Throw current policies on shipbuilding overboard industry committee urges Ottawa

Ottawa should throw most of its policies concerning domestic shipbuilding overboard and start fresh with legislation that can improve the health of the ailing sector, an industry-led committee has concluded in its report to the federal government.

According to newspaper reports, the committee in its 60-page report the committee asks Industry Minister Brian Tobin to change the federal government’s philosophy from one of waiting for the world to abandon subsidies and act like Canada, to one of accepting that the sector is riddled with distortions so Canada must join the game.

More than 30 recommendations are contained in the report reflecting the concerns and proposals of industry stakeholders including shipyards, organized labour,associations, marine shippers and provincial and municipal governments.

“We will begin studying the recommendations immediately,” said Minister Tobin. “I am committed to responding to this report in the months ahead, following consultations with my Cabinet colleagues and the provinces. Our goal is to develop a joint package to help the industry meet the challenges it faces.”

The proposed policies are designed to improve Canada’s place among the world’s shipbuilding nations where some, such as China, Korea, Japan and Europe, offer big subsidies to build ships. The United States as well is unlikely to ease its protectionist shipbuilding policy known as the Jones Act. It dictates that all domestic shipping must be carried on U.S.-built, U.S.-flagged, and American-crewed ships, closing the door to ships built in all other countries.

Instead, the committee recommends a series of measures designed to encourage Canadian companies to build domestic ships and allow Canadian shipyards compete successfully for international work.

For example, the committee recommends that government-backed financing packages should be more generous and extend to domestic yards. The current policy includes an Export Development Corporation financing package that guarantees 80 per cent of a loan to build a ship under a 12-year repayment period. It is not available for domestic work.

The Committee was co-chaired by Mr. Peter Cairns, President of The Shipbuilding Association of Canada, Mr. Les Holloway, Executive Director of the Marine Workers Federation, Mr. Philippe Tremblay, Executive Director of
the Fdration de la mtallurgie, Confdration des syndicats nationaux and Mr. Peter Woodward, Vice President, Woodward Group of Companies.

Minister Tobin named the co-chairs at a national shipbuilding conference held last October in St. John’s Newfoundland. The co-chairs were asked to consult widely with industry stakeholders to develop proposals for practical and workable measures to revitalize the Canadian shipbuilding and industrial marine sector. The co-chairs met with these stakeholder groups in seven public roundtables across Canada.