CANADA’S #1 DEFENCE COMPANY - Irving Shipbuilding Inc
BY JOETEY ATTARIWALA
IRVING SHIPBUILDING INC
GROWING CANADA’S INNOVATIVE SHIPBUILDING INDUSTRY
CDR is proud to announce the selection of Irving Shipbuilding Inc. (ISI) as Canada’s number one defence company for 2023. The selection of Irving is based on a number of factors, including relevance to defence programs for the Government of Canada, economic impact for the country, job creation and much more.
The #1 ranking is rooted in the fact that Irving Shipbuilding is delivering on its obligations under the National Shipbuilding Strategy (NSS), which it was awarded through a competitive process in 2011.
The NSS contract pronounced Irving Shipbuilding as the primary shipbuilder to construct a combat package that will deliver large ships for the Royal Canadian Navy and Canadian Coast Guard — namely the Arctic and Offshore Patrol Ship (AOPS) and the Canadian Surface Combatant (CSC). In addition, ISI’s NSS work also includes vessel repair, refit and maintenance projects.
The NSS has three key objectives intended to deliver capability and benefit over several decades: renewal of the federal fleet in a timely and affordable manner; creating and supporting a sustainable marine sector in Canada; and generating economic benefit for Canada.
ISI has been contributing to the objectives outlined above as it works to rebuild Canada’s shipbuilding industry by building and maintaining ships for Canada, building an experienced and knowledgeable workforce, and building a sustainable marine sector. In assessing these factors, CDR recognizes that ISI is making significant progress in all three of these key areas.
As a partner in the NSS with the federal government, Irving’s Halifax Shipyard is now at the forefront of shipbuilding in Canada. Since the contract award, Irving has invested more than $400 million to build one of North America’s most modern shipyards and provide Canada with needed shipbuilding capability, which was one of the primary goals of the Strategy. These efforts are instrumental in ensuring Canadian sovereignty and protecting Canada’s interests at home and abroad.
STRONG LEADERSHIP
Leading ISI is Dirk Lesko, who assumed the role of President of Irving Shipbuilding Inc., effective September 1st, 2022. Prior to joining ISI, Lesko was Vice President of the General Dynamics Corporation and the 15th President of Bath Iron Works, which has been building ships for 140 years and is one of the primary shipbuilders for the US Navy.
“The National Shipbuilding strategy is delivering ships, supply chain opportunities, and sustainable jobs coast-to-coast,” Lesko told CDR. “Canada’s commitment to shipbuilding and the blue economy has realized over $5.4 billion in investments by Halifax Shipyard across the country.”
“2023 marks our eighth year of ship construction for Canada’s Navy and Coast Guard, there are many milestones to celebrate and more work to be done,” said Lesko.
BUILDING SHIPS FOR CANADA 
With a more experienced and knowledgeable workforce and a growing Canadian marine sector, ISI’s ability to build new ships has improved significantly.
In 2020, ISI delivered the most modern and the largest Navy vessel built in Canada in more than 50 years. Since then, the company has delivered a total of three Arctic and Offshore Patrol Ships and has three more currently under construction.
As the progress continues on construction, the company’s first-time quality approach continues to improve year over year. In other words, ISI workers are getting better at performing a task perfectly on the first attempt. As a result, yard wide schedule and cost performance trends continue to improve, and accountability across the production line is enhanced. This enables the yard to limit unnecessary re-work during the production phase.
In 2020, ISI met the first-time quality standard approximately 80% of the time. In 2021, that number increased to 92%. This year, the company reports that figure has increased to 97%.
In addition to the first-time quality standard metric, the amount of time it takes to build the AOPS has decreased with each new ship.
“The third AOPS, the future HMCS Max Bernays, was delivered to Canada last year,” said Lesko. “This ship was delivered in 55 months, the fastest delivery yet. We are now at a point where one new ship is delivered every year.”
AOPS 4, the future HMCS William Hall, is now over 80% complete, and is currently scheduled for delivery in September. If all goes according to ISI’s plan, AOPS 4 should surpass AOPS 3’s delivery schedule by a few months.
