A ‘Mad Scramble’ to change the shipbuilding plan is underway

In my last post on this subject I wondered what the effects of an economic downturn or outright recession would have on the National Shipbuilding and Procurement Strategy (NSPS). We are now starting to see the results of that process: the Arctic and Offshore Patrol Ships (AOPS) have been delayed by at least three years and the entire procurement programme for the Department of Defence is under review. Most commentators feel that the funding envelope for shipbuilding will shrink. The ‘big question’ is, by how much? This prospect is causing some very major ‘backflips’ from the military leadership.

Up until recently, the Prime Minister has been very clear that the funding envelope for shipbuilding was fixed. In other words, it would not grow: he said nothing about it shrinking. That is why a lot of scaling back in capabilities took place in the initial planning for such shipbuilding components as the Joint Support Ship (JSS) and the AOPS. The navy values numbers of hulls because that provides the most flexibility in the conduct of operations. Ships with less capability may not be able to undertake certain operations alone but, in concert with some others of our own or from allies, a ‘group’ can undertake missions that a single ship cannot: this is the key difference between the F-35 debate and the shipbuilding question. Moreover, ship capabilities can usually be upgraded at some point in their service life. The hybrid Arctic and Offshore Patrol Ship was ‘dumbed down’ and made smaller to increase the chances of getting eight hulls out of the $3.1B earmarked amount. The JSS, a much more complicated hybridised design, has dropped some major capabilities in the faint hope of keeping the number of hulls at three. This attempt has failed and it is now widely believed that only two basic replenishment ships can be procured for the $2.3B set aside for this purpose.

General Walter Natynczyk’s recent comments in Halifax on 12 June that “steel needs to be cut now” on combat ships, specifically for destroyers, is a clear indication that the military leadership is getting nervous about the potential impacts of inflation and reduced funding on the shipbuilding program while a more ‘soft power’ view of Canadian seapower is emerging. The military seems to want the combat components of the NSPS moved forward so that the less-desirable (from their perspective) ‘pseudo-combat’ components will suffer the cut when monies run out, which it certainly will do, not the future Canadian Surface Combatant (CSC) ships.

Many of the navy’s senior leaders have never been enamoured with the AOPS. I am told that this opinion runs to the highest levels within the civilian and uniformed branches of the department. The admirals and many of the senior staff view this as a coast guarding function rather than a duty for the navy. The coast guard is equally unimpressed with the icebreaking capabilities of the AOPS, which equates roughly to their 3,800-tonne T1100-class of ‘light’ icebreakers (i.e., CCGS Sir William Alexander).  It is widely believed that a Memorandum to Cabinet is now in the PMO that argues in favour of arming the Canadian Coast Guard and giving it new powers to enforce Canadian law and marine regulations. So, what makes more sense, six to eight light armed icebreakers for the navy or three armed heavy icebreakers (does this sound familiar) for the coast guard?  The funding for the future CCGS John Diefenbaker, a 37,000 tonne ‘heavy’ icebreaker, is estimated at $721M.  While this number is almost certainly low, and arming the ship will drive up the cost, the government has taken the time to reconsider whether is wants the navy to operate armed icebreakers or the coast guard.

Another complication that is causing a major ‘gulp factor’ for the admirals is that the government now realizes the navy will be incapable of conducting major humanitarian relief and disaster assistance missions (HA/DR) because of the number and design of the future fleet replenishment ship (formerly the JSS). The mythology that the navy contributed significantly to Operation Hestia in Haiti seems to have finally been dispelled despite a major PR campaign to the contrary and the relative inconsequence of their actions has been revealed. According to reports reaching me, the government has directed that a capability to mount major HA/DR missions be included within the NSPS. This has come as a major shock. Monies, likely in the order of $1.5B - $2.0B, will have to be carved out of the funding envelope to build one, or more likely two, large logistical support ships to be operated by the navy. This will draw down on the fixed funding and will also require the navy to identify the people to crew the ships, plus more to create the support and training needed to make the capability whole.

The navy will argue strongly that the cut for this capability should come from the monies earmarked for AOPS. The coast guard will argue that the entire AOPS budget should be shifted to building heavy, armed icebreakers. If the latter does happen, the envelope for the combatants will shrink, hence the comment by General Natynczyk. The navy will view it as a major corporate failure if the number of combat ships is any less than fifteen, which permits a one-for-one replacement of the existing combat fleet. They are far less concerned that the auxiliary part of the fleet will not be replaced with equal parity.  Whether the monies will completely replace existing combat capability is another question altogether. It is now known that the navy will be without its destroyers before the CSC frigates arrive. Whether the frigates can provide the command and control, area surveillance and force protection of the existing destroyers is a question that has yet to be addressed. Personally, I doubt it. All of this upheaval to the NSPS will come with a political cost.

Rumours are now swirling steadily (and I believe they are founded on some truth) that a major shake-up will take place very soon at National Defence. While the house is in summer recess, it is a certainty that a new Chief of Defence Staff will be named. Too bad the general has come to his understanding about the importance of shipbuilding so late in his career. The strained relationship between Minister MacKay and Deputy Minister Fonberg has been obvious for quite a while and, according to some sources, is the background reason that ‘surprise announcements’ about additional work layoffs have been made at the same time that discredit the MND while he is trying to celebrate other ‘good news announcements’.  Both men are now likely to be moved to ‘soft landings’ in other lower-profile posts.

Whatever the government decides about which department will change and what capabilities will be included, you can expect the next MND to be a no-nonsense leader that will ‘ride roughshod’ over naval protestations about traditions, numbers and fleet capabilities.  For my money, John Baird as the joint minister of foreign affairs and defence seems like a good bet in what may be a ‘one horse race’.