Canada is botching defence by putting jobs ahead of military needs: James Cowan

We’re not very skilled in shipbuilding

James Cowan 4 Premium content image
(Photo: Paul Sancya/ Canadian Press)

(Photo: Paul Sancya/ Canadian Press)

National defence is among the most basic responsibilities of any country’s government. You can haggle about every other area of federal spending, but a government that can’t properly maintain its military is failing at a fundamental level. It is a carpenter that can’t hammer a nail. That is what makes Canada’s long history of botched military procurement so maddening.

It hasn’t been one defence minister, or one prime minister, or one party that has bumbled the purchase of jets, ships and trucks. This has been a decades-long problem that has wasted billions of dollars of taxpayers’ money and resulted in a military that is often ill-equipped for the task at hand. Prime Minister Stephen Harper’s government cannot be solely blamed for the woeful state of Canada’s military equipment; they can, however, be held to account for ignoring very sensible proposals to fix the problem.

The Conservatives’ ambitious plan to buy dozens of new navy and coast guard vessels may now be scuttled by rising costs. The price tag for a new icebreaker has doubled to $1.3 billion from $720 million; more than a billion has been added to an estimate for new combat ships—and officials warn the new $26.2 billion figure is just for “planning purposes.” But any planning on this project is disconcertingly fuzzy. For example, exactly how many combat ships are we buying for all these indeterminate billions? It was supposed to be 21, but Public Works now places the number at “up to 15.”And these ships are just one part of the troubled plan. Construction delays will mean an 18-month gap when the Canadian military will have zero functioning supply ships. Holdups at the Vancouver shipyard where the vessels are being constructed will also mean the aging icebreaker Louis St. Laurent—built in 1969—will have to remain in service until 2022, after undergoing $55 million in retrofits.

Never mind the fighter-jet program that quadrupled in cost, the squabbles with Sikorsky over delayed helicopters that might not work and the contract for new military trucks that was abandoned three minutes before its deadline.

Taken together, these cases clearly demonstrated the need for a new strategy, one that begins with rethinking the rationale behind these contracts. There’s a telling paragraph in the government’s status update on the combat ships. Industry analysts, it notes, estimate “the decision to build the ships here in Canada will generate approximately 15,000 jobs and $2.4 billion in annual economic benefits over the next 30 years.” This is the problem: the government’s military strategy is also an economic development strategy. It’s just not a particularly good one.

Many of the project delays associated with the shipbuilding strategy are rooted in the fact that no Canadian company has built a large military vessel in two decades. And despite winning the multi-billion-dollar contract for combat ships, plus receiving $304 million in financial support from the Nova Scotia government, Irving Shipbuilding still faces layoffs this year as it retrofits its facilities for the naval project.

Meanwhile, internal documents obtained by the Canadian Press suggest the ships would have been completed faster and at 10% lower cost if they were built overseas. The British Royal Navy recently paid $750 million for four supply ships built in South Korea, compared with the $3 billion that we are paying for two, according to J. L. Granatstein, a senior fellow at the Canadian Defence & Foreign Affairs Institute. If Canada is unprepared to allow open season on its military contracts, then it should at least do is accept bids from any shipyard in a country that enjoys a free trade agreement with us, as suggested by Ian Brodie, Harper’s former chief of staff.

Any change will require a shift not only in public policy, but public opinion as well. As it stands, governments find themselves in a double bind: voters punish them for bloated military contracts, but also for shopping these deals to foreign companies. Canadians need to recognize that using military procurement as economic stimulus is a disservice to everyone.

James Cowan is deputy editor of Canadian Business

4 comments on “Canada is botching defence by putting jobs ahead of military needs: James Cowan

  1. James Cowan is quite correct in stating that no shipyard in Canada has the expertise in building large military vessels and that we could have ships built at much lower cost outside of the country. However, doing so still leaves us without a viable ship building industry. The ship building industry has suffered from a cycle of feast and famine where good contracts are followed by long periods, possibly decades, of no orders at all. There has also been the typical Canadian situation of dividing the work among several ship yards in different regions of the country, though it looks like this time around the work will be split between Halifax and Victoria. We could retain the expertise in designing and building large ships if contracts could be spread out more evenly over time and only one shipyard kept in service. Unfortunately, it would be difficult to adopt such a strategy at this time as so many of our existing naval and coast guard ships have already been kept in service well beyond their expected service life.

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