Ontario Shipyards partners with province and Italy's largest builder to ready bid for navy corvettes

Globe and Mail

8 hours ago

The Ontario government is boosting efforts to turn the province into an unlikely shipbuilding centre in the hope that its underutilized shipyards can land a multibillion-dollar contract for new Canadian navy corvettes.
On Monday, Premier Doug Ford and Vic Fedeli, the Minister of Economic Development, met with senior executives of Algoma Steel ASTL-T of Sault Ste. Marie., Ont., Canada's second-biggest steelmaker. 'We let them know that if they try to pivot into supplying the defence industry and other areas, we would be there to help them,' Mr. Fedeli told The Globe and Mail.
Algoma, the country's only publicly listed steel producer, could make steel plate for ships and other heavy military equipment if Ontario Shipyards of Hamilton, the largest ship repair and construction company on the Great Lakes, were to win the corvette contract.
Algoma is already listed as a potential supplier to Team Vigilance, the Canadian and international consortium assembled two years ago to bid for the next generation of Canadian naval ships, specifically corvettes. It includes Italy's Fincantieri FNCNF, the largest shipbuilder in Europe and the fourth-largest in the world.
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Corvettes are relatively small offshore patrol vessels, or OPVs, that would replace the dozen Kingston Class ships that were built for the Royal Canadian Navy in the mid-1990s and are reaching the end of their careers. The navy announced in July that it will begin to pull eight of the ships out of service in the fall.
Those ships are 55 metres long, carry a crew of about 50 and are used for coastal and fisheries patrol, training, minesweeping, search and rescue, law enforcement and drug interdiction. The new Vigilance ships, if built, would be somewhat larger, perhaps 100 metres long, to give them more range and capabilities, said Ted Kirkpatrick, Ontario Shipyards' director of business development and government relations.
The federal government has yet to issue a tender for the new corvettes – the navy is reportedly still setting the parameters of the project – and neither Mr. Fedeli nor Mr. Kirkpatrick know the timeline or the expected budget, though the contract could be worth several billion dollars. 'We feel hopeful that this project will move forward fairly quickly,' Mr. Kirkpatrick said, noting that Prime Minister Mark Carney has made rearmament an industrial priority to meet Canada's domestic defence needs and NATO commitments.
In an effort to kick-start an ambitious shipbuilding program in Ontario, which has not built a warship since the Second World War, the provincial government last month launched a financial program worth $215-million.
The amount is designed to support shipbuilding capacity under the National Shipbuilding Strategy program. Mr. Fedeli said the incentives would be composed of loans and grants and tailored to each project. 'We want Ontario to get back into the shipbuilding business,' he said.
Several other funds, including the new Ontario Together Trade Fund, could offer incentives to steel companies and other manufacturers to help them serve Canadian customers.
Mr. Kirkpatrick said Ontario Shipyards 'hopes and expects to be a large beneficiary of the incentives programs.'
Ontario Shipyards (formerly Heddle Shipyards) was founded in 1987 and has three sites – in Hamilton, Port Weller and Thunder Bay. The company has about 250 employees, and its main business today is repairing coast guard vessels, not building new ships.
The company joined Team Vigilance to launch an unsolicited proposal to build a new corvette fleet. In addition to Fincantieri, the group includes Vard, which is Fincantieri's design arm; Thales THLEF, the French defence company that specializes in electronics; and SH Defence of Denmark, a maker of modular loading systems.
Ontario Shipyards expects competition for the contract from the other industry players in Canada, primarily Irving Shipbuilding of Nova Scotia, which has a contract worth $8-billion to build the first three River-class destroyers for the navy; Davie Shipbuilding of Quebec, which is making icebreakers for the coast guard; and Seaspan Shipyards of British Columbia, which is building large non-combat ships for the navy and the coast guard.
Mr. Kirkpatrick said the three rival shipbuilders have ample work at the moment, leaving only Ontario Shipyards with enough spare capacity to take on a big, new naval contract. 'We have the largest amount of underutilized capacity in Canada,' he said. 'If there is anyone who can put a boat in the water and paint it grey, it's us.'
He said the presence of Fincantieri and subsidiary Vard are key advantages for Team Vigilance. Vard would design the vessels, and Fincantieri would handle shipyard layout, procurement and project management. Mr. Kirkpatrick said a team from Fincantieri visited Ontario Shipyards last year to assess the company's capabilities and determine what equipment and training it would need to launch a competitive bid for Canadian navy warships.
Fincantieri, based in Trieste, in Italy's northeast, is controlled by the Italian government and is listed on the Milan exchange. The company has built some of world's largest ships for Cunard, Carnival, Princess and other cruise companies. It also builds combat ships, including aircraft carriers and submarines, for the Italian, U.S. and other governments. In Wisconsin, it makes the U.S. Navy's Constellation-class frigates, which are based on the Italian Navy's multipurpose frigates, known as FREMM.