Canada upbeat about shipbuilding boom

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VANCOUVER, British Columbia, March 13 (UPI) -- Canadian shipyards are upbeat about a coming boom, thanks to a multibillion-dollar government investment program, but worry over foreign competition.

Canadian shipbuilders say new investment will help regeneration in a neglected industry but aren't certain how many of the contracts being handed out by Ottawa will go to foreign companies.

Of biggest concern is the prospect that Canadian companies may struggle when faced with overseas competitors for the supply of electronics and other components in both combatant and non-combatant ships.

Seaspan, an association of Canadian companies primarily involved in coastal and deep sea transportation, bunkering, ship repair and shipbuilding services in Western North America, said it isn't sure about how much of the new business will stay in Canada.

Seaspan officials said an Ottawa contract to build seven non-combat vessels will help resurrect British Columbia's shipbuilding industry, North Shore News reported.

"But they acknowledge that won't happen overnight. Some of the most valuable components going into the first ships built -- including electronics systems -- will likely be manufactured overseas," the outlet said on its website.

Seaspan brings together a range of shipbuilding-related industries, including Vancouver Drydock, Vancouver Shipyards and Victoria Shipyards.

Ottawa's national shipbuilding program requires the ships to be manufactured in Canada but industry sources said the requirement covers mostly metal works such as hull, deck and superstructure construction.

In some cases that will cover only about half the business, and in other cases even less of the business would likely stay in Canada. The rest transferred to subcontractors who would shop around and could buy from foreign suppliers.

Shipping industry executives were heartened when Lockheed Martin Canada, a major supplier of systems, software and professional services to the Canadian navy, announced it was looking to forge partnerships with Canadian companies.

The company recently met with representatives of companies seen as potential partners and suppliers on shipbuilding projects, including Canada's arctic offshore patrol ships.

Companies in New Brunswick, Nova Scotia and Newfoundland and Labrador were sought out in recent contacts, the Ottawa Citizen reported.

In 2009 Lockheed Martin opened a facility in Dartmouth, Nova Scotia, which includes a state-of-the-art naval training center.

The Canadian Association of Defense and Security Industries said it welcomes the government emphasis on ordering vessels made in Canada as part of its National Shipbuilding Procurement Strategy.

The plan aims to maximize jobs, innovation, manufacturing and economic activity within Canada from increased defense spending.

Canadian companies from across the defense and marine industrial base have many of the capabilities required to play a meaningful role to address the Canadian navy's and coast guard's operational requirements, CADSI said in a statement.