Vanguard Magazine

shiPbuilding www.vanguardcanada.com OCTOBER/NOVEMBER 2020 31 Dimitrieff thinks the failure of the ITB system is driven by the battle for ideologi- cal priorities. There is a constant pull be- tween the desire for the lowest cost com- pliant bid to the country, and conversely to the larger strategic importance of devel- oping a high value integrated supply chain in Canada. Thus far it seems the former priority has consistently won out. "It's a shame as the capability exists. If given an opportunity to participate, firms like ours could provide Canada with economic and strategic value," he says. While companies are allowed to bank credits to use on future projects (within certain timelines and specific factors) un- der ISED policy, there is reportedly a back- log in ITB credits that have not been used. And those that have, may not be used in a way that benefits the Canadian people, either directly or indirectly. One example cited by The Globe and Mail would be the case of a $40 million investment in a French fry factory in Alberta. This kind of investment may produce a limited number of jobs but is questionable in the context of developing Canadian sovereign manufacturing capability, de- spite the criteria under ITB rules having been met. The key objective of the ISED and ITB policy is to support the Canadian defence industry. Bodo Gospodnetic, the President of Dominis Engineering Ltd., Canada's lead- ing propeller manufacturer, says that "In- novation, Science and Industry Canada funds a lot of research in home-grown technology which is wonderful. However, the government is failing to give these same companies the opportunity of get- ting the technology it has invested in on its own ships. It just does not make sense." "I think the NSS's procurement process is not working as intended. The shipyards and multinational companies are ignoring Canadian manufacturers with proven track records in supplying propulsion compo- nents for naval vessels. When we approach the prime contractor to explain what we are doing, we are told we are unable to make a presentation as it will prejudice the supplier selection process. I find this a little rich. They should be giving Canadian companies the same opportunities to compete for the contracts as they give companies in their ex- isting supply chains," he adds. Dominis is supplying water jet impellers to the US Littoral Combat Ship program and has supplied spare CP propeller blades for the Canadian Halifax-class frigates. For many Canadian SMEs, the NSS and ITBs have been something of a lottery and may not have sufficiently supported the county's domestic maritime industry as one might have expected. Certainly, this is the perception of Thordon, Patriot, and Dominis, all of whom have found the doors of opportunity firmly closed, no matter how hard they knock. Indeed, such has been the challenges faced by each one of these world-class companies, they joined forces in a Thor- don-led consortium to develop the Cana- dian Integrated Shaftline System (CISS), a complete turnkey propulsion package encompassing the component parts pro- duced by each of the three companies: shafts, bearings, seals and propellers. "With Thordon, Patriot, and Dominis coming together in this consortium we can ensure our voice is heard, we are loud- er collectively," says Gospodnetic. "Indi- vidually, we were all banging our heads against a brick wall but CISS, hopefully, offers a better total value proposition. It will encourage the system integrators to open the door and at least listen to what we, as a consortium, have to say." Whether the rules are flawed or just open to differing interpretations, there is no denying the 2014 ITB Policy and CCV policy by ISED appears to have failed to create the kind of opportunities expected ten years ago. Given what the government said at the time that NSS is all about "undertaking major ship procurements in a smarter, more effective, efficient way that sustains jobs, strengthens the marine sector, and provides the best value for the taxpayer", then there does appear to be a significant gulf between principle and practice. "The strategy was developed to invest in Canada, to support workers in Canada, to support Canadian technology, to reduce procurement costs, but it really isn't work- ing as intended. I think the reality is a far cry from the job creation and economic stimulus Gail Shea [then Minister of Fish- eries and Oceans] spoke of when the NSS was launched," says McGowan. "Sourcing a state-of-the-art, made-in- Canada integrated propulsion system that supports Canadian jobs and secures critical component supply makes perfect sense. It meets the originally intended NSS strategy and supports the economy and security of supply. Our Defence procurement policy does not appear to have achieved the in- tended results for Canadians." At the time of writing, the consortium members have been able to engage with European integrators including those in- volved with the UK's T26 program, and is hopeful that these discussions will lead to the development of a full naval propulsion shaftline assembly in Canada. This, of course, is dependent on Canada, the CSC prime contractor and their team of integrators having more meaningful conversations about how CISS can work with them. Patrik Wheater is a journalist and editor with more than 25 years' experience writ- ing about the global maritime, defence, and energy industries. In 2015, he set up the specialist public relations consultancy Sea- borne Communications to represent those companies with a commitment to technical innovation, energy efficiency and environ- mental sustainability. He served as a mem- ber of the marine engineering branch in the Royal Navy. "Individually, we were all banging our heads against a brick wall but CISS, hopefully, offers a better total value proposition. It will encourage the system integrators to open the door and at least listen to what we, as a consortium, have to say." — Bodo Gospodnetic, the President of Dominis Engineering Ltd.

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