BY R. BRUCE STRIEGLER
Over 600 business and trades people assembled on May 23, at the Western Canadian Shipbuilding Summit in Vancouver. They heard speakers from government and industry outline opportunities, steps and procedures for small- and medium-size businesses to provide technical, mechanical or other business service support to the two Canadian shipyards building $33 billion worth of new Canadian combat and non-combat vessels. On October 19, 2011, the federal government’s National Shipbuilding Procurement Strategy (NSPS) selected Vancouver’s Seaspan Marine Corporation to build seven non-combat ships worth $8 billion, while Irving Shipbuilding Inc. of Halifax was awarded a $25 billion contract for combat vessels.
Hosted by Western Economic Diversification Canada and Seaspan Marine Corporation, the event was hailed by Lynne Yelich, Minister of State for Western Economic Diversification as “One of the many ways we are connecting small- or medium-size businesses with new business opportunities.” Minister Yelich said, “This event is part of Western Canada’s Shipbuilding Action Plan, and part of our government’s priority of creating jobs, growth and long-term prosperity.” At the time of the award announcement in 2011, the B.C. government said that, over the next eight years, more than 4,000 new jobs would be created in B.C. as a result.
Brian Carter, President, Seaspan Shipyards, was enthusiastic, saying, “We’re proud to partner with Western Diversification on this event. We look forward to building relationships with the supplier community, as well as working with other government departments and agencies across Canada.”
Opening the session, Vice-Admiral (Ret.) Peter Cairns, President of the Shipbuilding Association of Canada, said, “We’re surrounded by three oceans, so Canada and its economy float on salt water.” He highlighted the impacts and benefits of NSPS, pointing out that the program would increase investment, research, development, new technology and workforce renewal.
Securing supporting NSPS contracts
The conference heard from a number of federal and provincial government representatives including Public Works and Government Services Canada and Industry Canada. Gerry McGee, Director, NSPS Secretariat said the Office of Small and Medium Enterprises (Public Works and Government Services) supports these businesses to obtain government contracts by working to reduce barriers and simplifying requirements with six offices across the country. He points out that up to 80 per cent of government contracts are sourced through this office, through its website, buyandsell.gc.ca, and recommended that interested NSPS subcontractors or those who want to be suppliers should register on the website.
Mr. McGee told the meeting how the Canadian government created the Industrial and Regional Benefits (IRB) policy to ensure that Canadian industry benefits from government defence and security procurement. The IRB policy is designed to ensure that business activity equal to 100 per cent of the value of the contracts is generated in Canada by companies who win prime contracts.
Conference presenter Joe Masi, Manager, Corporate Tax and Integrated Operations at British Columbia’s Ministry of Finance, explained that, in addition to B.C.’s regular training tax credit for employers, the British Columbia Budget for 2012 introduced new training tax credits for employers with apprentices in the B.C. shipbuilding and ship-repair industry. The new policy means that eligible employers can receive a refundable tax credit of 20 per cent of wages paid per year, up to $5,250 per apprentice in the first 24 months of an eligible apprentice program, with similar credits based on an apprentice completing higher training levels. These credits are enhanced by 50 per cent for those who are First Nations or individuals with disabilities. Mr. Masi says that the department is still awaiting final regulations on the program.
Commenting on the large attendance at the shipbuilding summit, Bill Brown, Director of Development Services, Township of Esquimalt, said that since the Graving Dock was in Esquimalt, the town had an enormous stake in the Seaspan work. “We want to be on the cutting edge of all opportunities associated with both the NSPS shipbuilding work, and with all other shipbuilding and repair work. This event is a tremendous help in getting a line on all government programs and in accessing them.”
The international influence on shipbuilding
Marcel LaRoche, Marine Manager Western Canada, Lloyd’s Register Canada, told conference delegates, “Over 90 per cent of the world’s cargo-carrying tonnage is covered by classification design, construction and through-life compliance rules and standards set by the 13 Member Societies of the International Association of Classification Societies (IACS).
He explained, “Many ships are now built under delegation, which is what we may see with a lot of the projects in Canada. Where historically shipbuilders would be dealing with Transport Canada with the certification of equipment, components and materials, builders will now likely be dealing with the classification societies registered as Recognized Organizations in Canada. Essentially, what we’re focussing on is to ensure the ships sailing the world’s oceans are sound, operating properly and built safely.”
Conference attendee Richard Brinkert, Business Development Manager, Pacific Customs Brokers and Pacific Overseas Forwarding Inc., found the forum an opportunity to connect with different suppliers and the shipbuilders themselves, to investigate opportunities to help companies import goods, and to facilitate transportation or customs clearance issues. “Even with the government’s IRB policy there will be parts or components to be imported which different suppliers will need to construct these ships. We’ve learned a lot today about the shipbuilding industry.”
Laura Dempsey, who handles sales for electrical wholesaler E.B. Horseman & Son, says, “We have relationships around the province with different contractors that are related to the marine industry. We have done a small amount of work for the Seaspan group, but we’re looking forward to really diving into the marine industry in a larger way. Learning about IRB and different government websites, seminars and round tables over the next year will definitely push us in the right direction.”
Conference attendee Leonard Laboucan, aboriginal training advisor to the First Nations Employment Society, explained that, while it was up to each of the three First Nations in the area to negotiate directly with Seaspan on such things as labour and training, there was a need for an organization to take the lead. “We have some resources, but partnerships are what the future is about, so we’re here today to identify how we can partner and with whom.”
The Western Canadian Shipbuilding Summit was a major step in the implementation of Western Canada’s Shipbuilding Action Plan, highlighted in the government’s Economic Action Plan of 2012. Western Economic Development Diversification Canada will host upcoming Shipbuilding Bootcamps to help business navigate government procurement policy, as well as Supplier Development Tours to educate and connect businesses with the shipbuilding industry.