French-Italian Consortium offers Canada a deal on a new fleet of frigates

By: David Pugliese, The National Post 

The proposal is for Canada's chosen contractor, Halifax-based Irving Shipbuilding, to build 15 ships based on the consortium’s FREMM frigate design, that could save the Federal Government close to $32 Billion. 

A FREMM frigate sails off the coast of France in 2016.Boris Horvat/AFP/Getty Images

OTTAWA — In a surprise twist in Canada’s shipbuilding saga, a foreign consortium is offering the country a way to build a fleet of warships at a guaranteed price of $30 billion — a potential savings of $32 billion.

Fincantieri of Italy and Naval Group of France — major forces in international shipbuilding — don’t believe the current $62-billion Canadian Surface Combatant program, already beset with delays and increasing costs, will be successful, industry sources told Postmedia.

Instead, the French and Italian governments have proposed that Canada’s chosen contractor, Halifax-based Irving Shipbuilding, build 15 ships based on the consortium’s FREMM frigate design, which is proven and is in operation with the French and Italian navies. They are offering to guarantee the cost of the ships at a fixed $30 billion.

The deal would use Canadian technology on board the ships, sources said, and include the transfer of technology to Canadian firms so they could be involved in future sales of FREMM vessels on the international market.

As well as the French and Italian navies, Morocco and Egypt operate FREMM ships. Australia is considering them for its new naval fleet, and they are seen as a serious contender in the competition to outfit the U.S. Navy with modern frigates.

Bids for the Surface Combatant program were to have been submitted by Thursday to Irving. The company has not responded to a request for comment, and it is not known how receptive it would be to the consortium’s proposal.

The Fincantieri-Naval Group gambit is risky, as federal bureaucrats are expected to oppose it. But the potential of $32 billion in savings for Canadian taxpayers will put pressure on the Liberal government to seriously consider the offer.

Defence industry insiders said the Fincantieri-Naval Group consortium thinks it has nothing to lose by trying to circumvent the CSC procurement process, which a number of observers believe is skewed to favour a bid by Lockheed Martin Canada and the British firm BAE. They would provide Canada the Type 26 frigate that BAE is building for the Royal Navy.

Industry sources pointed out that Canada had originally asked for proven ship designs, then at the last minute loosened that restriction to allow the Lockheed-BAE bid to qualify, since the Type 26 was at the time still on the drawing board. (Construction on the Type 26 frigate began in the summer, but the first ship for the Royal Navy is not yet completed.)

Both Irving and Public Services and Procurement Canada have denied any favoritism towards BAE.

An aerial image of Irving Shipbuilding Halifax Shipyard. Irving Shipbuilding Inc.

Another team, led by Alion Canada, is offering the Dutch De Zeven Provinciën Air Defence and Command frigate. Though no other bids have yet been reported, a number of other companies were expected to put their ships in the running for the CSC program.

Fincantieri, the fourth-largest shipyard in the world, has long warned the Liberal government it believes the CSC procurement process is flawed. On Oct. 24, 2016, the firm sent then-Public Services and Procurement Minister Judy Foote a detailed outline of why it thought the acquisition process was in trouble, warning that “Canada is exposed to unnecessary cost uncertainty.”

At the time, the company proposed to Foote that a fixed-price competition be held, with the winning shipyard building the first three warships complete with Canadian systems and delivering them to Irving. The ships would have then be evaluated and, after any technical issues were worked out, Irving would have begun to build the remaining 12 vessels. That would allow work on the new ships to get underway faster, the vessels to be fully tested and the risk to the Canadian taxpayer significantly reduced, Fincantieri argued.

Foote dismissed the company’s recommendation. However, the cost of the CSC program has steadily increased. Originally set at $26 billion, the Department of National Defence later estimated the price tag at $40 billion. Then in June, Parliamentary Budget Officer Jean-Denis Fréchette estimated the CSC program would cost $61.82 billion — and warned that because of inflation, every year beyond 2018 the awarding of the contract is delayed would cost taxpayers an extra $3 billion.

There are also concerns that plans to build two supply ships for the Royal Canadian Navy and a new Polar-class icebreaker for the Canadian Coast Guard are in trouble.

The Liberals have said they can’t provide Parliament with a schedule for the delivery of the supply ships or the icebreaker because they deem such information secret.

Public Services and Procurement Canada would not comment on the reasoning behind that claim.

Canada & US Hold Joint Nuclear Exercise

By: Murray Brewster, CBC News

Canadian and U.S. officials quietly held exercises last spring to practise dealing with worst-case nuclear scenarios — running through simulated attacks on both sides of the border, CBC News has learned.

The training took place against the backdrop of federal officials in this country discreetly revising contingency plans, including one to reconstitute the federal government outside of Ottawa should the capital become "unviable" in an attack or natural disaster.

