VICTORIA, British Columbia — While Canadian firms stand to lose business with the country's withdrawal from the F-35 program, its maritime industry is expecting a potential windfall from the change of direction in defense.

Prime Minister Justin Trudeau has promised to put more money into Canada's ailing naval shipbuilding program, including any savings from selecting a cheaper alternative to the F-35 fighter jet. Maritime industry officials said that could mean more ships and more work.

Trudeau promised the shift in defense priorities during the recent federal election campaign. His government was elected Oct. 19 and took power Nov. 4.

The previous Conservative Party government had launched the National Shipbuilding Procurement Strategy (NSPS) in 2011. That outlined an ambitious CAN $30 billion plan (US $23 billion) to construct new vessels for the Royal Canadian Navy (RCN) and Canadian Coast Guard. NSPS would see construction of 28 major warships and 116 smaller vessels.

Conservative Party Prime Minister Stephen Harper, who was defeated by Trudeau, had earlier dismissed the Liberal promise to spend more money on shipbuilding as unnecessary, noting that his government originally put enough funding into NSPS.

But the shipbuilding strategy has been dogged by concerns from industry. Defense analysts, the Royal Canadian Navy and the country’s Auditor General Michael Ferguson , who have all warned there is likely not enough money to build all the needed vessels.

Before the Conservative Party government was defeated, Defence Minister Jason Kenney acknowledged that the NSPS plan, supposed to build up to 15 replacement ships for the Navy's RCN’s frigates and destroyers, might actually only finance 11 vessels.

Trudeau hasn’t offered gone into specific details about how his government will proceed with improvements to the shipbuilding program, but he has committed initially to the construction of an additional Arctic Offshore Patrol Ship (AOPS).

"Canada is immensely lucky to have the longest coastline in the world and Canadians expect we give our Navy the proper tools to protect that coastline," he said.

The NSPS called for the construction of five AOPS. Trudeau’s government would build a sixth. Maritime industry sources also suggest that the Liberal Party government could build an additional supply ship. for the RCN. The NSPS committed to the building of two such vessels, but the Navy had originally wanted three.

Peter Cairns, president of the Shipbuilding Association of Canada, said it is too early to tell how many additional ships could be produced under the Liberal government or whether the government plan would be to ensure enough funding for those vessels already planned under the NSPS.

Cairns, however, noted that it was rare that a Canadian government would specifically make promises during an election about shipbuilding and rebuilding the Navy.

"I think it’s very good news for both for industry and the Navy," said Cairns, a retired vice admiral and former commander of the Royal Canadian Navy. "At least it’s an acknowledgement that the Navy has been facing significant challenges."

In particular, there is concern about the lack of funding for the Canadian Surface Combatant program, the replacement fleet for the country's frigates and destroyers, he noted.

Industry will be closely watching what Trudeau does with that program, Cairns added.

Trudeau said his government's commitment to supporting the Navy would ensure it "will once again be able to operate as a blue water fleet and remain so well into the future."

Brian Carter, president of Seaspan Shipyards in Vancouver, British Columbia — , which is to build the two supply ships for the RCN starting next year — , didn’t comment on whether a third ship is expected to be added to the construction schedule.

But he welcomed the Liberal Party government's commitment to the Navy and the shipbuilding industry.

"What's happening in the shipbuilding industry in Canada is truly great," Carter said, referring to the NSPS. "To have government understand the need to make that a success over the long term and to have government support that is another shot in the arm for the industry."

Cairns, however, cautioned that even if the new government contributes more funding to the shipbuilding program, it doesn't mean construction will proceed at a faster rate.

"People have to realize that the federal government and government departments are all inexperienced in large shipbuilding projects like this," Cairns said.

He noted that the last time Canada's industry built large warships was in the 1990s.

The Conservative government has faced criticism for its naval shipbuilding plan. No ship under NSPS has yet been completed, and only two have been started.

Prime Minister Stephen Harper originally promised in 2006 that a fleet of armed Polar-class icebreakers would be built. But that was scaled back to one unarmed icebreaker that has, yet to be built.

In 2007, Harper announced that up to eight AOPS would be constructed and in the water by 2013. But that program fell behind schedule, and the number of ships to be built dropped to five.

The first AOPS will be ready by 2018. The last ship will be delivered by 2022. The Canadian Surface Combatants won't be built until after 2022.


David Pugliese is the Canada correspondent for Defense News.

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