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Procurement

Canadian Surface Combatant

  • Naval combat ships are critical for defending Canadian waters, and contribute to naval diplomacy and international security.
  • To help fulfill that critical function, National Defence is procuring 15 new Canadian Surface Combat (CSC) ships for the Royal Canadian Navy.
  • These ships will be capable of operating independently, alongside our allies and partners, and will deliver the combat power to meet future threats at sea and in coastal environments.
  • National Defence is currently working with industry to finalize the selected ship design in preparation for the building phase of the project.
  • We expect to cut steel on the first ship in the 2024 timeframe, with anticipated delivery in the early-2030s.
  • In addition to the capabilities it will provide the Royal Canadian Navy, this project’s extensive budget, between $56-60 billion, will promote the growth of key Canadian industrial capabilities.
  • This project will create investments in innovation, supplier development, and export opportunities with a focus on cyber security, clean technology, and the marine sector.
  • National Defence remains committed to updating Canadians on the timelines and cost of this project as it evolves.

Key Facts

  • Budget: Estimated between $56-60B.
  • Timeline:
    • 2024: Construction is anticipated to begin.
    • 2030-2033: Anticipated first delivery.
    • Late 2040s: Anticipated last delivery. 
  • 2021-2022 Main Estimates: National Defence requested $829.1M to progress the ship design, contract for future equipment, and to initiate equipment and weapons integration work.
  • Economic benefits:
    • More than 10,000 jobs over the 25 year build period.
    • Generating at least $31B in GDP.
  • GBA+: Canadian Surface Combatant ships will be specially designed to ensure equality and accommodation of gender, cultural and religious minorities.
    • Berths, wash places, bathrooms, medical facilities, and off-duty areas will be designed to accommodate all genders and promote privacy;
    • Flexible spaces will be included to allow for religious and spiritual accommodation; and
    • Integrated Wi-Fi will facilitate crew communications with families back home.
  • Indigenous relations: Under the National Shipbuilding Strategy, Irving Shipbuilding Inc. is leading several initiatives, including:
    • The Pathways to Shipbuilding class for Indigenous Students program offers classes for Indigenous students in Pipe Trades, and employment for 15 qualifying graduates as registered apprentices.  
    • The Nova Scotia Community College Irving Shipbuilding Centre of Excellence aims to foster job training and apprenticeships for Indigenous Canadians, visible minorities, and underrepresented groups in shipbuilding.

Details

  • The Canadian Surface Combatant will replace and update the capabilities found in both the retired Iroquois-class destroyers and the Halifax-class frigates. This single class of ship will be capable of meeting multiple threats on the open ocean and the coastal environment.
  • The new warships will be able to conduct a broad range of tasks, including:
    • Delivering decisive combat power at sea, either independently or as part of a Canadian or international task group;
    • Supporting the Canadian Armed Forces and Canada’s allies ashore;
    • Conducting counter-piracy, counter-terrorism, interdiction and embargo operations for medium intensity operations; and,
    • Delivering humanitarian aid, search and rescue, and law and sovereignty enforcement for regional engagements.
  • In February 2019, the Government selected a design for CSC, and announced that Irving Shipbuilding had contracted Lockheed Martin Canada to provide the design and design team.
  • To prepare for the actual building phase of these ships, the Government is working with Irving Shipbuilding, Lockheed Martin Canada, and their subcontractors to advance the ship design and technical systems.
  • Early in 2019, Alion and Navantia, the two non-selected bidders on the Canadian Surface Combatant Request for Proposals filed for judicial reviews asking the Federal Court to set aside the decision that Lockheed Martin Canada was the selected bidder. In November 2019, Alion discontinued its applications for judicial review.

PBO cost estimate:

  • National Defence’s current cost estimate for the CSC project is between $56 and $60 billion.
  • The difference between the Parliamentary Budget Officer (PBO)
    and the National Defence cost estimate is primarily due to methodology used in the cost modeling.
  • While the PBO cost model emphasizes weight and weight increases as a primary cost factor, and includes taxes, National Defence’s model excludes taxes and, while it considers weight as a factor, it also incorporates actual known prices for equipment required to build the ships.

Joint Support Ships (JSS)

  • Canada’s Joint Support Ships will provide crucial at sea replenishment capabilities and will be a major addition to the Royal Canadian Navy fleet.
  • The two new Joint Support Ships will have standard military capabilities, enabling the Navy to defend Canada and contribute to international peace and security.
  • These ships will also provide the Royal Canadian Navy and Allies with essential supplies and fuel while they are deployed around the world, and provide protection in high-threat environments.
  • Despite the impact of COVID-19 on supply chains, construction on the first ship remains underway.
  • Timing for the construction of the second ship is being considered in light of the impacts of COVID-19.
  • This project will directly benefit Canadians by sustaining 3,900 jobs and providing $2.4 billion of investment into the Canadian economy.

