a new policy framework for the canadian shipbuilding and ... · pdf filea new policy framework...

A New Policy Framework

for the Canadian Shipbuilding

and Industrial Marine Industry

Focusing on Opportunities2001

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© Her Majesty the Queen in Right of Canada (Industry Canada), 2001

Cat. No. C2-587/2001ISBN 0-662-65920-153515B

15% recycledmaterial

iii

I n October 2000, at theNational Shipbuilding Forum in

St. John’s, Newfoundland, the ship-building community clearly express-ed a desire for actions to address theproblems of the industry. Problemsstemming from a lack of investmentand innovation, business practicesthat hurt productivity, lack of financ-ing support, and the limits of thefederal procurement budget.

They identified a second and verysubstantial set of problems, born ofthe unique and difficult internationalcompetitive environment. In globaland domestic markets, Canada’sshipbuilders systematically encountercompetitors benefiting from produc-tion subsidies, generous financing,market protection, state ownershipand, in Canada’s largest potentialmarket, the United States, the JonesAct excludes them from large parts ofthe commercial market.

These business factors are difficult fora country with a proud shipbuildingtradition. That is why I launched anew process, the National Ship-building and Industrial MarinePartnership Project. I mandated thefour co-Chairs to take an independ-ent, fresh look at the opportunitiesand the challenges.

I asked them to do two things: first, toconduct a national, comprehensiveconsultation that was supported,but not directed, by government.

Second, I wanted proposals thatwould be reasonable and workable. Iwas explicit with the co-Chairs, fromthe beginning and throughout theprocess, that I was not interested inproduction subsidies or in increasingprotection for the industry. Our focushad to be on innovation, investmentand opportunity.

This places the premium on workingwithin existing policies and programsof the government. It includes ourcurrent policy support for shipbuilding,to see if its measures are effective. Itincludes the need for all stakeholders —not just the federal government — tocome to the table. It has to includemeasures by the industry itself — theowners and the workers — to addresstheir own competitive forces andbecome more focused on marketopportunities.

Those were my expectations forthe Partnership Project. What cameback — after several public round-tables, discussions with dozens of inter-ested parties, as well as written andoral submissions — were thirty-six rec-ommendations that were presentedto the government on April 5, 2001.

I said at the time that we would giveserious consideration to each andevery recommendation. Our testwould be whether the proposalswere reasonable, workable andaffordable. I said we would acceptwhat we could; modify them if

Minister’s Message

Focusing on Opportunities

iv

appropriate, add other measures ifwarranted, and reject some if neces-sary and give the reasons why.

In this report, the government is unveil-ing a new shipbuilding and industrialmarine policy framework. This policyfocuses on opportunity, growth andinnovation in niche markets whereCanada can compete. It recognizesthe value of marine transportation asan important industrial infrastructure,with environmental as well as economicbenefits. And it focuses on partner-ships, as it is only by working togetherthat we can succeed.

We have worked hard to develop apolicy that is positive and that bal-ances the interests of all the parties:shipbuilders and their workers, shipoperators and their customers,policies that apply to other industrialsectors and, of course, financial con-siderations. While the need for bal-ance might not fully please someinterests, the result is a future-orientedpolicy providing new opportunity tothe industry. With this policy, we areraising the shipbuilding and industrialmarine industry to a new level withingovernment. It is realistic, it is market-oriented, and it is fair.

The starting point is the current ship-building policy, which includes a25 percent tariff for several classes ofvessels, accelerated tax write-offs forowner–operators; and a Buy Canadapolicy for competitive federal procure-ments. On this last point, we have notconcluded our deliberations; we willstudy the task force recommenda-tions and federal procurement plansin more detail before concluding.

This new policy comprises some twodozen measures focused on thecommercial market, falling into fivecategories: capturing domesticopportunities, looking globally, inno-vation as key to competitiveness,financing and stronger partnerships.These measures are outlined in moredetail in this report. It also includes aresponse to each of the Partnership’srecommendations.

This is the policy framework that thegovernment is putting in place. Weexpect it to be effective, and we willreassess it in five years. We will workaggressively to implement it quickly. Itwill give the industry, and our part-ners, a viable set of federal policiesthat are positive, forward-looking andbalanced.

I want to take this opportunity tothank the many individuals andorganizations who have voluntarilycontributed to this work. Particularly, Iwant to express the gratitude of thegovernment for the work of thePartnership co-Chairs: Les Holloway,Peter Woodward, Peter Cairns andPhilippe Tremblay, who gave im-mensely and voluntarily of their owntime. They have literally gone coast-to-coast to reach out to industrystakeholders. It is through these col-lective efforts that we were pre-sented a tool kit for developing a newpolicy in a relatively short time. It isnow up to all stakeholders to makeit work.

Brian TobinMinister of Industry


v

Industry Overview 1

The Partnership Project 3

The Challenges and the Opportunities 5

A New Shipbuilding and Industrial Marine Policy Framework 13

Annex A: Federal Responses to Partnership Recommendations 15

Annex B: Industry Snapshot 29

Contents


1

T he Canadian shipbuilding andindustrial marine industry is

diversified in its product and marketfocus. It includes firms with specializedcapabilities in manufacturing andrepairing ships, building oil and gasrigs, and supplying related equipment,technologies and services.

The Canadian shipbuilding and repairindustry consists of shipyards locatedin several parts of Canada, capableof building a wide range of vessels ofup to 85 000 deadweight tons (DWT).The shipbuilding and repair industry isin a strategic position to captureupcoming opportunities. Canadianshipyards have built ferries, fishingvessels, offshore supply vessels, lakers,cargo ships and offshore drillingplatforms. They have designed andproduced sophisticated naval shipsand icebreakers. They are successfullybuilding luxury yachts for the worldmarket and have carved out a nichein ship repair and overhaul. To do so,they have had to innovate, invest inmodern technology and manufactur-ing processes and now produce high-quality products for sophisticatedbuyers, competitively and on time.

As the shipbuilding and industrialmarine industry moves toward highervalue and more sophisticated seg-ments of the market, the quality ofthe equipment that goes into a newvessel is increasingly important. Off-shore oil platforms require tremendoustechnological resources and expert-ise for their conceptual design, con-struction and operation. They are partof complex, high-tech and high-value-added projects involving allsegments of the industry. As a result,the shipbuilding and industrial marineindustry generates a considerabledemand for electronic navigationaldevices, communication equipment,radar and sonar, marine robotics, sub-sea vehicles, imaging equipmentand marine applications program-ming. The equipment manufacturersare an integral and essential part ofthe industrial marine sector andensure its competitiveness.

Annex B provides a statistical over-view of the shipbuilding and repairindustry.

