This HillNote explores the publicly available data on National Shipbuilding Strategy (NSS) procurement between 1 April 2010 and 23 October 2023. It looks at which firms have been awarded contracts, the values of these contracts and the products and services for which they were awarded.
Background
In 2010, the Government of Canada established the NSS in order to renew the fleets of the Canadian Coast Guard and the Royal Canadian Navy. Through this procurement program, contracts are issued to private-sector firms by four departments: the Department of National Defence (DND), Public Services and Procurement Canada, Innovation, Science and Economic Development Canada, and the Department of Fisheries and Oceans (DFO). According to the Government of Canada, as of 24 November 2022, the total value of contracts awarded exceeded $21 billion. With respect to progress on these contracts, the federal government reported that as of 31 December 2022, “6 large ships and numerous small ships have been delivered. However, these milestones were met more slowly and at higher costs than originally anticipated.”
NSS contract amounts can vary greatly, from multibillion-dollar contracts to build warships to contracts of no more than a few hundred dollars for shipboard lights. The strategy has three main pillars:
- large vessels (more than 1,000 tonnes of displacement);
- small vessels (less than 1,000 tonnes of displacement); and
- vessel repair and maintenance.
The Government of Canada entered into long-term partnerships with three Canadian firms: Seaspan (Vancouver Shipyards, Victoria Shipyards and Vancouver Drydock), Irving Shipbuilding (Halifax Shipyard) and Chantier Davie Canada (Lévis). These are the only companies permitted to bid on projects relating to the first, “large vessel” pillar. Although Victoria Shipyards, Vancouver Shipyards and Vancouver Drydock are all subsidiaries of Seaspan, they are considered separate contractors in the CanadaBuys dataset and will henceforth be treated separately.
Projects related to the second and third pillars are largely open to bids from all private- sector firms. This includes both domestic and international firms, which are subject to the Industrial and Technological Benefits Policy, a policy that requires companies awarded defence contracts to do business in Canada equal to the value of their contract.
Data and Methodology
The CanadaBuys dataset was used to identify NSS contracts. The dataset includes contracts that began before the creation of the NSS but have been amended since, thus bringing them within the purview of the strategy. Contract values, which are not adjusted for inflation, fall into seven categories: architecture and engineering (relating to marine applications); shipbuilding (both large and small vessels); vessel repair; propulsion components (engines and propellors); vessel equipment (e.g., shipboard lights and lifebuoys); communication equipment (e.g., navigation technologies, radios and radar); and small boats (e.g., inflatable boats and dinghies). These seven categories were created by cross-referencing the hierarchical structure of the Goods and Services Identification Number with the identified competencies of well-known contractors in the database.
Analysis of the data reveals that many contracts were amended multiple times, increasing their original value. Larger contracts (over $100,000) were more likely to be amended.
Insights and Analysis
Figure 1 presents the total amounts awarded in contracts for each of the above-mentioned categories.
Figure 1 – Total Contract Amounts by Category, 2010–2023 ($ millions)
Source: Figure prepared by the Library of Parliament, 2023, using data obtained from Government of Canada, “CanadaBuys contract history,” Dataset, accessed 23 October 2023.
Four categories – architecture and engineering, shipbuilding, vessel repair and propulsion components – account for over 91% (or about $17,932 million) of the total value of contracts. About 9% of the total value of contracts awarded (or about $1,717 million) relates to vessel equipment, communication equipment and small boats.
It is important to note that contract amounts only represent an upper bound on the amount transferred to a company upon completion of a contract; companies do not always receive the total amount pledged in a contract.
Table 1 provides the median contract values for the categories presented above. Most notably, although the “small boats” category represents only a small fraction of the total contract value, its median contract value is the third largest.
Table 1 – Median Contract Value by Category
| Category | Median Contract Value |
| Shipbuilding | $453,488 |
| Vessel repair | $187,205 |
| Small boats | $181,894 |
| Architecture and engineering | $117,423 |
| Propulsion components | $99,139 |
| Communication equipment | $85,859 |
| Vessel equipment | $75,876 |
Source: Table prepared by the Library of Parliament, 2023, using data obtained from Government of Canada, “CanadaBuys contract history,” Dataset, accessed 23 October 2023.
Figure 2 provides additional details about the 10 largest contractors for the four biggest contract categories.