If pressed on the interim solution (MV Asterix):

  • The Asterix is an interim solution while the Joint Support Ships are built.
  • While the Asterix is not a long-term solution, it ensures that the Royal Canadian Navy’s effectiveness and readiness is not compromised.

Key Facts

  • Budget: Up to $4.1B.
    • $3.1B used to purchase the ships and initial spares.
    • $1.0B will be used for supporting costs.
    • The impact of COVID-19 on the overall budget is currently under review.
  • Parliamentary Budget Officer estimate: $4.1B.
  • 2021-2022 Main Estimates: National Defence requested $577M to continue construction of the first ship and commence construction of the second ship.
  • National Defence is assessing the schedule and cost impacts of COVID-19 on procurement, including:
    • COVID-19 related production impacts;
    • Skilled labour shortages; and,
    • Supply chain issues impacting availability and delivery of parts and materiel.
  • Timeline:
    • Schedules are being assessed in light of COVID impacts.
    • Cut steel on the second Joint Support Ship is currently under review.
    • Planned delivery date of the first Joint Support Ship is currently under review.
    • Planned delivery date for the second Joint Support Ship is currently under review.
  • GBA+: The Joint Support Ships were designed specifically to:
    • Accommodate a mixed-gender crew, by including: gender-inclusive toilets and wash places; private showers and changing areas; chair heights and sightlines;
    • Provide Wi-Fi to facilitate crew communications with families back home; and,
    • Include modern fitness facilities, a library, and a computer lab.

Details

  • In 2013, after a rigorous interdepartmental selection based upon affordability, capability, and risk, National Defence selected the German Berlin Class design for its Joint Support Ship (JSS) project as it offers the best value to Canada.
  • Public Service and Procurement Canada selected Seaspan’s Vancouver Shipyards as the prime contractor to build these vessels for the Navy.
  • In June 2020, a $2.4 billion contract (including taxes) was awarded to Seaspan’s Vancouver Shipyards to progress with full-rate construction.
  • The two new JSS are intended to replace the Navy’s Auxiliary Oiler Replenishment vessels. They will provide at-sea support to naval task groups, limited sealift capabilities, and support to operations ashore.
  • The new JSS will have capabilities such as:
    • Underway support to naval task groups:
      • Re-supply of fuel, ammunition, spare parts and other supplies between ships at sea;
      • Operation and maintenance of helicopters; and,
      • Task group medical and dental facilities.
    • Sealift: JSS will be capable of transporting and delivering cargo both in support of task group operations and in support to operations ashore.
    • Support to operations ashore: To meet a range of possibilities in an uncertain future security environment, the JSS will leverage its onboard facilities to support operations ashore, including anything from combat to humanitarian and disaster relief.
  • JSS survival capabilities are:
    • Equipped with systems to detect and protect against chemical, biological, radiological, and nuclear threats.
    • Equipped with a full range of features and systems that enhance their survivability and allow them to fully integrate with other warships (e.g., have a combat management system, multiple weapons systems, an electronic support measures suite, and dual shafts for enhanced redundancy).

Arctic and Offshore Patrol Ships (AOPS)

  • Arctic and Offshore Patrol Ships (AOPS) are critical to increasing Canadian presence in the Arctic and supporting Canadian sovereignty.
  • National Defence is making major progress on this procurement project: one ship is already operational, a second has been accepted, and we anticipate delivery of the remaining four by 2025.
  • Construction on the third ship, HMCS Max Bernays, is progressing and we look forward to its delivery this year.
  • These ships are already demonstrating that they are highly capable and versatile vessels.
  • For example, HMCS Harry DeWolf recently completed a circumnavigation of North America which included a transit of the entire Northwest Passage, the first Royal Canadian Navy ship to do so since 1954.
  • We also look forward to the first operational deployment of HMCS Margaret Brooke in 2022, joining the HMCS Harry DeWolf as part of Operation NANOOK.
  • National Defence also recognizes the importance of working closely with Indigenous and Northern communities as these ships transit their territories.
  • That is why each ship will be affiliated with an Inuit region and will be used to build strong ties with these remote communities.
  • With a budget of $4.3 billion, this project benefits the Canadian economy by sustaining 2,000 jobs annually.
  • National Defence looks forward to delivery of the final ship in 2025.