Industry Overview


A diversified industry with

facilities in many parts

of Canada

Canadian shipyards develop

value-added goods and

services, including for

the offshore

3

O n October 20, 2000, theMinister of Industry established

an industry-led National Shipbuildingand Industrial Marine PartnershipProject. An industry–labour ProjectCommittee, consisting of four industry–labour co-Chairs, was tasked withconsulting widely with industry stake-holders across Canada to developreasonable and workable measuresto improve the competitiveness ofCanada’s shipbuilding and industrialmarine industry and to captureopportunities for growth.

The Committee conducted public con-sultations across Canada. A largenumber of people attended thesessions, and close to 80 presentationsor submissions were made.

On April 5, 2001, the Committeereleased its report titled “BreakingThrough: The Canadian ShipbuildingIndustry.” The report detailed thecapabilities of the Canadian ship-yards, future prospects for theseyards, and the domestic and interna-tional issues affecting the industry’s

future. It highlighted the growingopportunities from the projectedgrowth in the offshore oil and gasfields. These are projects that alsodraw on the facilities and skills ofthe shipbuilding industry. The reportincluded 36 recommendations forconsideration by all stakeholders: the federal government, provincialgovernments, business and labour.The recommendations reflect theconcerns and proposals of industrystakeholders including shipyards,organized labour, associations, marineshippers, and provincial and municipalgovernments.

Many of the recommendations weredirected to the federal government.As the report noted, many federaldepartments and agencies areresponsible for policies and programswith a direct impact on the ship-building and industrial marine industry.The following sections discuss the fed-eral government’s perspective onthe issues raised, and outline anew shipbuilding and industrialmarine policy framework.

The Partnership Project


The National Partnership Project

committee consulted stakeholders

across Canada

5

T his section of the reportprovides an overview of the

challenges and opportunities facingthis industry in five key areas:

• capturing domestic opportunities

• looking globally

• innovation as key tocompetitiveness

• financing

• stronger partnerships.

The policy elements being put inplace by the government to supporteach area are outlined below,together with an explanation of howthey respond to the challenges iden-tified by the industry as reflected inthe Partnership Project report.

Capturing DomesticOpportunitiesThere are a number of markets inCanada and abroad that can providesignificant opportunities for theCanadian shipbuilding and industrialmarine industry. Examples include thereplacement and modernization of theGreat Lakes fleet, select export oppor-tunities, the repair market for cruiseships, and the growing global need forfloating industrial plants and powergeneration capability. The industry hasalso identified a potential requirementto replace Canadian fishing vesselsif the Fishing Vessel Replacementregulations were to change. All theseprovide opportunities that the industrycan actively explore.

Canada’s offshore oil and gas indus-try, which has grown considerablysince early exploration activitiesbegan off the coasts of Newfound-land and Nova Scotia in the 1960s, isgenerating an increasing demand forvessels of all types, for equipmentrelated to both exploration anddevelopment and for services.

The offshore offers significant newfuture demand. By 2012, seven oreight projects are expected to be inoperation in Atlantic Canada, and oiland gas production is expected tobe about 300 000 barrels of oil perday. Some industry estimates arehigher at approximately 500 000 bar-rels of oil per day — equivalent to40 percent of Canada’s current lightcrude oil production. Only two

The Challenges and

the Opportunities


Significant growth opportunities exist

in niche markets and the offshore

6

projects — the Hibernia oil project offNewfoundland and the Sable Islandnatural gas project off Nova Scotia —are now in the production phase.

Off Newfoundland, the Terra Nova oilfield is expected to begin productionin early 2002, and the White Rose oilfield is expected to begin productionin 2004. These projects will likely usefloating production storage andoffloading (FPSO) systems for recover-ing crude oil. Additional projects areunder consideration, and some in theindustry predict that a new oil projectwill come on stream every two orthree years. Fabrication and installa-tion of modules and components forFPSO systems are expected to con-tinue to provide opportunities forCanadian companies.

To capture the benefits of all thisactivity, the industry will have toaggressively market its current capabil-ities. It will also have to increase itscapability to produce the type ofequipment that is required by eitherdeveloping the required technologiesor acquiring them through arrange-ments with suppliers in other countries.The government will facilitate accessto existing technology support meas-ures to assist the industry to developnew capabilities and will work inpartnership with the provinces, theenergy sector and other stakeholdersto increase industrial benefits from theoffshore. It will also actively work withthe industry to pursue complementaryinternational investment and partner-ships to expand Canadian industrialcapability in this area.

Government procurement is viewedas a major opportunity by the indus-try. The Buy Canada policy ensuresthat the benefits of federal procure-ment of vessels and repairs flow toCanadian industry on a competitivebasis. Repairs and overhauls haveand will continue to provide a steadystream of work to Canadian yards.

Federal procurement of new vesselshas been a mainstay of several yardsin the past but those vessels are nowcompleted. The Committee recom-mended that the government elimi-nate the peaks and valleys ofprocurement to provide a steadystream of work to the yards. Procure-ment is an important but complex issueand will be further considered by thegovernment in the context of theCommittee’s recommendations.

Capturing DomesticOpportunities — PolicyElementsIncrease efforts to secureCanadian industrial benefits fromthe development of offshore oiland gas, in partnership with theindustry, provinces and otherstakeholders.

Promote complementary invest-ment in oil and gas technologies tostrengthen Canadian capability torespond to offshore opportunities.

Review need to maintain the currentrestriction on fishing vessel length aspart of the Atlantic Fisheries PolicyReview, by the end of 2001.

Maintain the current Buy Canadapolicy on a competitive basisand review federal procurementprospects in more detail.


7

Looking GloballyAlthough the global market is highlycompetitive, there are opportunitiesthat the industry can pursue. In fact,Canadian yards have succeeded incapturing export business in variousniches such as tugs and patrol vessels.

The government is prepared to workwith the industry to pursue additionalexport opportunities. Under the aus-pices of Team Canada Inc, the gov-ernment will take a proactiveapproach by bringing the stakehold-ers in the shipbuilding and industrialmarine industry together to developan international trade promotionstrategy. This approach is taken inother key industrial sectors. Activitiesand analyses could focus on thedevelopment of targeted marketstrategies, production of industrycapability information, better use oftrade promotion instruments, andparticipation in fairs and missions.

Canada currently applies a 25 per-cent Most-Favoured-Nation (MFN)unbound tariff on most non-NAFTAimported vessels, which provides theCanadian shipbuilding industry withprotection from imported foreignvessels, many of which benefit fromextensive government support. Themain exception to this rate are fishingvessels over 30.5 metres, which donot have any duty applied whenthey are imported into Canada.Canada encounters and will con-tinue to encounter pressure toreduce or eliminate vessel tariffs inthe context of international tradenegotiations. The government willnot, as proposed, raise shipbuildingtariffs. This would have negativeimpacts on producers and consumersand would run counter to existinginternational trade obligations.

