BY JOETEY ATTARIWALA
CDR is proud to announce the selection of Davie Shipbuilding as Canada’s #1 defence company for 2024. Davie’s selection is based on a number of factors including its entry in the National Shipbuilding Strategy (NSS), its historic purchase of the Helsinki Shipyard, its growing importance to Canada’s economy and defence industry, and its growing contribution to safeguarding Canada’s sovereignty in the Arctic.
Any of the above accomplishments alone would have merited praise from CDR. However, the significance of joining the NSS, purchasing a leading foreign shipbuilder, and setting the stage to begin producing advanced icebreakers in a single year warrants its designation as Canada’s #1 defence company.
This achievement is all the more remarkable when one understands Davie’s recent history. Indeed, Davie has emerged as one of the great comeback stories of recent decades. Lacking the requisite investments and upkeep under its former management, Québec City-based Davie was looked over by the Harper government in 2010 when the NSPS (later NSS) was first announced.
Yet, in 2012, the Inocea Group — a leading international marine, defence and industrial group led by James Davies and Alex Vicefi eld — identifi ed Davie for what it was: a diamond in the rough. The group purchased Davie and proceeded to invest upwards of $1.2 billion in the Lévis / Québec City region. The duo hired top talent from home and abroad, ushered in new management and operational techniques, and bolstered employee pride and a sense of belonging.
“To say we were met with skepticism by observers when we purchased Davie would be an understatement,” said James Davies, CEO of Davie Shipbuilding and co-founder of Inocea. “Many people had given up on Davie and it was constantly in the news asking for more government support. But Alex and I knew this company had enormous potential and that Québec’s naval workforce was highly trained and competent. After all, this is Canada’s highest capacity shipyard, and it is situated on the St. Lawrence, one of the world’s busiest maritime trade routes. So, we took an educated leap of faith. Twelve years later, it’s clear Davie has lived up to the potential we saw.”
CSS ASTERIX
The investments were followed in 2017 with the successful completion — on time and on budget — of CSS Asterix, the Royal Canadian Navy’s first Resolve-Class Combat Support Ship. The ship supplies Canadian naval forces at sea with ammunition, fuel, food, water, power, and spare parts and is the largest and most sustainable military vessel ever delivered by a Canadian shipyard. It has been used to support humanitarian assistance and disaster relief missions in Sudan and is just back from a deployment to the Indo-Pacific region.
The CSS Asterix remains one of Canada’s most advanced ships. A partnership with defence technology leader MARSS and Canada’s Current Scientifi c Corporation, has equipped the ship with a state-of-the-art EO/IR system integrated with the NiDAR Command and Control (C2) and the Counter Uncrewed Aerial System (CUAS).
Davie also partnered with the Canadian Coast Guard (CCG) to deliver three muchneeded interim medium icebreakers, with the delivery of the CCGS Captain Molly Kool being the first new CCG icebreaker in 25 years. All three vessels are now serving Canada with distinction, and the company has also completed numerous vessel refits for the CCG.
HALIFAX-CLASS
Another major project is life extension work on the Canadian Navy’s Halifax Class frigates, welcoming back HMCS St. John’s and HMCS Toronto in recent years for maintenance and upgrades. The former established a new standard for the industry, when it became the fi rst ship in over 20 years to have its systems reactivated at Davie, a procedure that enabled her to sail home, rather than being towed which had become the norm.
Beyond its work for the Canadian government, Davie has built a niche delivering on the requirements of commercial customers. In addition to delivering shipbuilding projects such as a highly complex subsea construction ship and North America’s fi rst dual-fuel ferries, Davie also excels in complex commercial repair work. For example, the citizens of L’Île-aux-Coudres were able to count on Davie when their 26-year-old ferry had to be dry-docked last year for emergency repairs. Davie worked round the clock to upgrade the ferry and return it to L’Île-aux-Coudres three weeks ahead of schedule.
These achievements are a testament to Davie’s resilience and ability to reinvent itself. Shipbuilding, by its very nature, is a capital and manpower-intensive industry, necessitating impressive supply chains. Success is far from being a guarantee. Yet, in the past decade, Davie showed it could consistently deliver on time and on budget.