Key Facts

  • Budget: Up to $4.3B.
  • 2021-2022 Main Estimates: National Defence requested $389M to continue funding implementation phase activities.
  • Timeline:
    • July 31, 2020: The first AOPS vessel was delivered. 
    • 2022: Delivery target for the third ship.
    • Summer 2022: Production of the sixth and final ship for the RCN is expected to begin.
    • 2025: Delivery target for the final ship.
  • COVID-19 impacts: Workforce availability, workplace efficiency, and global supply chains. The full impact of the pandemic on the project timeline is being assessed.
  • Indigenous Relations: Recently, HMCS Harry DeWolf visited 5 communities in Nunavut. In each of the communities HMCS Harry DeWolf:
    • Raised awareness of affiliation;
    • Conducted community engagements;
    • Held leadership discussions with senior Hamlet Administration Officers and Elders; and,
    • Conducted ship tours.
  • GBA+: The AOPS were designed to accommodate a mixed-gender crew:
    • Reduced cabin occupancy will facilitate a mix-gendered crew, create privacy, and promote greater comfort;
    • Flexible use spaces will accommodate various spiritual practices and promote welfare and team cohesion; and,
    • Integrated Wi-Fi will facilitate crew communications with families back home.

Details

  • Strong, Secure, Engaged committed to the acquisition of five to six Arctic and Offshore Patrol Ships. In November 2018, the Government of Canada announced a decision to acquire a sixth vessel.
  • The ships are capable of operating in 120-centimetre thick ice.
  • These vessels will be able to perform a wide variety of tasks, including:
    • Surveillance operations of Canadian waters;
    • Support of sovereignty operations;
    • International operations;
    • Humanitarian assistance, emergency response and disaster relief; and,
    • Search and Rescue.
  • The Arctic and Offshore Patrol Ships will operate in the Arctic between June and October, providing a greater and longer Canadian Armed Forces presence in the North.
  • Indigenous Relations:
    • HMCS Harry DeWolf was formally affiliated with the Qikiqtani region of Nunavut in May 2019.
    • The remaining AOPS will be affiliated with the following regions in the Inuit Nunangat: Kitikmeot, Kivalliq, Inuvialuit, Nunavik, and Nunatsiavut.

Victoria-Class Submarine Modernization Project

  • Victoria-class submarines are among Canada’s most strategic assets for conducting surveillance of Canadian, international, and near Arctic waters, while also supporting allies.
  • To ensure these important vessels can operate into the 2030s, National Defence is currently undergoing a modernization of Canada’s fleet of four Victoria-class submarines.
  • We’re pleased that modernization efforts have started, with projects focusing on quality of life and habitability to be implemented in HMCS Victoria beginning this year.  
  • This modernization will improve submarine living and deployment conditions, joint force capability with onshore operations, and ensure survivability against future threats.
  • The improvement of living conditions will also take into account gender-based considerations for privacy and functionality in various areas of the submarines.
  • This extensive project is valued at up to $1.0 billion and will benefit Canadian industrial and technological sectors and provide robust economic benefits for Canada.

If pressed on AUKUS alliance:

  • Canada maintains strong military relations and intelligence sharing agreements with AUKUS countries, regardless of the alliance.
  • As a Pacific nation, Canada will continue to play an active role in the Indo-Pacific region, and maintain a persistent presence in the Indo-Pacific to support peace, security, and Canadian interests in the region.

Key Facts

  • Timeline:
    • 2022: First modernization start date.
    • 2033: Full fleet modernized and operational.
  • Fleet Status:
    • HMCS Victoria is undergoing routine maintenance prior to entering into a planned extended maintenance period in summer 2022 until summer 2025.
    • HMCS Windsor is undergoing routine maintenance that is expected to be complete by summer 2022.
    • HMCS Corner Brook will return to sea this year, 2022.
    • HMCS Chicoutimi will return to sea in 2023.
  • Recent Submarine Force activities include:
    • HMCS Windsor participated in Cutlass Fury 21, a Canadian-led, multinational exercise in the North Atlantic to improve interoperability with the United States and France.
    • HMCS Victoria participated in two exercises in 2021 alongside other RCN vessels and Maritime Patrol Aircraft.
    • Total submarine days at sea in 2021: 162 (72 days for HMCS Windsor and 90 days for HMCS Victoria).
  • Economic benefits:
    • Work to install the acquired equipment will be conducted by Canadian industry in Canada. 
    • The maintenance and modernization project will support jobs across Canada, both at shipyards and through supply chains.
    • Supply chains for equipment will also provide opportunities for Canadian small and medium sized businesses.
  • GBA+: New equipment will enhance accessibility for crew members, including improvements in both privacy and functionality of:
    • Sleeping areas;
    • Wash places (including gender-neutral washrooms); and,
    • Dining/social areas.

