Question Period Note: Status of defence procurement projects

Due to COVID-19, several defence procurement projects have halted or slowed, including the construction and maintenance of ships.

• Our government is taking strong action to protect our economy, jobs, and the health and safety of Canadians during the global COVID-19 outbreak
  • Canada will continue to monitor the situation, analyze potential impacts and explore all possible financial measures available to support the defence and marine industry and protect Canada’s long term national security interests
  • We are currently assessing the impact of COVID-19 on the delivery of ongoing and future major procurement projects
  • We urge all employers during this critical time to follow the recommendations of public health officials, and to go above and beyond standard health and safety measures to make sure that workers are safe in this extraordinary situation

If pressed on the budget, delays and impact:

• Procurements are proceeding as planned, barring any issues faced by industry, which we will examine with companies on a case-by-case basis
• Canada will work through the contractual and financial implications of these circumstances to find resolutions acceptable to both Canada and industry
• We will work with the defence and shipbuilding industry to mitigate any budgetary and schedule impacts of the COVID-19 response
• Given the uncertainties associated with the duration of COVID-19 and related strategies, it is premature to assess the overall schedule impact to projects

If pressed on the third yard:

• Chantier Davie has pre-qualified to become the third strategic partner under the National Shipbuilding Strategy and has moved on to the Request for Proposal and evaluation stage of the process
• The third yard will build six Program Icebreakers for the Canadian Coast Guard
• The entire Invitation to Qualify process was overseen by an independent fairness monitor

If pressed on the Polar Icebreaker:

• The government is exploring procurement options for construction of the Polar Icebreaker. No decisions have been taken
• A Request for Information was issued to obtain information on domestic shipyard capability and capacity to build a Polar Icebreaker

If pressed on the Future Fighter Capability Program:

• At the request of industry, Canada has granted one-month extension to the June 30, 2020 proposal submission deadline. Canada has therefore requested that all suppliers inform Canada by July 1, 2020 regarding their intention to submit a proposal
• Canada is actively planning for the upcoming bid evaluation once proposals are received on July 31, 2020

If pressed on ‘excusable delay’ requests:

• We encourage industry to review their own specific contract and submit an excusable delay request according to the provisions of their respective contract

In response to COVID-19, Irving Shipbuilding Inc. (ISI) has suspended most industrial operations, production at Vancouver Shipyards (VSY) remains ongoing and the Province of Quebec has declared Chantier Davie an essential service.

ISI suspended most industrial operations as of March 20, 2020. The initial 3-week pause has since been extended. The suspension impacts about 1,100 employees, while special measures for working from home or within ISI’s offices have been implemented for remaining employees. Design work for the Canadian Surface Combatant continues through the suspension, along with limited work for the Arctic and Offshore Patrol Ships.

Operations at VSY continue but are being closely monitored. White collar workers not in direct support of production are working from home, while other measures being taken include following self-isolation guidelines, additional social distancing measures, cancelling large gatherings and increased cleaning. VSY has been working closely with WorkSafeBC in implementing these practices, and adjusting and escalating actions in response to new regulations and guidance.

On March 24, 2020, in response to COVID-19, the Quebec Government published a list of essential industrial sectors, under which Chantier Davie qualified. Chantier Davie has conducted on-site training for dealing with COVID-19, implemented a set of strict directives, and negotiated with their union to maintain intact squads instead of rotating employees through different teams. Nonetheless the workforce numbers and capacity have diminished to accommodate the social distancing measures implemented.

A number of Canadian defence suppliers have reached out to government officials identifying the need for urgent support, as they are experiencing serious cash flow difficulties resulting from reduced activities in light of the COVID-19 pandemic situation. In collaboration with other government organizations and central agencies, Public Services and Procurement Canada is currently exploring measures to support the defence industry.

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