However, any reduction of the tariffwould not be undertaken until thegovernment is satisfied that theimpact of distortive foreign tradepractices on the domestic industry isaddressed.

Foreign vessels or floating equipmentmay be imported temporarily at areduced rate of duty in situationswhere Canadian vessels are notavailable for particular coastingactivities. Each request for duty reliefis reviewed with key stakeholders andtheir comments are taken intoaccount in the final decision. Eventhough very few imported vessels stayin Canada for a significant length oftime, there is a perception that alarge number of vessels are importedand stay in Canada for an extendedperiod without paying any duty. Toaddress this concern, the govern-ment will introduce new proceduresfor vessels that use the temporaryprovisions on a repeated basis. Thiswill ensure that the temporary impor-tation procedures are not abused.

Global trade in this sector is distortedby a variety of measures includingsubsidies, border measures and pro-curement preferences. In the UnitedStates for example, the Jones Acteffectively closes the domestic mar-ket to foreign-built vessels.

With respect to subsidies, the govern-ment will continue to work within theWorld Trade Organization (WTO)to seek new disciplines on the use ofsubsidies to provide a more competitiveenvironment for this and otherCanadian industries. Canada will notlimit its efforts to the WTO. For example,the government has stepped upCanada’s participation in Organizationfor Economic Cooperation and


Canadian yards have captured

niche export market opportunities

A variety of global trade restrictions

limit access by Canadian yards to

foreign markets

Canada will work to

reduce global subsidies

8

Development (OECD) discussions ondevelopments and difficulties inglobal shipbuilding.

Additionally, the government andExport Development Corporation(EDC) will continue to take an activerole in shaping the development ofinternational disciplines on exportcredits to ensure that exporters com-pete on a level playing field. In nego-tiations at the OECD on export creditsrelated to the shipbuilding sector, thegovernment is endorsing more flexibil-ity, including floating interest ratesand market practices.

Looking Globally — PolicyElementsPromote shipbuilding and industrialmarine exports within the frame-work of Team Canada Inc.

Enhance efforts at the WTO and theOECD to reduce trade-distortingpractices.

Continue to consult with the indus-try during the negotiation of anytrade agreements where the inclu-sion of shipbuilding and industrialmarine products is proposed.

Maintain current tariff regime untilthe government is satisfied that theimpact of distortive foreign tradepractices on the domestic industryis addressed.

Review all requests for extensions for temporary vessel imports beyondthree years.

Innovation as Key toCompetitivenessInnovation is essential to realizing oppor-tunities in the shipbuilding and industrialmarine industry as in any industrial sec-tor. An innovative industry is driven byresearch and development. It requiresa highly skilled work force and invest-ments in new technology. The govern-ment is prepared to work with thisindustry to encourage the develop-ment of innovative products andprocesses and to provide appropriatetraining. A number of federal programsand services support innovation andthe government is prepared to help theindustry access these. However, theindustry has to take the initiative to iden-tify innovative projects and processesthat can help capture the opportunitiesthat have been identified.

The following is a brief summary ofsome of the programs available toindustries, including the shipbuildingand industrial marine industry. In eachcase, the government will take extrasteps to work with the industry to facil-itate access.

• Scientific Research and Experi-mental Development Tax Credit(SR&ED): The SR&ED tax creditprogram provides tax credits tobusinesses that conduct SR&ED inCanada. The Canada Customsand Revenue Agency (CCRA),which administers this program, willestablish an industry committee toclarify how the SR&ED can be usedto greater effect by the shipbuildingand industrial marine industry. CCRAwill also publish an industry-specificSR&ED information bulletin andidentify corporate liaison officers.

• Technology Partnerships Canada(TPC): TPC contributes to Canada’seconomic growth by investing


Innovation is key to

future competitiveness

The government will facilitate

access to R&D programs

9

strategically in research, develop-ment and innovation as a risk andreward-sharing partner with indus-try. To facilitate access by the ship-building and industrial marineindustry, Industry Canada and theNational Research Council will workwith industry stakeholders todevelop a Technology Road Map,which will identify those technolo-gies that would be eligible for sup-port under TPC. By promoting TPCmore actively to the industry, thegoal will be to increase investmentin a broad range of industrialresearch and pre-competitivedevelopment technologies that willincrease competitiveness.

• The Industrial Research AssistanceProgram (IRAP): IRAP, administeredby the National Research Council,assists small and medium-sizedenterprises through financial con-tributions of up to 50 percent ofeligible costs to a maximum of$350 000. IRAP’s network of260 technical advisors locatedthroughout Canada will work withsmall and medium-sized firms in thisindustry to provide expert adviceon specific technological issuesand facilitate the use of the IRAP.

• The National Research Council’sInstitute for Marine Dynamics (IMD):The Institute for Marine Dynamics,established in St. John’s in 1985, isCanada’s primary centre for oceantechnology research and develop-ment. The National Research Councilplans to invest further in the IMD tostimulate the growth of an oceantechnology cluster. An expandedresearch program and an industrialincubator will be two elements ofthis investment. The incubator pro-gram will be aimed at retainingyoung people in Newfoundland.

• Student Connection Program:Through its Student ConnectionProgram, Industry Canada is pre-pared to assist small and medium-sized enterprises to maximize theuse of the Internet and to applyinformation technology to improvecompetitiveness while allowingstudents to gain valuable on-the-jobwork experience. This is an importantelement of the federal “ConnectingCanadians” initiative.

An innovative shipbuilding and indus-trial marine industry also needs ahighly skilled work force. Building andmaintaining such a work forcerequires a high degree of coopera-tion among management, labour,training institutions, the provinces andthe federal government.

The Committee has identified trainingas a critical issue for this industry tohelp workers learn how to operatenew tools and equipment and tointroduce the latest information tech-nologies to the work place. Training inmany of these areas is already inplace but there is an opportunity tobetter define the needs and reviewwhat is currently being offered toensure that the needs of workers andindustry are being met.

The federal government, throughHuman Resources DevelopmentCanada, will assist the industry (union,management, associations) in a diag-nostic of the human resources situa-tion including an assessment of skillsneeded and training requirements.This will be accomplished through ahuman resources sector study. Basedon the results of the study, the type ofskills and training required will be artic-ulated and a body such as a nationalsector council could be established todeliver on the recommendations


An innovative shipbuilding and

industrial marine industry requires a

highly skilled work force

Training is a critical issue

for this industry

Stakeholders must develop

suitable training tools to provide

workers with appropriate skills

10

arrived at through this process. Theprovinces will play a leading role inboth the identification and delivery oftraining requirements.

