June 4, 2019 – Irving Shipbuilding is committed to maximizing Canadian content and benefit through our construction of the Royal Canadian Navy’s Arctic and Offshore Patrol Ships (AOPS). Our AOPS contract requires us to achieve at least 50% of Canadian Content Value (CCV) in direct work, recognizing that in some instances, we must procure material for the ships internationally.
Today, approximately 70% of the work on AOPS is direct Canadian content. This is work that a Canadian supplier does with us directly related to the AOPS program.
Any work performed outside of Canada is offset by making investments in Canada to ensure that 100% of the value of the AOPS contract is spent in Canada. These are called Indirect Industrial and Technological Benefits (Indirect ITB).
The diesel electric engines onboard each AOPS are a good example of how the Indirect ITB program works. Irving Shipbuilding selected General Electric (GE) to provide the engines for each AOPS. There is no company in Canada that produces this type of ship engine; therefore, the engines had to be procured from outside the country. To offset this, GE adjusted its global supply chain to include Canadian companies and made investments in innovative research taking place within Canada. These investments are with Canadian organizations involved with oil and gas, regenerative cell technology, and jet aircraft engines.
Indirect ITB transactions create opportunities for all Canadian industries to benefit from defence procurement, help to grow our overall economy and make Canada more innovative.
Other examples of indirect ITBs from Irving Shipbuilding and major subcontractors include:
- Lockheed Martin Canada, Terma, and Nanowave
- Terma is providing a radar system to Lockheed Martin Canada for AOPS. To offset Terma’s work in Denmark, the company selected Ontario’s Nanowave Technologies as a research and development partner.
- Shaping Purpose
- Irving Shipbuilding contributed $200,000 to Shaping Purpose to support a Canada-wide research study that aims to help Canadian Armed Forces members and veterans experience a positive transition to civilian life.
- GE Canada and the Centre for Advanced Therapeutic Cell Technologies
- GE Canada is providing the propulsion systems for each AOPS. To offset the work being done outside of Canada, the company has invested $20 million through GE Healthcare Canada in the Centre for Advanced Therapeutic Cell Technologies (CATCT), accelerating the development of cell manufacturing technologies to improve regenerative medicine-based therapies.
- Irving Shipbuilding Centre of Excellence
- Irving Shipbuilding has committed to investing $250,000 per year in the Irving Shipbuilding Centre of Excellence for the duration of its National Shipbuilding Strategy contracts. Managed by NSCC, the Centre of Excellence builds opportunities and supports training for careers in shipbuilding for Nova Scotians, with focus on diverse communities currently under-represented in shipbuilding and the marine sector. To date more than 100 individuals have received bursaries or participated in education programs. Through this initiative the Pathways to Shipbuilding program was created. Four Pathways to Shipbuilding classes have provided training and employment opportunities for women, Indigenous Peoples, and African Nova Scotians to date. Successful graduates who meet employment eligibility criteria will be hired by Irving Shipbuilding as positions are available.
- BAE and IRCO Automation
- BAE Systems is supplying the gun system for each AOPS. To offset BAE’s work done outside of Canada, the company has selected IRCO Automation, a small Ontario-based business, to design, fabricate and install a complete line of mechanized welding and positioning systems to help make submarine missile tubes for the United States Navy’s Virginia class submarines.
In addition to the direct and indirect investments as a result of the AOPS program, Irving Shipbuilding committed to investing 0.5% of contract revenue toward creating a sustainable marine industry in Canada as part of the Value Proposition program. As of March 31, 2019, Irving Shipbuilding has committed over $12.5 million in value proposition investments to support 11 initiatives across the country that will strengthen and grow the Canadian Marine Industry in the areas of workforce development, technology and commercialization.
Examples of Value Proposition Investments include:
- Centre for Ocean Ventures and Entrepreneurship (COVE)
- Irving Shipbuilding has committed $4.52 million to COVE, an collaborative facility for applied innovation in the ocean sector, located on the waterfront in Dartmouth, Nova Scotia. The investment supports COVE’s operations and ocean technology programs.
- Nunavut Arctic College
- Irving Shipbuilding’s $2 million investment focuses on areas of importance to Canada’s Arctic communities and marine industry, including building oil spill monitoring and response capacity in Nunavut and access to safe drinking water.
- Marine Additive Manufacturing Centre of Excellence (MAMCE)
- Irving Shipbuilding has committed $750,000 to MAMCE. The Centre is the first of its kind in Canada to combine research, commercialization, workforce development, and training related to the use of Additive Manufacturing, commonly called 3-D printing, as a method for manufacturing certified parts for the marine industry.