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OP ED August 25, 2006

Wanted: A Smart Canadian Shipbuilding Strategy

Last week’s announcement by the British Columbia Ferry Corporation (BCFC) is just the latest evidence that Canadians have been left high and dry by our governments when it comes to intelligently meeting our needs as a maritime country boasting the longest coastline in the world. We need ships. We’ve always needed ships. And it only makes sense to build and maintain our fleets here. BCFC’s August 18 announcement that another $133 million of shipbuilding work would go to the German company Flensburger Schiffbau (to replace the aging Queen of Prince Rupert) is the latest in a series of blows to a proud and once vibrant Canadian shipbuilding industry.

Like so many other misguided decisions and short-sighted policies, one of the most distressing aspects of the outsourcing trend destructively taking hold is that it is completely un-necessary. There is simply no reason to drive Canada’s shipbuilding industry to the margins of our modern economy. This should be a sunrise industry, not a sunset industry. But because of a lack of commitment, focus and vision on the part of our provincial and federal governments, a sunset industry is exactly what we will have unless we change course soon.

Over the last several years, China, South Korea and Japan have all intensified their efforts to dominate the global shipbuilding market. And shipbuilding countries in the European Union have also taken steps, including subsidy, tariff and protectionist measures, to guard their market share and maintain a presence in the industry. Strangely, our provincial and federal governments have been content to stand idly on the shore and watch as global competition - often waged well outside the rules governing international trade – erodes this important element of our industrial base.

If governments and the private sector could honestly say that Canadian shipbuilders do not have the skills or capacity to meet the demands of the domestic and international marketplace, then the current situation would be regrettable but tolerable. But that is simply not the case. We do have a workforce with the requisite skills to build, maintain and refit ships in Canadian yards. And we have the opportunity, in the form of international and domestic demand, to put a dynamic shipbuilding industry back on the map. Of Canada.

A recent study found that $175 million spent in B.C. on ferry refits and one new vessel would bring benefits that include 1,500 person years of employment, a $78 million increase in household income, a $101 million increase in provincial GDP, and a $32 million return to government revenues.

Instead of seeing these benefits unfold in communities here in British Columbia, we are sending them to Germany these days. Last week’s $133 million announcement comes on the heels of a $542 million contract - also given to Flensburger Schiffbau - for the construction of three Super C-class vessels for B.C. Ferries.

Up until the mid-1980s, Canada was a recognized shipbuilding power with a highly skilled workforce of 18,000 workers. But, at that time, an OECD initiative aimed at eliminating subsidies was embraced and enforced by Canada while our global competitors only mouthed the words to the new policy while carrying on with business as usual. The result, after all of the restructuring worked its way through our shipbuilding communities, was that our domestic industry was almost cut in half. And over the past twenty years, we have been forced to compete against countries that have maintained subsidy programs in the range of 20%-40%. Moreover, we have been effectively prevented from doing business in the U.S. market by virtue of protectionist legislation in that country requiring that ships operating in the U.S. must be constructed, repaired, registered, crewed and owned in the U.S.

Does any of this sound familiar? If your family has been affected by the softwood lumber issue, it probably does. Sure there are enormous differences in the nature of the markets and scale of the two industries but, at their core, there is a common ailment that leads to a great deal of un-necessary suffering: Lack of leadership. Lack of vision. And an incomprehensible inability to stand up for Canada.

Having let the problems plaguing the shipbuilding industry drift for so long, it will take a coherent effort by all players to put a vibrant industry back together again. A good place to start would be for Premier Campbell and Transportation Minister Kevin Falcon to sit down with the industry to devise a common approach to creating and keeping good jobs right here in British Columbia. Something they have been strangely reluctant to do. And, of course, another good place to start would be to ensure that the billions of dollars of shipbuilding activity now underway and coming down the pipeline is done right here at home. By Canadians. For Canadians.

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