Page 58: of Maritime Reporter Magazine (May 2000)

Canada

Specialties Cornerstone of Canadian Market

The past decade was a tough one for the Canadian shipbuilding market. It was a decade that produced a decline of both employment and decline of new- builds, many of which were contracted in the late 1980s still awaiting construc- tion. This unfinished business was con- centrated mostly on various military projects that had been thought out but were never actually followed through. It is estimated that by the time the 1990's came to a close that Canadian yards had experienced the worst decade since post- war times with total sales declining by about 50 percent since 1991. In addition, total employment in the industry has broken off by about 50 percent from 12,000 workers in 1990 to today's figure of 5,000.

It has been reported that these figures, while they are grim, are not a reflection of the Canadian maritime industry as a whole, but merely the shipbuilding com- munity's staggering unemployment and economic rates. Some may find that in these trying times, they are better suited for employment in a field that would deem more productive, despite the industry's relatively high wage pay out.

Customarily, shipbuilders around the world would fall back on their govern- ment and national carriers for sustain- ment, but alas, this is no longer an option. All shipbuilding countries must construct vessels for export, as well as for their own use. For instance, govern- ment policy states that government fleets must be renewed and repaired in

Canada, while this is good news for the country's shipbuilding arena in that own- ers will not call upon outside yards, the maintenance of the country's govern- ment fleets alone cannot sustain the industry.

In revitalizing this industry, Canada's strengths lie within the construction of high-value specialty vessels, such as fer- ries, ice breakers, naval craft, offshore support vessels and barges. The vessels are an intricate portion of the country's economy, as they can be marketed inter- nationally. In fact, it has been noted that

Canadian shipyards have experienced a government assisted rationalization that has lowered their capacity by 40 percent - furthering the industry as much better suited to future market prospects.

To further implore Canadian compa- nies to build their fleets and Canadian yards, other means of revenue could be dedicated to Canada's Coastal Trading

Act, which states that the owner of a ship constructed or purchased interna- tionally must pay a 25 percent tariff (except as provided under NAFTA), to have their vessel fly the Canadian flag, as well as operating in the country's domestic trade. This tariff, combined with the additional Capital Cost

Allowances shown in the Income Tax

Act and Regulations provide the only policy tools.

According to Les Holloway, executive director. Marine Workers Federation, the

Canadian maritime industry is important to the country's infrastructure and sover- eignity.

Holloway feels that more pressure needs to be placed on Canada's federal government to get the wheels spinning on an industry that is in dire need of set policies and procedures. He will, in fact be presenting his argument to a federal committee comprised of all political parties regarding a pending bill titled:

Bill C.2I3 - Calling For A National

Shipbuilding Policy. At press time, the committee was gearing up for a second reading on this bill.

Touting itself for the production of quality products, the Canadian maritime industry has strived to further its means for the past 10 years, despite a down- turn. The industry recently experienced a successful run with its patrol frigate construction program, which could most

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