Vanguard Magazine

the submarine we choose is probably less important than making sure that we get the sustainment piece right. I want to explore this further. Dave I'll start with you for your thoughts. DAVID HUDOCK: Thanks, Keith. Before I begin, I want to acknowledge that there is a silent service in the room here with us today, and it's not submariners. It is members of the industry that I'm in right now. The builders, the architects, and the engineers. Three years ago, I don't think there were any build- ers at Deep Blue except for me. And now there's a whole bunch. Thanks to all of you builders for your interest. It's important for Canada that the con- struction industry has an awareness of the important stuff we're talking about here. We're talking potentially about $100 bil- lion in construction projects over the next 15 years. That's in addition to a growing list of other nation-building projects that Canada wants to get moving on and piling more work on an already extremely busy industry. I want to make sure that the people in this room thinking about submarines, thinking about capability, and thinking about technology also understand that there's a whole other nuts and bolts and concrete and steel element that's going to have to be developed. That includes construction of new facilities, support for training, and support of the maintenance. That takes time. It's important to provide a little bit of background and information on all that we've been talking about at Deep Blue, and in the context of the submarines that will arrive by 2035. In the world of construc- tion and design, that's not a long time. We're probably already behind the eight ball. By 2032, 250,000 retirements are ex- pected in the construction industry. And I guarantee you that right now we are not seeing a one-for-one replacement of new people. One of the ways the construction industry is responding is by leveraging technology and innovation—not to re- place workers, but to extend the capacity and productivity of the workforce that re- mains, enabling more to be built with the people available. The second point is cost escalation. Ten years ago, the average cost of constructing hospitals across Canada was around $1,000 a square foot. Today, that average cost across Canada is just over double that. Cost escalation is something that we all have to be thinking about, es- pecially if there's going to be a significant time lag between today and when the shovel goes in ground. Project cost esca- www.vanguardcanada.com FEBRUARY/MARCH 2026 13 I N T E R V I E W "This isn't just about re-skilling existing shipyard and Navy staff; it's about building an entirely new level of capability." — Commander Darcy Byrtus RCN (Ret'd), Former President, BMT Canada lations hit a peak during COVID-19, but costs for building materials and other asso- ciated elements, including labour, continue to have annual increases, and at rates much higher than we saw pre-COVID. Another point is that there is just more construction activity on the books. Mar- kets in certain regions of the country are flooded with work. And builders and de- signers are picking and choosing what they want to go for. They don't want to pick the wrong project and risk getting tied down to a high risk, low profit contract. They al- ways think better ones are coming. We've seen a pattern since the beginning of COVID. Private developers and inves- tors have been putting their main projects on hold because they were too expensive. But guess what? With interest rates de- clining they have dusted off those plans. They've been contacting us to say they're getting ready to build that office tower, that condo, that commercial facility. Another critical consideration is the de- livery model used to engage designers, architects, and engineers. Traditional ap- proaches—where design teams work for several years before projects are tendered to construction—create long timelines and often result in higher levels of change orders. An alternative is a design-build model, where builders are engaged early with integrated design teams, operating as a single, coordinated unit. Then there are public private partnerships. PCL is an active partner in many of them. But these partnership deliveries, in the construction world, take a long time to go from begin- ning up to the point where you're ready to put shovels in ground. These are things I thought people in the room today should be aware of and should bring into your thinking for the submarine program. It's important to consider how quickly you want things, how much risk are you willing to take, and so on.

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