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Saturday, August 23, 2008

Canadian shipbuilders can’t bring their bids in on budget. Is a “Buy Canada” policy still practical?

When the federal Conservatives want to bury news, they release it on a Friday evening when the members of the Ottawa press bureau are sharing the week’s gossip over drinks at their favourite pubs frequented by Hill staffers, lobbyist and fellow journalists.

We saw this tactic used recently with the release of the “Final Report On The Administrative Review Into The Security Incident Reported By Maxime Bernier - Classified Documents Left At A Private Residence.” The press release came out late in the afternoon on a Friday before an August long weekend, even though the report was finalized days earlier on July 16th.

The report revealed that Maxime Bernier was not, in fact, responsible for any significant security breach when he left Foreign Affairs briefing notes at his girlfriend’s house. The report vindicated Bernier, as much as that was possible, but the Conservatives did not want any more press on the matter.

On Friday at 8:30 PM (Eastern Time), the government used this tactic again. Public Works Minister Christian Paradis released news that the government is terminating two procurement processes for military ship building contracts being bid on by Canadian shipbuilders.

According to Minister Paradis, “the bid prices exceeded the anticipated costs.”

The government was looking for three new ships for the Canadian Forces and twelve new ships for the Canadian Coast Guard. “These vessels are a key priority of the Government of Canada. However, the government must ensure that Canadian taxpayers receive the best value for their money,” said Minister Paradis.

I admire this move by the Conservatives.

It won’t be a popular decision with nationalists who want to see the government build industrial capacity, especially when it concerns national security. It won’t be popular with the Marine Workers Federation of the CAW either.

Minister Paradis says the government still plans to adhere to its “Buy Canada" policy, but is unclear what will change in the ship building industry to make that possible under the current budget.

If all else fails, why not just outsource our ship building needs to Korea? They're the cheapest shipbuilders in the world.

Posted by Matthew Johnston on August 23, 2008 in Current Affairs | Permalink


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MJ- consider where most of the ships would be built in Canada. The supply ships would be built in Quebec or in New Brunswick. The Coast Guard vessels could be built in Ontario. Where do the Conservatives want to gain votes-Ontario,Quebec and the Maritimes. Yes, we have priced ourselves out of the market. As Well, in my experience, we are always trying to re-invent the wheel. A case in point would be the MCD vessels. They are good for very little and were built to bring work to depressed areas and to satisfy the aspirations of the Naval Reserve. I know that the press agents of the CF would oppose me on this. That is their job and a job that I was trained to do as well. Their rationalizations are nonsense. They know it and so do their superiors but they are committed to loyalty to their political masters and that is how it must be. Too bad, their political masters aren't worth it.

Posted by: DML | 2008-08-23 10:50:55 PM

DML, I would say that saying we are loyal to our political masters is not entirely correct, we are loyal to our country and the principles on which it is built.

Posted by: Ike | 2008-08-23 11:24:25 PM

I think DML means that the Military Press will be loyal to their masters even in the face of obvious BS.
And I like you approach Ike. Being loyal to your country is what a Patriot does. Being loyal to a dogma is what a "loyalist" does.
And I'd love to see more work being bid by Canadian Firms. But our dollar doesn't really buy Canadian talent without subsidies anymore...it's too weak and shallow.

Posted by: JC | 2008-08-24 7:34:42 AM

According to Minister Paradis, “the bid prices exceeded the anticipated costs.”
Posted by Matthew Johnston on August 23, 2008

Any chance the "anticipated costs" were unrealistic? Just wondering.

Posted by: The Stig | 2008-08-24 7:47:45 AM

Also a good point Stig

Posted by: JC | 2008-08-24 8:00:56 AM

For lots more on this subject, take a look at this post at "The Torch" and follow the links:

"JSS, Coast Guard patrol vessels: can't afford to build in Canada"


Posted by: Mark Collins | 2008-08-24 12:15:45 PM

Ships, unfortunately, are extremely expensive, and it is a 20th-century reality that shipbuilding in high-cost nations (read: most Western nations) has gone into steady, if not rapid decline. In the U.S., for instance, the Jones Act has restricted the type of ships that may carry domestic cargoes, but has done nothing to punish industrial inefficiency. As a result it is far more expensive to build a ship in the U.S. than in any other country in the world. Today the world's three top shipbuilders are all in the Far East.

So the answer to the question is "No": a buy-Canada policy is no longer practical in light of current conditions. And we have no one but ourselves to blame for it.

Posted by: Shane Matthews | 2008-08-25 8:15:08 AM

Today the world's three top shipbuilders are all in the Far East.
Posted by: Shane Matthews | 25-Aug-08 8:15:08 AM

They are all commercial shipbuilders. Unless the Coast Guard and Navy are looking at buying a container ship or an oil tanker they won't go to the Far East.

Posted by: The Stig | 2008-08-25 8:46:46 AM

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