“Our experience on AOPS has shown that once we deliver the first ship of a new class, our processes dedicated to continuous improvement can help us reduce schedule durations for following ships,” said ISI.
2023 marks the start of construction of the seventh AOPS — this will be the first of two ships for the Canadian Coast Guard, with steel cutting planned for this summer. These two ships will be delivered to the CCG in 2026 and 2027 respectively.
2023 will also see ISI continue to grow its workforce and the Canadian supply chain; and continue to work with Canada, the UK Type 26 and Australian Hunter Class teams to drive towards a finalized design for the Canadian Surface Combatant.
“Production of the first of 15 Canadian Surface Combatants will also be underway during this period,” said Lesko.
The Halifax Shipyard is also committed to the repair, maintenance, and modernization of Canada’s Halifax-class fleet of frigates. Work on HMCS Ville de Québec concludes this year, and HMCS Halifax is next up for refit.
NUTURING AN EXPERIENCED & KNOWLEDGEABLE WORKFORCE
Over the past ten years, ISI has significantly increased the number of experienced Canadian shipbuilders across all roles in their operation. The AOPS is the largest naval ship ISI, and Canada, has built in over 50 years, and it is the platform which ISI is using to build the capability of its workforce, processes and facilities as the company moves closer to construction of the Canadian Surface Combatant.
The company has recruited and trained a world class workforce here in Canada, with over 75 new Red Seals in 2022 alone. 2022 also saw over 50,000 training hours invested in skill building. In fact, since 2012, the size of the workforce at the shipyard has grown by 65% and its internal rate of promotion measured against external hires continues to increase annually, with 215 internal promotions in 2022.
Most of the managers in charge of delivering HMCS Max Bernays (AOPS ship 3) started their shipbuilding careers at the Halifax Shipyard in the trades and have worked their way up into leadership roles. This is a positive example of how the shipyard and its workforce have matured over time.
The company’s dedicated, full-time Skill Coaches are a first for Canadian shipbuilding and have resulted in increased Red Seal certifications and award winning performances by its apprentices at provincial and national competitions.
“We are proud to be the largest employer of trades apprentices in Atlantic Canada and will continue to grow this group so we can meet our future staffing requirements,” said ISI. “Our efforts to grow skills and careers for Canadians shipbuilders also extends to investments in training and education programs that directly support diversity and inclusion in the industry, ensuring that Canadian shipbuilding is as diverse as the country itself.”
One way ISI focuses on improving diversity and inclusion in the Shipbuilding industry is through its Pathways to Shipbuilding Program. To date the company has supported 5 Pathways to Shipbuilding programs, including two Women Unlimited cohorts (2017, 2019), two Indigenous Pathways cohorts (2018, 2021), and one African Nova Scotia Pathway (2020). Today, 19.5% of ISI skilled trade apprentices are female, and 34% are from under-represented groups.
“Our #1 priority is safety. We marked safety records at Marine Fabricators and Woodside Industries while maintaining a world-class Recordable Injury Rate,” said Lesko. “Our goals reflect the commonsense approach this shipyard has taken for more than 120 years: Do it Safely, Do it Right and Do it On Time. The Navy and Canada’s sailors need quality ships as soon as we can deliver them. We owe them our very best.”
BUILDING A SUSTAINABLE MARINE SECTOR
ISI has made significant progress in rebuilding a sustainable marine sector in Canada. Since 2011, work at the Halifax Shipyard has translated to over $5.4 billion in investment and spending commitments with more than 330 businesses and organizations across the country. According to the Conference Board of Canada, the work at the Halifax Shipyard has boosted annual employment across the country by an average of 8,200 jobs.
“The marine sector in Canada has matured,” according to ISI. “The way in which we engage with the broader Canadian marine sector has also matured and we are better positioned today to achieve the objectives of the CSC program than ever before.”
One of the key lessons learned from the AOPS program is that many suppliers are unfamiliar with Canada’s Industrial Technological Benefits (ITB) policy. As such, ISI mentors its subcontractors on the ITB policy and inserts the ITB policy at the outset of all discussions related to future CSC contracting. In fact, the focus of ISI’s ITB lead is to educate and support partners on how to help achieve collective obligations to increase business activity in Canada.