Figure 2 – 10 Largest Contractors by Total Contract Value: Architecture and Engineering, Shipbuilding, Vessel Repair and Propulsion Components, 2010–2023 ($ millions)
Notes: Some abbreviations are used in Figure 2 due to space constraints. “CA” abbreviates “Canada,” “Tech.” abbreviates “Technologies” and “Eng.” abbreviates “Engineering.” Verreault Navigation was acquired by Industries Océan in 2022. SNC-Lavalin changed its name to AtkinsRéalis in 2023.
Source: Figure prepared by the Library of Parliament, 2023, using data obtained from Government of Canada, “CanadaBuys contract history,” Dataset, accessed 23 October 2023.
Halifax Shipyard (owned by Irving Shipbuilding Inc.), Vancouver and Victoria Shipyards and Vancouver Drydock (all subsidiaries of Seaspan), Lockheed Martin Canada and Chantier Davie Canada have all been awarded NSS contracts whose total values exceed $1,000 million.
The largest contracts for shipbuilding under the NSS were awarded to Halifax Shipyard, and Vancouver and Victoria Shipyards. Industries Océan, Hike Metal Products and Chantier Naval Forillon have also won significant shipbuilding contracts, although they are only able to bid on shipbuilding projects that fall under the second, small-vessel pillar. Chantier Davie Canada leads in contract awards for vessel repair. It is worth noting that Chantier Davie Canada entered into its long-term partnership with the NSS in 2023 and has yet to bid on large-vessel projects.
Lockheed Martin Canada received two contracts worth a combined $2,450 million for ship propulsion components; although these contracts were still active in 2019, they were awarded in 2008, two years prior to the establishment of the NSS. Weir Canada was also awarded contracts totalling about $990 million in architecture and engineering services.
BAE Systems Canada received around $484 million in contracts for architecture and engineering services. Further, both SNC-Lavalin and Fleetway were awarded contracts totalling approximately $327 million for architecture and engineering services, which were to be completed in 2012 and 2019, respectivley.
Figure 3 is a Sankey diagram illustrating contract values by department, category and contractor. Each flow is coloured according to its originating department. Approximately 94% of the total value of NSS contracts is presented in the figure.
Figure 3 – National Shipbuilding Strategy: Total Contract Values by Department, Category and Contractor, 2010–2023
Note: Figures may not add up to totals because of rounding. Only contracts with the largest values were considered; totals for certain categories may not be representative of its true value.
Source: Figure prepared by the Library of Parliament, 2023, using data obtained from Government of Canada, “CanadaBuys contract history,” Dataset, accessed 23 October 2023.
Figure 3 shows that DND awards the largest proportion of contracts (by value) and is the only purchaser of communication equipment and propulsion components. DFO awards the largest amounts in the vessel repair category. Certain contractors receive contracts only from certain departments (e.g., all contracts awarded to Vancouver Shipyards were from DFO, while Halifax Shipyard has contracts from only DND).
Figure 4 provides a geographical overview of the contracts awarded in the shipbuilding and vessel repair categories and their value. The pie charts in the figure represent the locations where the majority of the work is typically being done. Most top contractors are situated in coastal cities or close to major waterways; these cities seldom have more than one contractor. These findings are consistent with the testimony provided to the House of Commons Standing Committee on Government Operations and Estimates in a 2022 study.
Figure 4 – Geographic Distribution of Contracts of $50 Million and Above in Value: Vessel Repair and Shipbuilding, 2010–2023 ($ millions)
Source: Map prepared by the Library of Parliament, 2023, using data obtained from Government of Canada, “CanadaBuys contract history,” Dataset, accessed 7 December 2023; Government of Canada, Administrative Boundaries in Canada – CanVec Series – Administrative Features, 1:5M and 1:15M, 2019; Government of Canada, Lakes, Rivers and Glaciers in Canada – CanVec Series – Hydrographic Features, 1:5M, 2019; and Government of Canada, Wooded Areas, Saturated Soils and Landscape in Canada – CanVec Series – Land Features, 1:5M, 2019. The following software was used: Esri, ArcGIS Pro, version 3.2.0. Contains information licensed under Open Government Licence – Canada.
Related Resources
Government of Canada. About the National Shipbuilding Strategy.
Government of Canada. Shipbuilding Projects to Equip the Royal Canadian Navy and the Canadian Coast Guard.
Office of the Parliamentary Budget Officer. The Cost of Canada’s Surface Combatants: 2021 Update and Options Analysis, 24 February 2021.
By Patric Harrigan, Library of Parliament
Categories: Uncategorized