By PETER CAIRNS
Shipbuilding Association of Canada is a trade association consisting of members that are for the most part competitors, that came together to solve common issues affecting all of them. Consensus is sometimes more than a simple matter because we have shipyards of many different sizes, as well as industrial marine members, all with somewhat different views on issues.
The federal government prefers to deal with associations as they provide an agreed upon industry recommendation, rather than the views expressed by individual companies. This is key and should not be underestimated, and is the principal reason why professions and industries have associations.
In 2000, the government commissioned four individuals – including myself – to study the shipbuilding industry and make recommendations on a way-ahead that was achievable. The National Partnership Project made thirty-six recommendations. One of the key recommendations was that all government ships should be constructed and repaired in Canada. This recommendation became the keystone for what we now know as the National Shipbuilding and Procurement Strategy (NSPS).
Now that we have had some initial success with NSPS, some people have asked me if there is anything more for the Association to do? My answer to that: “You bet there is”!
Below are some areas where the Association is involved:
I believe there is a strong role for the Association in support of NSPS. NSPS is being considered as a project that can result in shipbuilding becoming one of the primary industrial sectors in Canada. That will require shipbuilders of all sizes to work together with government to determine the goal and to advocate for success. That is one of the roles of associations.
A billion dollars of small ship projects will be tendered in the traditional way during the next twenty years. Is it possible to organize this so that the small shipyards do not experience the peaks and valleys that NSPS was designed to prevent for the bigger shipyards? Small shipyards need to be able to have some certainty in their lives, allowing them to plan for the future, and to be able to get help dealing with government. The Association will work toward reaching these goals.
With the lifting of the 25% tariff on certain classes of commercial vessels, the commercial shipbuilding industry needs attention. The downside of lifting this tariff is that some 19 Great Lakes ships will be or have been built in foreign yards, with the economic benefits of this construction lost to Canada. The Association will work toward mitigation of this economic loss.
The Structured Financing Facility (SFF) is due to run out in 2013. There is no indication that this fund will be topped up. It is our position that this fund should be topped up and SFF continue for at least another five years. The Association will work toward achieving this.
Things could change dramatically for commercial shipbuilders if a leasing industry could be established. This would require ships to be exempt from the Specified Leasing rules as are cars, trucks and trains. The Association will advocate for this.
Finding and training a skilled workforce is essential if NSPS is to be a success. The association is looking at trade standards that are used in the aviation sector to determine if there are savings of time that would result from adoption of similar practices. The Association will investigate this.
Environmental standards are now driving the selection of equipment we put into ships and how we build them. These standards are most stringent with regard to air emissions, overboard discharge and disposal of waste. The Association is investigating the role of the Green Marine organization and how it could benefit shipbuilders.
Research and Development (R&D) is another area of importance. At present there is not any R&D in Canada devoted directly to shipbuilding issues. The Association has been working informally with Defence Research and Development Canada and others to determine if there is a role for a program similar to the U.S. Navy’s National Research Plan, which allows research costs to be shared. Small shipyards might find a significant benefit in this type of plan. The Association will investigate this.
While few give it much thought, free trade that was once only a possibility is now all around us. We played a roll in the free trade agreement with the European Free Trade Association. We were able to achieve long tariff phase-out times but it is almost certain that this will not happen again. Carve-outs are out of the picture completely. Free trade has been of little benefit to shipbuilders, having been excluded from the benefits of NAFTA, and it is hard to determine what direct benefits, if any, will accrue to the shipbuilding industry in free trade with the European Union. That said, the industry has to prepare itself for free trade with Europe. The Association will advocate for programs that will make the industry more competitive.
Canada builds good ships. One of the reasons for this is the equipment that we put inside them. Our systems integrators, platform integrators and equipment suppliers are as good as any. NSPS is the conduit for them to once again show their skills to the world.
An association is only as good as its members. The Shipbuilding Association is always looking for members. We need your experience, your skills and your ideas. I invite you to give us a call.