Innovation as Key toCompetitiveness — PolicyElementsDevelop guidelines for the appli-cation of Scientific Research andExperimental Development taxcredits to the shipbuilding andindustrial marine industry.

Facilitate access to TechnologyPartnerships Canada (TPC) forthe development of innovativetechnologies.

Develop a Technology Road Mapto help identify technologies thatcould be supported by TPC.

Assist small and medium-sized enter-prises through the Industrial ResearchAssistance Program, e.g., to intro-duce best practices to improveproductivity and competitiveness.

Invest in the Institute for MarineDynamics to support ocean engi-neering research.

Assist small and medium-sizedenterprises to maximize the use ofthe Internet through the StudentConnection Program.

Undertake a human resourcessector study and, based on theresults, establish a sector councilthat will assess skill and trainingrequirements and will work withstakeholders to implement therecommendations.

FinancingAs with any industry, financing is fun-damental to competitiveness in themarket, a point recognized in existingtax policy, which provides an accel-erated rate of depreciation for pur-chasers of new Canadian-builtvessels. This helps counter the moreextensive support offered by com-petitors. However, the use of thismeasure is limited to situations whereowner–operators of Canadian-builtvessels have sufficient taxableincome to claim an acceleratedcapital cost allowance. Its use in leas-ing transactions, an increasingly pop-ular method of financing sales of shipsin global as well as Canadian mar-kets, is limited.

The Committee proposed a modifica-tion to the tax regulations that wouldpermit the use of specific tax provi-sions in situations where Canadianvessels are sold to leasing companiesrather than operators. It also had pro-posals regarding the non-residentwithholding tax. The government rec-ognizes that the existing tax measurecannot be used effectively in such sit-uations. However, the proposed solu-tion is inconsistent with broader taxpolicy considerations.

To provide an equivalent benefit topurchasers of Canadian-built ships insuch circumstances, including Cana-dian and foreign buyers/lessees, anew flexible Structured FinancingFacility will be introduced as an alter-native to the accelerated capitalcost allowance provision. This will be anew market-based tool, administeredby Industry Canada, that will providefinancing that is competitive with thatoffered by other countries.


A new Structured Financing Facility

will be introduced

11

Major shipbuilding countries provideexport financing to their shipbuildingindustry. Many countries providefinancing within OECD guidelines butthere are some exceptions; for exam-ple, the United States, which oftenexceeds the OECD terms. ExportDevelopment Corporation (EDC) hasbeen successfully working with theshipbuilding industry to promoteexports. EDC offers direct financingon terms commensurate with OECDguidelines. For transactions that EDCcannot support directly, support canbe considered on a case-by-casebasis under the Canada Account.

It is important to recognize thatexport financing is not the only factorthat a potential purchaser considersin determining where to purchase anew vessel. Criteria such as price,quality, delivery times, technology,competitiveness and productivity areadditional key factors affecting pur-chasing decisions.

Financing — Policy ElementsMaintain the current acceleratedcapital cost allowance for pur-chasers of Canadian-built vesselsregistered in Canada.

Introduce a Structured FinancingFacility, under Industry Canada, toprovide competitive financing topurchasers of Canadian-built vesselswho cannot utilize the current accel-erated capital cost allowance.

Continue to provide competitive,non-concessionary export financingthrough EDC.

Consider use of the CanadaAccount for non-concessionaryexport financing on a case-by-casebasis.

Stronger PartnershipsThe Committee has made clear thatthere is a real requirement for a new,ongoing process to encourage regu-lar dialogue among stakeholders andgovernment on the issues and thechallenges facing this sector. Thegovernment agrees. To encouragesuch dialogue and thereby continueto work with stakeholders, the Ministerof Industry will establish an advisorycommittee to advise on issues affect-ing the competitiveness and prospectsof the industry, including the impactof the new shipbuilding and industrialmarine policy framework. The Ministerwill also organize an annual forum ofkey stakeholders.


The Export Development Corporation

is working with the industry to

promote exports

Stakeholders must work together to

deal with the issues and capture the

opportunities

12

To bolster the government’s commit-ment to working with the industry,Industry Canada will establish a newunit in the department whose man-date will be to work with theshipbuilding and industrial marineindustry and other stakeholders on acontinuous basis. This organization willwork to ensure effective implementa-tion of this policy framework. It will alsoreview the effectiveness of the newfederal policy after five years.

Stronger Partnerships — PolicyElementsEstablish an industry advisory com-mittee or other consultativeprocess to assist in implementingthe new policy framework andcontinue to advise on issues affect-ing the competitiveness of theindustry.

Minister of Industry to organizeannual stakeholders’ forum.

Industry Canada to create a newenergy and marine organization towork with stakeholders on:

• increasing offshore benefits

• promoting trade and invest-ment

• developing a Technology RoadMap

• supporting international discus-sions at the OECD, WTO, etc.

• providing advice on requests forduty remission

• coordinating the implementa-tion of the new policy frame-work

• supporting stakeholder consul-tations

• developing a strong analyticalbase to support the aboveinitiatives.

Review policy framework in fiveyears.


13

Capturing DomesticOpportunities — Policy ElementsIncrease efforts to secure Canadianindustrial benefits from the develop-ment of offshore oil and gas, inpartnership with the industry, theprovinces and other stakeholders.

Promote complementary investmentin oil and gas technologies tostrengthen Canadian capability torespond to offshore opportunities.

Review need to maintain the currentrestriction on fishing vessel length aspart of the Atlantic Fisheries PolicyReview, by the end of 2001.

Maintain the current Buy in Canadapolicy on a competitive basis andreview federal procurement pros-pects in more detail.

Looking Globally — PolicyElementsPromote shipbuilding and industrialmarine exports within the frameworkof Team Canada Inc.

Enhance efforts at the WTO and theOECD to reduce trade-distortingpractices.

Continue to consult with the industryduring the negotiation of any tradeagreements where the inclusion ofshipbuilding and industrial marineproducts is proposed.

Maintain current tariff regime until thegovernment is satisfied that theimpact of distortive foreign tradepractices on the domestic industry isaddressed.

Review all requests for extensions fortemporary vessel imports beyondthree years.

Innovation as Key toCompetitiveness — PolicyElementsDevelop guidelines for the applica-tion of Scientific Research andExperimental Development tax cred-its to the shipbuilding and industrialmarine sector.

Facilitate access to TechnologyPartnerships Canada (TPC) forthe development of innovativetechnologies.

Develop a Technology Road Map tohelp identify technologies that couldbe supported by TPC.

Assist small and medium-sized enter-prises through the Industrial ResearchAssistance Program, e.g., to introducebest practices to improve productivityand competitiveness.