Exercises are done on an annual, or semi-annual, basis, but the latest came amid fresh urgency in light of the worsening international climate, particularly with North Korean nuclear and intercontinental missile tests, the latest of which happened Tuesday.

Related:
Canada sets aside two bunkers at military bases amid global uncertainty, North Korean threat

What is generally not well appreciated is how reliant Canada would be on the U.S. in the event of either a nuclear-tipped missile landing in this country, or some kind of terrorist dirty bomb.

Documents filed recently in Parliament, in response to a written question by the Conservatives, refer to a number of contingency plans, many of which fall back on co-operation with Washington.

A nuclear scenario was incorporated into a regular exercise, known as Staunch Maple, last spring.

It took place in both Ontario and Nova Scotia and involved Canadian CH-146 Griffon helicopters, an RCMP ASTAR-350 helicopter, and two American UH-60 Black Hawk helicopters.

The Department of National Defence acknowledged, at the time, that the training scenario involved a "security incident."

But a series of government officials, speaking to CBC News on background, confirmed the scenario was designed to test the reaction of officials to "a nuclear event."

Earlier iterations of Staunch Maple involved things such as earthquake response in B.C.

The Canadian drill, which took place last April, was conducted in tandem with a much larger U.S. exercise, known as Gotham Shield, which simulated a nuclear attack on New York City.

Much of the current political debate about the threat posed by North Korea revolved around whether the U.S. would defend Canada during a missile attack.

There has been little discussion about what the aftermath might look like and how prepared the country would be to deal with the consequences.

A spokesperson for National Defence said there are contingency plans that cover "a wide range of scenarios involving attacks on Canada, including a missile attack."

Dan Le Bouthillier said a series of contingency plans were reviewed as recently as last spring, but he added periodic assessments are made to ensure they stay current.

A senior defence official, speaking on background, said the issue of whether North Korea could effectively "hurl a hunk of metal across the Pacific and possibly hit us," has preoccupied defence planning in this country for a while.

Prime Minister Justin Trudeau acknowledged the hazard in a recent town hall but suggested it relates more to be being caught in the middle, rather than being deliberately targeted.

"There are potential challenges for intercontinental ballistic missiles from North Korea passing over Canadian territory," he said in Charlottetown.
Assistance from Washington

The answer to the question of what would happen in the event of a missile strike would depend strictly on the warhead and where it landed, according a number of current and former officials, who spoke to CBC News on background.

Canadian decision-makers would be notified of a missile launch and its trajectory by Norad's warning centre. A decision about trying to shoot it down would be made solely by the U.S., because Canada is not part of its ballistic missile defences.

Much of the initial post-impact response would fall on local police and municipalities.

The responsibility, however, would be quickly passed along to the federal government and Public Safety Canada, which is in charge of emergency management.

Picking up the phone to Washington is among the very first things Canadian officials, both military and civilian, would do in the event that the missile was nuclear-tipped.

A non-nuclear blast, although devastating, would likely not require an immediate call to Washington for assistance. It is in the aftermath of a nuclear explosion, even a small one, that Canada is vulnerable.

Members of the Canadian Joint Incident Response Unit rappel onto the deck of the ship Strait Explorer. The unit would require help from the U.S. National Guard in the event of a nuclear attack. (Adrian Wyld/Canadian Press)

The country's military, mostly through the special forces, and the RCMP have the capability to help clean up contamination sites and treat irradiated victims.

That organization is known as the Canadian Joint Incident Response Unit. But its capacity to carry out the dangerous work is limited by their size and they would require assistance of U.S. National Guard units.

A few years ago, the former Conservative government signed a memorandum with Washington to make it easier for each country's armed forces to operate on both sides of the border.

During the 2010 Vancouver Olympics, U.S. troops were quietly deployed in the event of a terrorist "dirty bomb" incident.

The commander of Canada's special forces, Maj.-Gen. Mike Rouleau wouldn't comment on the North Korean situation, nor contingency planning, but said the government's latest defence policy will allow him to increase the size of his nuclear, biological and chemical team by as many as 70 people.

The military and government officials may be well-prepared to make decisions in the aftermath of a worst-case scenario, but many experts question whether political leaders have wrapped their heads around such eventualities.

The general in charge of the country's joint operations command said cabinet ministers and the prime minister occasionally participate in exercises, and when they're not available an official will sit in their chair.

"The ideal would be everybody is available all of the time to be able to do this. That is not the world in which we live," said Lt.-Gen. Steve Bowes, who has sat in on many of the drills. "The important thing is to make sure the leader understands their authority, their responsibilities and accountability. It's not just about the individual, it's about the organization. We're much stronger in ways that don't think people appreciate."

Further Reading: 
Canada could be called on for troops in event of war with North Korea