Steady as She Goes: Canada's National Shipbuilding Strategy Steaming Ahead

Canada undertook a monumental task a decade ago: once again building large military ships in Canada, to usher in the modernization of Canada's navy and coast guard.

Easy, right?

When called to meet this new challenge under the National Shipbuilding Strategy (NSS), major Canadian shipyards rose to the occasion. Tasked with the design and delivery of made-in-Canada naval vessels for the Royal Canadian Navy and Canadian Coast Guard, shipyards on both coasts scaled up their construction facilities, investing hundreds of millions of dollars.

They've also created thousands of jobs and generated billions in economic activity.

A new economic study conducted by Deloitte quantifies the benefits delivered to date by Seaspan Shipyards, the largest shipbuilding operation on Canada's west coast. Seaspan has contributed $5.7 billion to Canada's GDP, 7,330 annual jobs, $3.8 billion in labour income, and $1.4 billion in government revenues. The study forecasts an additional $20.7 billion to GDP and $5.9 billion in government revenues while sustaining or creating about 11,000 jobs annually and generating more than $13 billion in labour income over the next 12 years.

The lion's share of this comes through the government's investment in the National Shipbuilding Strategy. Seaspan's NSS work has created 5,321 jobs, contributing $3.9 billion in GDP and almost $1 billion in taxes paid to date. Another $4.3 billion in taxes and $16.5 billion in GDP contributions are expected through 2035.

Social benefits are also abundant. Seaspan Shipyards is in the top five percent of North American members in the “Green Marine” program and reduced its GHG emissions by 20 per cent from 2019 to 2021. We also have strong working relationships with 15 B.C. Indigenous communities and a multimillion-dollar training and development investment in a program led by the Musqueam, Squamish, and Tsleil-Waututh.

These jobs and economic benefits aren't just for coastal communities. Seaspan has delivered $2.4 billion in contracts to over 710 Canadian suppliers from coast-to-coast-to-coast, with two-thirds of them small and medium-sized businesses. Irving Shipyards on the East Coast are demonstrating the same dramatic national economic impacts and Davie in Quebec, the newest Tier 1 NSS shipyard addition, is expected to follow suit.

It has been a long time since Canada was a major shipbuilder. From being the world's fourth largest -naval shipbuilder in World War II, the capacity all but disappeared by the 1990s. The success of the NSS is years in the making with the support of governments of all political stripes. In little over a decade, Seaspan has invested $3.4 billion to modernize infrastructure, integrate advanced technologies, recruit and train workers, and establish significant partnerships with local Indigenous communities.

In an era of on-demand service, investing in Canada's future for decades to come is a test of patience. As with new investments in battery manufacturing that will take almost a decade to reach full operational capacity, significant upgrades for an entire marine industry take time to get right. These long-lasting investments have stood up a major Canadian industrial revival that can last for generations to come.

Domestic production is more important than ever as specialized ships, like Canada's new Polar Icebreakers, are needed to bolster Canada's sovereign capabilities and interests from the Arctic to the Indo-Pacific.

Of the 23 large (over 1,000-tonne) vessels in Seaspan's NSS portfolio, the 3,000-tonne CCGS Sir John Franklin was the first large vessel delivered in 2019. Seaspan completed the delivery of all three offshore fishery science vessels (OFSVs) as the first completed project under the NSS in 2020. Today, the first Royal Canadian Navy Joint Support Ship (JSS) is nearing completion, and the second JSS is underway. The Coast Guard's highly complex, multi-mission vessel, the Offshore Oceanographic Science Vessel is set to be launched ahead of schedule next year and we are hard at work on the design of the Polar Icebreaker and Multi-Purpose Vessels. With time and experience, lessons learned are delivering continual improvements and efficiencies in production.

Canadian shipyards big and small will also receive the ongoing maintenance, repair, and upgrade work for these ships, instead of relying on foreign shipbuilders. This means more jobs and more economic benefits across the country.

Canada's shipbuilding industry has now reached a steady state of production. The experience in Canada as well as other nations, shows it takes a full decade to restart an industry. This includes upfront investments, such as Seaspan's $215 million privately funded shipyard modernization and our training of thousands of skilled workers to reliably deliver Canada's next generation of marine capability.

There will still be hurdles to overcome, but as long as governments stay the course, Canada's naval modernization will be the most successful shipbuilding undertaking the country has seen since the Second World War. Rebuilding the national capacity to design and produce military-grade ships took time, but now Canadian shipyards are full steam ahead on modernizing Canada's Coast Guard and navy.

Long story short: the NSS is working as intended.

John McCarthy has been at Seaspan Shipyards for five years and was named CEO at Seaspan Shipyards in Vancouver in September 2022. John has over 37 years of program management, planning, operations, and I.T. experience in U.S. defence and international markets, shipbuilding, and heavy manufacturing.