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Value for Money 2023: The Conference Board of Canada Assesses the National Shipbuilding Strategy’s Impact

Ottawa, ON May 30, 2023 -- The Conference Board of Canada has completed a detailed assessment of the current and future economic impacts of the National Shipbuilding Strategy (NSS) at the Halifax Shipyard (2013-2025).

Between 2013 and 2025, building the Arctic Offshore and Patrol ships as well as designing the larger Canadian Surface Combatant (CSC) ships are projected to contribute over $11.8 billion to Canada’s GDP with nearly $8.0 billion in labour income to Canadians. Between 2016 and 2025, the report forecasts employment to be boosted by an average of 9,300 jobs annually across Canada (4,200 in Nova Scotia). For governments, shipbuilding at the Halifax Shipyard is expected to deliver a total of $3.7 billion in revenue to all three levels of government between 2013 and 2025.

“The National Shipbuilding Strategy is a large-scale investment that covers infrastructure, human resources, and technology development. The economic impact of this investment is based in Nova Scotia but will also be felt across Canada as economic activity in different sectors such as manufacturing and construction will benefit other regions. The current geo-political environment adds urgency to the need for newer and modernized naval assets, and the National Shipbuilding Strategy expands Canada’s naval capabilities to patrol and protect our coastlines.” said the Conference Board’s Chief Economist, Pedro Antunes.

From 2013 to the end of 2022 over $5.2 billion was spent on the National Shipbuilding Strategy with more than 325 organizations across Canada. A further $4.3 billion in Canadian spending is projected between 2023 and the end of 2025.

Canada’s Industrial and Technological Benefits (ITB) policy ensures that 100 per cent of any major defence contract is matched in domestic business activity. If a portion of the work is not performed directly in Canada, the prime contractor and suppliers need to invest locally to compensate for the value of the work outside the country. This ensures that Canada’s defence and security spending will generate economic benefits for the country. It will also provide important investments in targeted areas such as supporting local suppliers, who are often small businesses, and expanding their opportunities to export.

The report confirms that the Halifax Shipyard’s first NSS obligation—the AOPS Definition contract—exceeded its commitment to Canada by 53 per cent, or by $247 million in additional domestic business activity.

The Halifax Shipyard must also invest a value equal to 0.5 per cent of its revenue toward the domestic marine industry in three priority areas: human resources development, technology development, and commercialization. Since 2014, the shipyard has directed $18.5 million toward the broader marine sector on projects like the creation of the “Centre for Ocean Venture and Entrepreneurship (COVE).” As the NSS continues to progress into 2024, the Halifax Shipyard will invest a total of $33.0 million into Canada’s blue economy.

“The National Shipbuilding Strategy (NSS) means Canadians are proudly rebuilding a vital national security industrial base here at home after decades of boom-and-bust cycles. The work on eight (8) Arctic and Offshore Patrol Ships (AOPS) and the upcoming fifteen (15) Canadian Surface Combatants (CSC)ships at the Halifax Shipyard are creating thousands of highly skilled shipbuilders who can now spend their entire careers building ships for Canada. These efforts are generating significant revenues for governments, economic benefits to businesses and communities, as well as research and innovation in the Blue Economy,” said Dirk Lesko, President of Irving Shipbuilding.

Read the full report: Value for Money: Economic Impact of the Halifax Shipyard Under the National Shipbuilding Strategy, 2023 - The Conference Board of Canada

The Conference Board of Canada is the country’s leading independent research organization. Our mission is to empower and inspire leaders to build a stronger future for all Canadians through our trusted research and unparalleled connections. Follow The Conference Board of Canada on Twitter @ConfBoardofCda

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