Details

  • Canadian submarines deliver a world-class, force-multiplying deterrent effect as well as an unmatched sovereign defence and security capability.
  • These submarines are capable of covertly monitoring evolving situations at home and abroad.
    • At home, submarines provide critical, sovereign force protection capacity for our sea-based forces when required.
    • Abroad, these submarines can conduct “indications and warnings” and vital joint-targeting information, weapon delivery, or Special Operations Force insertion.
  • As highlighted in our Defence Policy, Strong, Secure, Engaged, submarines are part of a balanced mix of platforms which enable the Royal Canadian Navy to meet Canada’s domestic and international needs. With this fleet structure, the Royal Canadian Navy is able to sustain a major international operation while retaining sufficient capacity to:
    • Maintain minor operations and/or respond to maritime security taskings at home;
    • Maintain a routine presence in Canada’s three oceans; and,
    • Contribute to operations in support of North American security.
  • The Submarine Force’s wide-reaching capabilities are also invaluable in meeting Canada’s international objectives and supporting NATO allies. As a submarine-operating NATO nation, Canada has privileged access to intelligence that it would not otherwise have.
  • The decision to modernize remains the most effective means of ensuring continued submarine operations for the Royal Canadian Navy into the mid-late 2030s.
  • The Victoria-class Modernization project will focus primarily on enhancing three distinct capabilities:
    • Habitability – to improve habitability and deployment conditions on-board Victoria-class submarines;
    • Joint Force Capability – to position the Victoria-class submarines to contribute meaningfully to joint operations ashore; and
    • Survivability – to ensure the survivability of the Victoria-class submarines against an evolving complex threat in an ever changing battle space.

Future Fighter Capability Project (FFCP)

  • A modern fighter aircraft fleet is vital to protecting North American airspace and supporting our defence and security efforts at home and abroad.
  • That is why Canada launched an open and transparent competition to acquire 88 new advanced aircraft.
  • I am pleased to report that we are making significant progress on this complex procurement.
  • The Government recently completed the evaluation of submitted bids and determined that two bidders – Saab and Lockheed Martin – will continue on in the competition.
  • Over the coming weeks, Canada will make a determination on the next steps in the solicitation process.
  • We are working towards awarding a contract later this year, with first aircraft delivery as early as 2025.
  • To prepare for the arrival of these aircraft, we have already taken steps to prepare for construction of some of the new fleet’s facilities in Bagotville and Cold Lake. 
  • National Defence continues to work with industry partners to leverage Canadian expertise, support Canada’s aerospace and defence industry, and provide jobs for Canadians.
  • We are confident this competitive process will deliver the best results for the Canadian Armed Forces, while providing economic benefits for Canada.

Key Facts

  • The procurement process is led by Public Service and Procurement Canada with oversight by an independent fairness monitor and third-party reviewer.
  • Budget: $19B in funding has been established within Strong, Secure, Engaged.
  • Current Competition Status:
    • Ongoing - Eligible suppliers remaining: 
      • Saab (Sweden); and
      • Lockheed Martin (United States of America).
  • 2021-2022 Main Estimates: National Defence requested $39.8M to continue the evaluation of bidders’ proposals, and conduct infrastructure design and site preparation activities.
  • Economic Benefits:  
    • Eligible suppliers were required to submit economic benefits proposals outlining planned investments in Canadian industry that support Canada’s Value Proposition objectives.
    • Anticipated construction of Fighter Squadron facilities will generate over 900 jobs.
  • GBA+: Bagotville and Cold Lake fighter squadron facilities are planned to include:
    • Gender-inclusive washrooms and barrier free facilities;
    • Cultural rooms to accommodate members of diverse backgrounds and faiths; and
    • Nursing rooms.
  • Indigenous relations: The infrastructure design-builders in Bagotville and Cold Lake will prepare Indigenous benefit plans to support Indigenous procurement objectives.