Invest in the Institute for MarineDynamics to support ocean engi-neering research.

A New Shipbuilding and

Industrial Marine Policy

Framework


14

Assist small and medium-sized enter-prises to maximize the use of theInternet through the StudentConnection Program.

Undertake a human resource sectorstudy and, based on the results,establish a sector council that willassess skill and training requirementsand will work with stakeholders toimplement the recommendations.

Financing — Policy ElementsMaintain the current acceleratedcapital cost allowance for purchasersof Canadian-built vessels registered inCanada.

Introduce a Structured FinancingFacility, under Industry Canada, toprovide competitive financing to pur-chasers of Canadian-built vesselswho cannot utilize the current accel-erated capital cost allowance.

Continue to provide competitive,non-concessionary export financingthrough EDC.

Consider use of the Canada Accountfor non-concessionary export financ-ing on a case-by-case basis.

Stronger Partnerships — PolicyElementsEstablish an industry advisory commit-tee or other consultative process toassist in implementing the new policyframework and continue to advise onissues affecting the competitivenessof the industry.

Minister of Industry to organize annualstakeholders’ forum.

Industry Canada to create a newenergy and marine organization towork with stakeholders on:

• increasing offshore benefits

• promoting trade and investment

• developing a technology roadmap

• supporting international discussionsat the OECD, WTO, etc.

• providing advice on requests forduty remission

• coordinating the implementationof the new policy framework

• supporting stakeholder consultations

• developing a strong analyticalbase to support the aboveinitiatives.

Review policy framework in five years.


15

Annex A:

Federal Responses to

Partnership Recommendations


16

C a p t u r i n g D o m e s t i c

O p p o r t u n i t i e s

That the Government of Canada, working with the provinces and industry, findways to optimize Canadian industrial benefits through partnerships with foreigncompanies that are harvesting Canadian marine and offshore resources.

That the various participants in the industrial marine and shipbuilding sectorcombine forces and undertake initiatives to clearly demonstrate their capa-bilities and competitiveness to the oil and gas industry and to provincial andfederal government officials.

That industry presents a comprehensive plan to federal and provincialgovernments as to the role governments can play in optimizing economicbenefits to the industry.

A number of mechanisms already exist to evaluate industrial benefits from theoffshore. To complement these, Industry Canada will create a new energy andmarine organization to work with stakeholders on increasing offshore benefits.

The government will continue to play an active role in ensuring that Canadabenefits from development of offshore oil and gas projects by working with theprovinces, the boards and other stakeholders. Support to the industry alreadycovers a broad spectrum, from investments in community physical infrastruc-ture to assistance to small and medium-sized enterprises in the supply sector.The government will also work with the shipbuilding and industrial marineindustry to showcase its capability to potential customers and will promoteinternational investment and strategic partnerships.

Through the advisory committee and the new organization, industry and gov-ernment can work together to develop a comprehensive plan to increaseeconomic benefits from the offshore.

That the provincial and federal governments focus on marine transportationas a more environmentally friendly alternative to other modes of transport.

Marine transportation, as an environmentally friendly mode of transport, cancomplement Canada’s environmental objectives. The marine mode is widelyrecognized as having environmental benefits in terms of lower emissions andfuel efficiency in many circumstances.

That the federal government formally recognize the national strategic impor-tance of the shipbuilding and industrial marine sector.

O F F S H O R E

O P P O R T U N I T I E S

F E D E R A L G O V E R N M E N T

C O M M E N T S

E N V I R O N M E N T


C O M M E N T S

I N D U S T R Y P R O M O T I O N

17

C a p t u r i n g D o m e s t i c

O p p o r t u n i t i e s

The Canadian shipbuilding and industrial marine industry is recognized by thegovernment as an important contributor to national and regional economies.In addition, a viable and competitive domestic ship maintenance and repaircapability is important to Canadian government operational needs. The newpolicy framework recognizes the importance of the industry and the desirabil-ity of working together to focus on the opportunities that have been identified.

That the Department of Fisheries and Oceans (DFO) review the licensing ofvessels currently restricted to 19.8 metres (65 feet) to allow them to bereplaced or converted to a vessel length of less than 25.9 metres (85 feet).

Vessel replacement is a complex matter that needs to be reviewed in the con-text of safety, reliability and fisheries management and resource conservationconsiderations. The Atlantic Fisheries Policy Review, announced by the Minister ofFisheries and Oceans on February 7, 2001, will be completed by the end of 2001.The vessel replacement guidelines will be considered explicitly within that review.

That the Government of Canada re-commit to the policy of procuring, refittingand overhauling in Canada.

That the Government of Canada bring the impact of accrual accountingto bear on long-term vessel planning and management in the federalgovernment as a means to assisting in making cost-effective decisions in vesselacquisition and management over the longer term.

That the Government of Canada eliminates the peaks and valleys of pro-curement for the Navy and the Coast Guard through more effective forwardplanning and thereby keeps order books and employment levels moreconsistent over the longer term.

The federal government will continue to procure, repair and refit vessels inCanada subject to operational requirements and the continued existence ofa competitive domestic marketplace.

The government will factor the financial information arising from the practice ofaccrual accounting into its procurement planning and decision-making process.This will provide a better appreciation as to the rate at which assets are being con-sumed in producing outputs and hence better support long range planning.

Procurement is an important but complex issue and will be reviewed by thegovernment. This review, which will address the Committee’s recommenda-tions and related issues, will be completed by the fall of 2001.


C O M M E N T S

V E S S E L R E G U L A T I O N


C O M M E N T S

P R O C U R E M E N T


C O M M E N T S

18

L o o k i n g G l o b a l l y

That the Government of Canada presses for the elimination of subsidies to theworldwide shipbuilding industry.

The government continues to seek improved subsidy disciplines in the WTO,and where possible, in other multilateral fora, to provide a more competitiveenvironment for this industry and other industries.

In the short to medium term, Canada is preparing for the next WTO MinisterialConference in November 2001, at which new multilateral trade negotiationsmay be initiated. Canada has stated publicly already that one of its objectivesfor new multilateral trade negotiations under the WTO is to address the issue ofsubsidy practices that affect shipbuilding within a general subsidies negotia-tion. The government will work with the shipbuilding industry to developCanada’s approach to the negotiation of improved subsidy disciplines.

Canada is not limiting its efforts to the WTO. The government has recentlystepped up Canada’s participation in the OECD and is promoting greaterflexibility in financing terms.

That the Government of Canada press the United States for amendments tothe Jones Act to allow for greater participation of Canadian shipyards.

Canada and other countries have repeatedly sought the reduction of JonesAct protectionism. The Canadian government continues to be ready toexplore any bilateral or multilateral route to reduce or eliminate this barrier tomarket access.

