benefits in communities across Canada.

Canada's marine industry is a key economic driver and the lifeblood of many communities across the country.

The benefits of this strategy to the Canadian economy are staggering.

During the bidding process, as part as their "value propositions", shipyards had to demonstrate how they will distribute the work for these contracts.

This will result in high quality jobs for decades to come. Some external studies have estimated that up to 15,000 jobs will be created over the next 30 years.

This is part of our efforts to find new and innovative ways to improve and leverage procurement that are both good for Canadians and good for our economy.

Beyond providing our Navy and Coast Guard with the ships they need, the Strategy focused on doing procurement in a smarter and more effective way.

Another area where we have taken an innovative approach with the NSPS is in the area of governance and oversight.

We set out to ensure a transparent and arm's-length process led by the Shipbuilding Secretariat who evaluated the bids and determined the winners based on the merits of their proposals. While the federal cabinet made the historic decision to build our ships in Canada and not buy them offshore, the cabinet was not involved in the evaluation of the bids.

It was our intention at the outset to ensure that the NSPS competition would be run through a process that is completely at arm's length of politics.

I met with the Fairness Monitor and he has delivered his final report stating clearly that "… decisions are made objectively, free from personal favouritism and political influence, and encompasses the elements of openness, competitiveness, transparency and compliance."

This procurement was under the careful watch of two high-level interdepartmental governance oversight committees, a fairness monitor (Knowles and Hill International), international third-party benchmarking experts (First Marine International), and an independent validation and oversight firm (KPMG).

The National Shipbuilding Procurement Strategy's Secretariat led the way on this unique and unprecedented process. They have held extensive consultations with industry, including the shipyards, every step of the way.

In fact, input from the industry and the shipyards helped shaped the entire process.

The issues management and dispute avoidance and resolution processes were all designed to eliminate the requirement to engage in lobbying.

The many levels of oversight and reporting were in place to ensure that the bidders and the various regions of the country can have full confidence in the fairness of the process.

Our Government's commitment to ensuring fairness, openness and transparency is clear.

The success of the shipyards depended 100% on the merits of their proposals.

Most importantly, regardless of who received the contract, this policy will create thousands of jobs in all regions of the country through the many sub-contracting opportunities.

The National Shipbuilding Procurement Strategy illustrates the suite of changes we're implementing with regards to procurement and demonstrates how we're working to improve it each and every day.

Industry told us that long-term planning and stable funding were essential to business growth, and we've followed through with a commitment to both.

Congratulations to shipyards Irving Shipbuilding Inc. and Vancouver Shipyards Co. Ltd.

It is important to note there is still the opportunity to compete for construction of over 100 smaller vessels that have been set aside. The shipyards selected today are not allowed to bid on these contracts.

In addition, there is millions of dollars a year in repair and refit work in this strategy that shipyards across Canada can also compete for.

Again, we welcome the selection made by the NSPS Secretariat and we thank them for all of their hard-work and for leading an arm's length process to evaluate the bids and determine the winners based on the merits of their proposals.

I would also like to thank the shipyards who responded to our Request for Proposals and who have committed a great deal of time and effort to this process.

I am proud to be part of a Government delivering on a promise to create good jobs in a variety of industries across Canada and provide much needed ships for the Canadian Navy and the Canadian Coast Guard, all through a transparent and arm's-length process.

Our Government's top priority is the economy. With the economic recovery still fragile, we will continue to take action to protect and create jobs in Canada.

Today's news is a promise made and a promise kept for all Canadians.

Thank you.