“One important area of improvement is how we manage our Industrial Technological Benefits obligations. We have implemented processes to better integrate our ITB obligations into our Supply Chain procurement process at an earlier stage,” said ISI. “This has improved our ability to meet our Canadian Content commitments. We are already applying this process to the CSC program. We’ve engaged more than 1,200 proponents through our portal, conducted over 500 surveys, hosted 55 interviews and had over 450 suppliers attend our CSC Industry Day. All of the Canadian Provinces and one territory have been engaged in these efforts. We are also preparing to launch an Indigenous Industry Day to promote opportunities.”
STRONG PARTNERSHIPS 
ISI has been able to build on its Value Proposition investment projects related to the broader marine sector by providing sustained investment where ocean technology and skills training can be accelerated. For example, Irving Shipbuilding is the largest private sector contributor to the Centre for Ocean Ventures and Entrepreneurship (COVE), in Nova Scotia. This organization is dedicated to helping innovators scale up their business to compete on the world stage. Irving Shipbuilding has committed more than $10 million to COVE.
No article honouring ISI would be complete without perspective from some of the partners that work with the shipbuilder as part of its NSS workshare. CDR reached out to Lockheed Martin to get their reaction on ISI’s award as the #1 defence company for 2023.
“Lockheed Martin was very pleased to learn of this well-deserved recognition for Irving Shipbuilding, rightly identifying them as a defence industry leader in Canada,” said Glenn Copeland, General Manager, Lockheed Martin Canada – Rotary and Mission Systems. “Under Irving’s leadership, we have been able to support their vision of the future of Canada’s shipbuilding industry, as they establish themselves as a global premier constructor. As ISI’s chosen Combat Systems Integrator we have been entrusted to deliver solutions that will provide the Royal Canadian Navy and the Canadian Coast Guard with the operational capability to deliver on the Government of Canada’s ambitious fleet recapitalization plans,” Copeland told CDR.
He continued, “No one should underestimate the complexity of what is being asked of ISI as they prepare delivery of the final Arctic Offshore Patrol Ships, while concurrently readying their yards and fabrication facilities to build and deliver the Canadian Surface Combatant. Years of planning and development are leading to the execution of a tremendous growth in shipbuilding capacity that will serve the Atlantic provinces well into the middle of this century and beyond.
“When you step back and look at what is being delivered, including the magnitude of the work force being established and trained within ISI and the greater supply chain, you quickly understand shipbuilding has the potential to drive an unrivalled shift in positive economic growth in the region and beyond. We, at Lockheed Martin, are proud to support ISI as they continue to make Canada’s Shipbuilding Strategy a reality.”
CDR also reached out to OSI Maritime Systems, for a West Coast perspective. “OSI Maritime Systems has been supporting the Canadian Government NSS program through ISI and LMC since 2013,” said Ken Kirkpatrick, President and CEO of OSI Maritime Systems. “Winning the AOPS program and now CSC were very important steps in our international Naval IBS expansion strategy. Since 2013 OSI has won many international competitions and has created a significant number of high value jobs in Canada. The work that ISI is doing through the NSS program to engage the Canadian marine industry has been a huge success and directly supports companies like OSI to succeed internationally and create new jobs in Canada. Being successful in our home country, provides us credibility when developing business outside of Canada.”
CANADA’S #1 DEFENCE COMPANY
CDR’s selection of Irving Shipbuilding Inc., as the number one defence company for 2023 is clearly well deserved as the company delivers on its obligations under Canada’s National Shipbuilding Strategy.
“Building quality ships for Canada is our passion — an historic mission that we do not take for granted,” said Lesko. “More than just ships, we are growing Canada’s innovative ocean frontier. Last November we were proud to see Atlantic Canada ranked among the top 10 in the global blue economy. The work of our 2,300 teammates is inspired everyday by those we serve: Canada’s sailors.”
Lesko added, “As we begin another year, we thank Canada and Canadians for the opportunity to renew our country’s fleet.”
Congratulations to Irving Shipbuilding Inc.
Joetey Attariwala is CDR’s Senior Staff Writer