That the Government of Canada resist any requests from other countries tochange provisions of the Canadian Shipbuilding Policy until such time as theCanadian industry has been able to overcome the long-term effects of thesubsidy and unfair pricing policies of other countries.

While all industrial sectors are considered in trade negotiations, a fundamen-tal principle that guides Canadian trade negotiators is that no tariff is elimi-nated without consultation with stakeholders and, where necessary, withoutconsideration of a transition period negotiated between the parties to facilitatedomestic industry's adjustment.

G L O B A L S U B S I D I E S


C O M M E N T S

J o n e s A c t


C O M M E N T S

T A R I F F S


C O M M E N T S

19


That the Government of Canada removes the exception to the 25 percenttariff on fishing vessels over 30.5 metres (100 feet).

The duty-free Most-Favoured-Nation (MFN) tariff on fishing vessels over30.5 metres (100 feet) was “bound” by Canada during the Uruguay Round. Thismeans that a free rate of duty is the highest tariff that may be applied byCanada with respect to importations of such vessels. Increasing the tariff onthese vessels would violate Canada’s MFN obligations under the WTO. It wouldalso increase the operators’ costs and therefore impact consumers.Consequently, the government will continue to honour its commitments andnot increase this tariff.

That the Government of Canada examine the possibility of increasing the25 percent tariff against countries that provide subsidies in excess of 20 percent.

Increasing the tariff would violate Canada’s MFN obligations under the WTO.Furthermore, the imposition of higher import duties by Canada is unlikely toaffect the subsidy practices of other countries.

That the Government of Canada adjust the rate that allows foreign flaggedvessels to operate temporarily in Canadian waters from 1/120th to 1/60th, andreduce the allowable period from ten years to five years.

The 1/120th program is intended to provide a reduction in duty costs in thosecases where Canadian vessels are not available for particular coastingactivities and foreign vessels or floating equipment are allowed to engagetemporarily in such activities. Typically, these are one-off activities, notexceeding 12 months in duration, and are few in number.

The government, in consultation with stakeholders, will review and closelymonitor any applications for extensions for temporary vessels imports beyondthree years to ensure that the temporary entry provisions are not beingabused.

T A R I F F S


C O M M E N T S

T A R I F F S


C O M M E N T S

D U T Y R E M I S S I O N


C O M M E N T S

20


That the Government of Canada stop duty remissions on the various topsidemodules and sub-sea components that are imported into Canada and canbe supplied from Canadian sources, and incorporate a base rate consistentwith that applied to most imported vessels; that is, 25 percent.

The vast majority of these goods enter under existing bound tariff items in thecustoms tariff and not by means of special duty remission orders. Increasingthe tariff on topside modules and sub-sea components would involve renego-tiations under the WTO and would require Canada to pay compensation toaffected trading partners or face retaliation. Consequently, the existing tariffswill not be increased.

D U T Y R E M I S S I O N


C O M M E N T S

21

I n n o v a t i o n a s K e y t o

C o m p e t i t i v e n e s s

That the Government of Canada enhance eligibility of the shipbuilding indus-try to participate in program areas that the federal government has identifiedas a leading priority, namely technological innovation. Ministerial directionshould be given to sponsors of the existing programs to meet with industry andmake recommendations on how present research and developmentprograms should be modified.

Innovation is a key priority for the government. The shipbuilding industry has toinnovate in order to capture the opportunities that have been identified. Thegovernment has a number of programs that encourage innovation and is pre-pared to work with this industry to encourage the development of innovativeproducts and processes.

The government will actively promote and facilitate access by the shipbuild-ing and industrial marine industry to Technology Partnerships Canada (TPC). Inaddition, the National Research Council and Industry Canada will work withthe industry to develop a Shipbuilding and Industrial Marine TechnologiesRoad Map to help identify technologies needed in marine and ocean activi-ties including the offshore industry, ocean technologies and ship design andconstruction. The results of this analysis will identify technologies that could bedeveloped in Canada, possibly with TPC assistance.

The National Research Council, through the Institute for Marine Dynamics, willmake additional investments in the growth of an ocean technology clusterand support ocean engineering research. The National Research Council andIndustry Canada can also provide innovation assistance to small andmedium-sized firms in the sector through the Industrial Research AssistanceProgram (IRAP).

The scientific and experimental development tax credit program is availableto the shipbuilding industry. The Canada Customs and Revenue Agency(CCRA) will work with the industry to clarify how it might apply to R&D projectscarried out by companies in this sector.

T E C H N O L O G I C A L

I N N O V A T I O N


C O M M E N T S

22

I n n o v a t i o n a s K e y t o

C o m p e t i t i v e n e s s

That provincial governments take a strong lead in the areas of training forwhich they have responsibility.

That Human Resources Development Canada clearly state those areas whereit can give advice and assistance.

That the industry work with Human Resources Development Canada toestablish a sector council to look at skill needs and training requirements of theindustry on a continuing basis.

The federal government, through Human Resources Development Canada,will assist the industry (union, management, associations) in a diagnostic of thehuman resources situation including an assessment of skills needed andtraining requirements. This will be accomplished through a human resourcessector study. Based on the results of the study, the type of skills and trainingrequired will be articulated and a body such as a national sector councilcould be established to implement the recommendations arrived at throughthis process. The provinces will play a lead role in both the identification anddelivery of any training requirements.

T R A I N I N G


C O M M E N T S

23

F i n a n c i n g

That the Government of Canada agree to remove the restriction in the exist-ing policy that stipulates that the accelerated Capital Cost Allowance (CCA)can only be used by Canadian owners/operators and allow it to be used byeither Canadian owners or Canadian operators; this will put the acceleratedCCA in the hands of more investors who can use it and stimulate the purchaseof new builds in Canada.

That the Government of Canada include ships as an exemption under sub-section 1100 (1.1 and 1.2) of the Income Tax Act so that the benefits of anaccelerated CCA can be passed along to Canadian operators throughbareboating arrangements as it is through leasing arrangements with its directcompetitors; trucks and railway cars.

That the Government of Canada include ships as an exemption under theappropriate subsection of the Income Tax Act so that any lease paymentsmade to U.S. lessors would be exempt from withholding tax.

The government recognizes the importance of these proposals and the poten-tial impact on the competitiveness of the shipbuilding and industrial marineindustry. However, the proposed solution is inconsistent with broader tax policyconsiderations.

Therefore, the government will implement a new Structured Financing Facilityas an alternative to the accelerated capital cost allowance provision. This newfacility, which will be administered by Industry Canada, will provide an equiv-alent benefit while respecting present tax policy. This measure will providecompetitive financing to the industry recognizing the unique challenges thatthis sector must overcome in the current distorted global marketplace. Thenew measure will be focused on opportunities and will be forward looking inits application. It will not be used to provide production subsidies or generalfinancial support to individual yards.

