Shipbuilding industry pushes back as federal government shops for used icebreaker

The federal government is in the market for another used icebreaker that could be converted for use by the Canadian Coast Guard on the Great Lakes — much to the dismay of shipbuilders across the country.

A request for proposals to acquire an existing light icebreaker was posted on the government's procurement website in mid-September.

The timing is interesting. Federal decision-makers have known for five years that the coast guard needs such a vessel for the region.

The request for proposals — which closes at the end of October — was posted as U.S. lawmakers began to push bipartisan legislation through Congress to strengthen the U.S. Coast Guard's capacity to break ice and keep commerce flowing on the Great Lakes.

The plan for Canada to buy a used icebreaker follows a separate decision by Transport Canada to purchase a used ferry from Spain on an emergency basis.

Build them here, says industry

The Canadian Marine Industry and Shipbuilding Association (CMISA), which represents most of the marine suppliers and shipyards across the country, said both decisions represent a loss of domestic jobs and at least $250 million in federal spending that could have gone into a Canadian economy hard hit by the coronavirus.

"We're of the strong belief that vessels such as light icebreakers can and should be built in Canada," said Colin Cooke, president and chief executive officer of the shipbuilding association.

"We have the capacity. We have the skilled trades. We have the expertise, the technical expertise. We have the shipyards. And that was what the point of the National Shipbuilding Strategy was all about."

That shipbuilding strategy is supposed to direct government work to Canadian shipyards. Cooke said the plan to purchase an existing icebreaker and the deal to acquire a former Spanish ferry would both be unacceptable in normal times — but they're even less acceptable now.

"We are in a COVID time when we're looking for all sorts of ways to make sure that people are employed, that businesses are able to survive — I won't say thrive, I will say survive — through the lockdowns caused by this pandemic," he said.

Public Services and Procurement Canada was asked for comment last Thursday but did not respond.

The tender for the light icebreaker, posted online Sept. 18, describes the purchase as a necessary interim step for the coast guard to "bridge the gap while awaiting the delivery of dedicated new vessels."

Significantly, the request for proposals noted that the need for such a ship was identified five years ago — around the same time a comprehensive analysis warned that the coast guard icebreaking fleet was in dire straits and in need of immediate replacement.

"In 2015-16 the CCG identified a requirement for interim icebreaking capabilities to fill gaps in capacity resulting from ships being temporarily withdrawn from service" for refit and life extension, said the tender.

Two years ago, the Liberal government concluded a deal worth $827 million with Chantier Davie of Levis, Que., which operates the Davie shipyard, to refit three medium-sized commercial icebreakers for the coast guard.

Used icebreakers could be scarce

Tim Choi, a University of Calgary shipbuilding expert, said this recent tender suggests the federal government is operating on the flawed assumption that there is an abundance of used icebreakers on the market.

The deal with the Davie shipyard was an anomaly and federal officials "got lucky" last time because there happened to be three vessels available, he said.

Choi said he believes the federal government isn't likely to be so fortunate this time: his research suggests there may be only one light icebreaker out there that would fit in the bill — in Finland — and it's not clear the Finns are ready to part with it.

"There are very few requirements for a vessel like that outside of Canada and the United States in the Great Lakes, St. Lawrence region," said Choi. "It's not like there's a used car lot where you can just go out and buy these things."

The shipbuilding association said it can make a strong case for a fast-track build in Canada. Choi said he believes procurement services may be forced in that direction anyway because of market conditions.

In mid-September, three U.S. senators — Tammy Baldwin (D-WI), Todd Young (R-IN) and Gary Peters (D-MI) — introduced the Great Lakes Winter Commerce Act.

The bipartisan legislation is expected to codify the U.S. Coast Guard's icebreaking operations on the Great Lakes and, more importantly, increase the size of its fleet.

"Inadequate icebreaking capacity in the Great Lakes is costing us thousands of American jobs and millions in business revenue," said Baldwin in a statement. "We must boost our icebreaking capacity in the Great Lakes to keep our maritime commerce moving."