The company’s success may lie in part in its innovative business models, which rebalance risk and achieve a more equitable distribution of rewards between shipbuilder, vessel owner and end-user. A prime example is CSS Asterix, which was privately fi nanced and owned by Davie’s sister company, Federal Fleet Services (FFS), and leased to Canada and crewed by a mix of RCN and FFS crew. Such novel approaches have infused newfound dynamism in the notoriously rigid Canadian shipbuilding industry.
NSS While Davie was mounting this impressive comeback over the past 10 years, its leaders had their eyes set on the crown jewel of government programs, the National Shipbuilding Strategy. Despite the company being unsuccessful the first time around, Davie was confident the government could not ignore Davie’s many attributes forever.
“We knew Canada needed Davie’s capacity to fulfi ll the objectives of the NSS. It had always been our long-term goal, and we were confident our teams were prepared to take on this transformational challenge,” Davies told CDR. “The National Shipbuilding Strategy isn’t just a big government program, it is a generational investment in Canada’s fleet and our country’s ability to project power, safeguard our sovereignty, and to keep our economy fl owing. We took this very seriously and we knew Davie, by far Canada’s largest shipbuilder, had unique value to contribute to this national endeavour.”
After a rigorous, multi-stage process involving many governmental reviews and approvals, the big day finally arrived on April 4, 2023, when Justin Trudeau and François Legault, respectively Prime Minister of Canada and Premier of Québec, were all smiles as they announced the historic news to hundreds of cheering Davie workers.
Accompanying them were Davies and Vicefield, who were seized by the importance of this landmark day. “I was truly humbled by the significance of that day,” said Davies. “Joining the NSS was the result of countless hours of hard work by everyone at Davie, and our colleagues and partners in governments of Canada and Quebec. We never gave up. I think back at team members that had been there even before Alex and I took over and I was so happy for them. They had always believed in Davie, and now we had finally arrived.”
“Of course, joining the NSS is just the beginning of the adventure,” Davies told CDR. “We have enormous responsibilities and expectations on behalf of Canadian citizens, and we are determined to deliver upon these with the highest quality and professionalism. But on that fi rst day, I allowed myself to celebrate and cheer along with all our people who had made this milestone a reality.”
Joining the NSS alongside Irving and Seaspan shipyards was a huge breakthrough for Davie. But the company had another card up its sleeve. It would be tasked with delivering Canada’s newest fleet of advanced Arctic-ready icebreakers — including a next generation polar icebreaker and six program icebreakers — a niche for which it is particularly well suited.
Davie has specialized in delivering Arctic ships at a time when the High North wasn’t at the top of politicians’ agendas. In the intervening period, a great power competition has re-emerged. Russia and China are collaborating to tap into the North’s huge natural resources, and to create new shipping routes, while investing billions of dollars in critical infrastructure. Canada and its NATO allies have a huge role to play to uphold shared values and defend vital interests in the Arctic, so the timing of Davie’s entry to the NSS is impeccable.
But the NSS’ impact should also be calculated beyond its importance to Canada’s security. The program represents a highly strategic investment in Canada’s industrial base and wider economy. A study published by Deloitte in 2022 estimates that Davie’s NSS commitments alone will contribute up to $11.2 billion to Canada’s GDP, with a potential of 4,700 direct and indirect jobs created in the process. This has far-reaching positive outcomes for the thousands of companies that make up Davie’s supply chain as well as the communities in which they operate. After decades of globalization and de-industrialization, there is a general acknowledgement in Ottawa that nothing can replace good, well-paying manufacturing jobs that cement the social fabric of many communities.
Davie’s pan-Canadian supplier network numbers more than 1,500 companies and has played an active role in its integration into the NSS. The supply chain understood that Davie’s inclusion as a strategic partner in the NSS would be a major lever for Québec’s marine industry, and it acted in unison through the Association of Davie Shipyard Suppliers (known by its French acronym AFCDC). Mobilizing this many actors is no small feat, and their collective success means many of them will contribute to the construction of the initial 9 ships Davie will build for Canada in Canada under the NSS.
INVESTING IN THE FUTURE
Davie is embarking on the largest expansion and enhancement phase in the company’s history, coinciding with the celebration of its 200th anniversary in 2025. Already home to half of Canada’s shipbuilding capacity, Davie will further increase its production capabilities and efficiency as the company aims to become North America’s most versatile and technologically advanced shipbuilder. To do so, it is investing $840 million with strategic support from the Government of Québec.