C A P I T A L C O S T

A L L O W A N C E

W I T H H O L D I N G

T A X


C O M M E N T S

24

F i n a n c i n g

That the Government of Canada make it a practice not to lose a transactionto a competitor in circumstances where the competitor is offering non-concessionary financing to a creditworthy borrower, whether they areOECD terms, extended terms or Title XI.

That the Government of Canada make it a practice, in the case of directcompetition with Title XI financing, to provide the support necessary to theExport Development Corporation to enable it to provide financing equivalentto Title XI.

That the Government of Canada make it a practice, in those cases wherethe Export Development Corporation is unable to accept the credit risk of aproposed borrower on their own, and where a competitor is likely to do so, toseriously consider approval of the application on a national interest basis.

That the Government of Canada make it a practice, in situations where theamount of financing being considered by the Export DevelopmentCorporation (EDC) is less than that being considered by a competitor, toagree to consider enhancing the credit on a national interest basis with aguarantee to fill the gap between the EDC amount and the amount beingconsidered by the competitor. An alternative to a loan guarantee could be aresidual value guarantee on the vessel.

That the Government of Canada agree to provide the necessary support tothe Export Development Corporation (EDC) in situations where Canada iscompeting against subsidized shipyards to allow EDC to offer competitiveinterest rates and maximum financing amounts with up to 20-year re-paymentterms.

That the Government of Canada agree to provide the necessary support tothe Export Development Corporation to enable it to offer the best possibleOECD interest rates and terms in situations where the borrower requests OECDExport Credits.

That the Government of Canada agree to empower the Export DevelopmentCorporation with the responsibility of providing extended term financing underits commercial market window to foreign and domestic buyers of Canadianbuilt ships.

That the Government of Canada agrees to streamline processes as appropri-ate to facilitate prompt processing of applications and quick turnaround.

E X P O R T F I N A N C I N G

25

F i n a n c i n g

Export Development Corporation is a self-sustaining Crown corporation man-dated to assist Canadian exporters to compete in the international market-place while maintaining its own financial sustainability. As a commercialCrown corporation, EDC determines the price of its services based on marketpractices. As a result, in order to maintain its own self-sufficiency, EDC’s pricing decisions are made on a case-by-case basis, with consideration tocompetitive circumstances.

Market window financings are structured on terms and conditions in accor-dance with commercial practices. As such, EDC already possesses the powerto provide market-based export financing for “bankable transactions.”

Financing support for both foreign and domestic buyers of Canadian-builtships requires a commercially viable borrower or lessee and a recourse-worthy asset as evidenced by market valuations.

EDC offers financing consistent with its obligations under the OECD consensus.For some transactions support is available under the Canada Account, subjectto the approval of Ministers. Canada Account transactions are evaluated on acase-by-case basis and are bound by consensus disciplines.

The government and EDC will continue to take an active role in shaping thedevelopment of international disciplines vis-à-vis the use of export credits toensure that Canadian exporters can compete on a level playing field. Innegotiations at the OECD toward a new Export Credit Understanding on Ships,the government is promoting greater flexibility in terms that might includefloating interest rates and extended-term financing when justified by marketpractices.

With respect to Title XI, if financing terms offered under Title XI are consistentwith terms generally available for similar transactions in the marketplace andprovided that OECD disciplines are respected, EDC is able to consider suchterms on a case-by-case basis.

The application process to obtain export credits from EDC is the same for allexporters, whether in the shipbuilding sector or in other sectors. EDC makesevery effort to provide prompt, streamlined services on all transactions.However, EDC is open to the consideration of specific recommendations forstreamlining processes where appropriate.


C O M M E N T S

26

S t r o n g e r P a r t n e r s h i p s

That the federal and provincial governments work with industry to promotecooperation and support for the industry, and help convey consistent keymessages regarding the industry.

That the Minister of Industry takes the lead in coordinating the federal govern-ment’s role in championing the industry.

That the federal government establish an advisory committee made up ofindustry and government stakeholders to review, on an ongoing basis, thestate of the industry, policy directives and initiatives.

There is a need for a formal mechanism to provide a forum for regular consul-tations among stakeholders. The Minister of Industry, with the participation ofthe industry and other stakeholders, will establish an advisory committeecomprised of senior executives of the sector and other stakeholders tostrengthen government–industry partnership on an ongoing basis. Greatercoordination of the federal government role will be pursued through the estab-lishment of a new organizational unit by Industry Canada.

That provincial and federal governments work with industry to ensure that theindustrial union model is the form of union structure required for shipbuilding,offshore and other marine related work sites.

The Canada Labour Code is the basis for the federal government labour rela-tions strategy. The federal government is committed to ensuring that all sec-tions of the Code are adhered to and respected.

As the shipbuilding and industrial marine industry consists of a strongmanufacturing component, much of the industry falls within the jurisdiction ofprovincial governments. The federal government encourages its provincialcounterparts to fully engage all sectors that might be affected by the rules andregulations of the provincial labour code to encourage focus on productivityand innovation.

A D V I S O R Y C O M M I T T E E


C O M M E N T S

I n d u s t r i a l U n i o n

M o d e l


C O M M E N T S

27

S t r o n g e r P a r t n e r s h i p s

That the Government of Canada develops and promotes an internationalsocial clause concerning labour standards in shipbuilding.

Canada does not support an “international social clause”; that is, theenforcement of core labour standards by placing conditions on tradebetween countries. Such conditions may be used for protectionist purposesand can undermine the objectives of the 1998 International LabourOrganization’s Declaration of Fundamental Principles and Rights at Work. TheDeclaration obliges ILO member countries to promote and realize core labourstandards and has follow-up mechanisms for review and monitoring of globaland country progress in meeting Declaration objectives.

S H I P B U I L D I N G L A B O U R

S T A N D A R D S


C O M M E N T S

29

As in many western countries,the past decade has been a

difficult one for the Canadian shipbuild-ing industry. Canadian shipyards havehad to adjust to a shrinking domesticmarket, reduced government procure-ment and adapt to an internationalmarket characterized by overcapacityand market-distorting trade practices.As a result, despite growing globaldemand, the Canadian industryexperienced a long-term declineduring the 1990s (Figure 1).

Between 1990 and 2000, value-added in the shipbuilding industry fellat an average annual rate of almost9 percent per year. In 2000, realvalue-added in the shipbuildingindustry amounted to $264 million,

representing only 1 percent of thetotal value-added in the transporta-tion equipment sector, down from4.4 percent in 1990. The shipbuildingindustry employed about 4 700 work-ers — 1.8 percent of the total workforce engaged in the transportationequipment industry, compared with5.4 percent in 1990 (see Figure 2 andTable 1).