Details

Future Fighter Capability Project

  • In December 2017, the Government of Canada launched an open and transparent competition for the permanent replacement of Canada’s fighter aircraft fleet.
  • The objective of the Future Fighter Capability Project is to successfully acquire and transition into service 88 advanced fighter aircraft along with the associated equipment, weapons, infrastructure, information technology, and sustainment, including training and software support.
  • This project will leverage Canadian capabilities and support the growth of Canada’s aerospace and defence industries.
  • In February 2018, the Government announced five eligible government-led Supplier teams, including:
    • Dassault (France);
    • SAAB (Sweden);
    • Airbus (United Kingdom);
    • Boeing (United States of America); and,
    • Lockheed Martin (United States of America).
  • In November 2018, the Dassault (France) team informed Canada of its decision to officially withdraw from the competition, and in August 2019, the Airbus (United Kingdom) team also informed Canada that it was withdrawing. Only the three remaining Supplier teams were eligible to submit proposals under the Future Fighter Capability Project competitive procurement process.
  • By July 31, 2020, the Government of Canada had received bids from all three suppliers eligible to participate in the Future Fighter Capability Project competitive procurement process.
  • On December 1, 2021, the Government of Canada announced that following evaluation of the proposals submitted, 2 bidders remain eligible under the Future Fighter Capability Project competitive procurement process—SAAB (Sweden) and Lockheed Martin (United States of America).
  • Canada has implemented a Value Proposition that seeks to motivate generational investments in Canada’s aerospace and defence industries over the coming decades.
  • These investments will drive innovation, exports, and skills development in Canada’s Key Industrial Capabilities, including in such areas as In-Service Support, Aerospace Systems and Components, and Space Systems.

GBA +

  • Canada’s Industrial and Technological Benefits Policy on Defence Procurement now requires submission of Gender and Diversity Plans as part of the value proposition submission for projects of this scale.

Construction of Fighter Squadron Facilities

  • A $12.1 million design contract for a Fighter Squadron Facility in Bagotville was awarded on September 28, 2020.
  • A $9.2 million design contract for a Fighter Squadron Facility in Cold Lake was awarded on August 13, 2020.
  • Construction on both facilities is expected to begin shortly after the awarding of contracts for the Future Fighter aircraft this year.

Strategic Airlift Capability

  • Strategic airlift is critical for the Canadian Armed Forces to conduct operations at home and abroad.
  • The Canadian Armed Forces routinely uses its strategic airlift aircraft to transport personnel and cargo, including for vaccine distribution and for evacuations.
  • In August 2021, strategic airlift aircraft safely evacuated 3,700 individuals from Afghanistan.
  • Through the Strategic Tanker Transport Capability project, National Defence will augment the Canadian Armed Forces’ strategic airlift capability.
  • This project will enhance National Defence’s ability to conduct in-flight refueling and strategic airlift operations.
  • The project is currently in its Definition phase and we anticipate a contract to be awarded in the 2022-2023 timeframe.
  • National Defence is also exploring options to expand its strategic airlift capability and further contribute to operations at home and abroad.
  • We will continue to ensure that we have the right strategic airlift capabilities to assist Canadians when required.

Key Facts

  • Operation Vector: The Canadian Armed Forces used strategic airlift to transport, store, and distribute COVID-19 vaccines throughout Canada between December 2020 and June 2021.

Strategic Tanker Transport Capability Project (STTC):

  • Budget: Expected project cost between $1 billion and $5 billion.
  • Timeline:
    • Winter 2022: request for proposal.
    • 2022-2023: contract award date.
    • 2028-2029: anticipated initial operational capability.
  • Economic benefits: The Strategic Tanker Transport Capability Project qualifies under the Industrial and Technological Benefits policy, ensuring the contractor undertakes business activity in Canada equal to the value of the contract.
  • GBA+: Engagements in the areas of GBA+ and Indigenous considerations have been initiated and are being further developed for application within the scope of the STTC project.

Details

  • Mandate Letter 2021: “Work with the Minister of Foreign Affairs and the Minister of International Development to expand Canada’s engagement with allies, partners and international organizations in order to promote peace and security, provide humanitarian assistance and support international emergency responses. This will include expanding Canada’s long and short-range strategic airlift capability to increase Canada’s contribution to NATO coalition and allied military operations abroad, the deployment of CAF personnel to provide assistance, training or operational support to enhance international peace, security and stability and continued support for UN operations.”
  • Canada’s existing fleet of aircraft with Strategic Airlift Capability consists of: 5 CC-150 Polaris; 5 CC-177 Globemaster III; and 4 CC-144 Challenger.

The Strategic Tanker Transport Capability Project:

  • The STTC project is examining expanding strategic airlift capabilities of the CAF.
  • This new fleet will conduct multiple tasks, such as in-flight refuelling of other aircraft, military personnel and cargo airlift, medical evacuations, and strategic transport of Government of Canada officials.
  • An Invitation to Qualify was issued in February 2021.
  • The invitation to qualify identified Airbus Defence and Space SA as the only qualified supplier. Discussions are progressing well.

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