The decline has slowed in recentyears. Real value-added declined atan average annual rate of 4.3 percenta year from 1997–2000 compared with16.8 percent from 1994–97. Similarly,employment only declined at anaverage annual rate of 1.6 percentin the 1997–2000 period, down from12.9 percent in 1994–97.

Annex B:

Industry Snapshot


60

30

1983

1984

1985

1986

1987

1988

1989

1990

199

1

1992

1993

1994

1995

1996

1997

1998

1999

2000

90

120

VALUE- ADDED

150

EMPLOYMENT

Source: Statistics Canada

Figure 1

Trends in Real Value-Added and Employment in Shipbuilding Industry in Canada (Index: 1983=100)

30

Labour productivity and investmentintensity increased. Between 1990 and1998, real output per hour workedexpanded at an average annualrate of 3.9 percent in shipbuilding.Machinery and Equipment investmentper worker employed and the ratio ofMachinery and Equipment investmentto output, on average, wereabout 50 percent higher at the endof 1998 than in 1990.

The industry also moved towardhigher value-added products andexports rose significantly. Between

1990 and 2000, shipbuilding exportsgrew at an average annual rate of23 percent a year. In 2000, shipbuildingexports totalled $137 million, up from$42 million in 1990. As illustrated inTable 2, the United States has beenthe dominant destination for Canadianshipbuilding exports.

Today, the shipbuilding industry con-sists of more than 30 shipyards in BritishColumbia, Ontario, Québec and theAtlantic provinces. Many shipyardsare located in small communities,and are important contributors tolocal economies.

As Table 3 illustrates, AtlanticCanadian yards make up 50 percentof the total national employmentin the shipbuilding and industrialmarine sector. Yards are currentlyworking on diverse projects such asfishing vessel construction, tugs for theexport market, offshore supply vessels,sub-sea component fabrication, andtopside module fabrication and com-missioning work for the offshore. Inaddition, Atlantic yards are busy withongoing ship repair work for variousdomestic and international clientsand with luxury yacht construction forthe export market.


YEAR 2000

Shipments $335 million 0.3%

Employment 4700 1.8%

Real value-added (1992$) $264 million 1.0%

Imports $555 million 0.6%

Exports $137 million 0.1%

Shipbuilding Manufacturing average

Average weekly earnings $890 $760

SHARE OF TOTAL TRANSPORTATION

EQUIPMENT INDUSTRY

Table 1 Shipbuilding Industry Snapshot


Motor Vehicle Partsand Accessories Ind.

44.1%

Aircraft and Aircraft Parts

Ind.18.8%

Truck and Bus Body and Trailer Ind. 7.5%

Railroad Rolling Stock Ind. 3.5%

Boatbuilding and Repair Ind. 2.4%

Shipbuilding and Repair Ind. 1.8%

Other TransportationEquip. Ind. 1.6%

Motor Vehicle Ind.20.3%

Figure 2

Distribution of Employment TransportationEquipment Industries, 2000 (%)


31

Québec yards make up 12 percentof the total national employment inthe shipbuilding and industrial marinesector. Yards are currently working onprojects such as advanced alu-minium tug construction, ship repairsand conversions, and sonar domesfor the United States Navy. Québecshipbuilders also have experiencewith fabrication for the offshore oiland gas market.

Yards located in the Great Lakesregion account for 13 percent of thetotal national employment in theshipbuilding and industrial marinesector. Current projects include refit-ting existing Lakers with new fore-bodies and state-of-the-art, self-unloading technology, ship repairsand conversions, high-speed patrolboats for export and various vessels forthe Canadian Coast Guard. Great

Lakes shipbuilders also have experi-ence in double hulling existing single-hull vessels.

British Columbian yards make up25 percent of the total nationalemployment in the shipbuilding andindustrial marine sector. Yards are cur-rently working on various projects suchas cruise ship repairs and conversions,the refit of a naval vessel and bargeconstruction. British Columbia yardshave specialized abilities in serving thebooming cruise ship market, in ferryconstruction, tug and barge construc-tion, and luxury yacht building for theexport market.


SHIPYARDESTIMATED CURRENT

EMPLOYMENTSHARE OF TOTAL

EMPLOYMENT

14 shipyards and 1 offshore oil and gas (OOG) fabrication facility in Atlantic

2315 50%

5 shipyards in Québec 570 12%

13%

25%

N/A

5 shipyards in Ontario 632

6 shipyards in British Columbia

1 shipyard in Northwest Territories

TOTAL: 32 shipyards, national 4707

1190

N/A

Table 3 Canadian Shipyard Jobs / Capacity Statistics

Source: Industry Canada, estimate based on industry sources, May 2001N/A = not available

IMPORTS EXPORTSSHARE OF REGIONS INTOTAL SHIPBUILDING TRADE

United States 12.4% 72.7%

South America – 21.3%

Asia 67.7% 2.2%

European Union 13.4% 1.2%

Others 6.5% 2.6%

Table 2 Shipbuilding Industry Trade, Average 1996–2000


32


1. Allied Shipbuilding

2. Fraser Shipyard & Industrial

3. Jenkins Marine

4. Nanaimo Shipyard

5. Point Hope Shipyard

6. Washington Marine Group (Vancouver and Victoria Shipyards, Vancouver Dry Dock)

Shipbuilding Facilities are Located Throughout Canada

BRITISH COLUMBIA

1. St. John’s Dockyard Ltd.

2. Terra Nova Alliance/ PCL (OOG)

3. Friede Goldman Nfld. Ltd.

4. Burin Industries

5. C&W Industrial Fab. & Marine Equipment

NEWFOUNDLAND

31 Shipyards1 (OOG) Facility

NATIONAL

1. Fraser Marine & Industrial

2. Heddle Marine

3. Hike Metalworks

4. Metalcraft

5. Port Weller Dry Docks

ONTARIO

1. Les Industries Davie

2. Chantier Naval Forillon

3. Chantier Naval Matane

4. Les Industries Océan

5. Verreault Navigation Inc.

QUÉBEC1. North Sydney Marine

2. A. F. Theriault & Son Ltd.

3. Lunenburg Industrial Foundry & Engineering

4. Pictou Industries

5. Halifax Shipyard

6. Dartmouth Marine Slips

7. Shelburne Ship Repair

8. Steel & Engine Products

NOVA SCOTIA

1. Saint John Shipbuilding Ltd.

NEW BRUNSWICK

1. East Isle Shipyard

PRINCE EDWARD ISLAND

* Some smaller facilites are not included on this map.

1. Northern Transportation Co. Ltd.

NORTHWEST TERRITORIES

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