Moreover, Davie and its suppliers will invest more than $200 million on innovation and R&D over the next two decades through Canada’s ITB Policy. This investment will position Davie as a frontrunner in spearheading the development of cuttingedge technologies crucial for driving the green transition within shipbuilding and the broader maritime sectors. For instance, since 2022, Davie has been partnered with worldrenowned researchers at Université Laval to explore the conditions required to safely use green ammonia in a conventional diesel engine with the goal of bringing this new technology to market.
Despite being a latecomer to the NSS, Davie is quickly making up for lost ground. In March 2024, Davie announced it had been awarded its first NSS contract, the Ancillary Contract for the concept design of the Canadian Coast Guard’s Program Icebreakers.
“This is an exciting moment for us,” said Davies. “We are working towards the construction of the largest and most technologically advanced icebreakers ever produced in Canada, and we are getting ever closer to turning the vision of these icebreakers into reality. Taking on the concept design is the first step towards the construction phases and shows the company’s project is well under way.”
HELSINKI SHIPYARD
As if joining the NSS wasn’t enough, Davie surprised many observers in November 2023 by announcing its purchase of Finland’s Helsinki Shipyard. This historic transaction marks the first time a Canadian shipyard has purchased a foreign shipbuilder. It was a strategic move for Davie, Canada, Finland and the wider NATO alliance. The Helsinki Shipyard was, until recently, held by private (unsanctioned) Russian interests, an important liability in the wake of Russia’s invasion of Ukraine. Davie’s purchase, coinciding with Finland’s entry into NATO, removes the thorn of Russian ownership and frees Helsinki Shipyard to contribute to NATO’s maritime buildup.
Helsinki Shipyard isn’t just any shipyard. It’s the world’s only true expert in icebreaker design and construction. Since 1910, it has delivered 100 icebreakers and icebreaking vessels. The shipyard’s unique know-how in Arctic shipbuilding and its track record of building around 50% of the world’s icebreakers in operation today make it a prized asset.
While the Canadian and Finnish shipyards will be separate legal and operating entities, they will be led from Davie’s headquarters in Québec. The acquisition brings together two maritime powerhouses to create the world leader in icebreaker construction and Arctic-capable shipbuilding, redefining the industry’s global landscape. It also adds around 400 employees under the Davie Group umbrella, paving the way for signifi cant export opportunities throughout the Western countries.
The purchase was a great example of a major defence company partnering with a government — in this case the Government of Québec — to acquire a strategic asset. In the coming years, the Davie Group will be building the most important heavy icebreaker order book in the Western world. Leveraging Helsinki Shipyard’s strategic know-how, with two capable shipyards, the Group’s workforce and partners will strive to deliver these ships to Canada and other customers ahead of schedule and on budget. Together, Davie’s integrated operations will provide indispensable construction capabilities for western nations and allies, helping safeguard their essential interests in the Arctic.
GEOPOLITICAL TENSIONS
“The Arctic will become one of the major theatres of geopolitical competition over the next decade, and Western nations are simply not ready for this,” Alex Vicefi eld told CDR.
“In Canada, we tend to view global power competition as something that is distant from us, something we’d rather leave to the Americans, Brits or Germans. But the Arctic region makes up part of Canada, it is partly within our sovereign borders. And I can tell you our adversaries won’t be asking politely for the permission to pass through. They are already testing our resolve and militarizing the Arctic at a rapid pace. Do you know who is our closest geographical neighbour beyond the United States? It’s Russia. We tend to forget it, but by way of Alaska, our western coast is closer to Russia than to Mexico.”
“Nothing projects power in the Arctic better than a fl eet of Arctic-capable ships,” added Davies. “There aren’t many shipbuilders within the NATO alliance that can build these platforms at speed and at scale. In fact, across the Western world, the industrial capability to operate a rapid defence buildup is found lacking. To balance today’s expansionist pressures, we must create rapid growth across a range of strategic industrial capacities. In our sector, that means operating what is arguably one of the biggest global shipbuilding programs since World War II. To pull this off requires systematic nation-to-nation collaboration, public private partnerships, warp-speed procurement, and innovative financing models.”
“We must rebuild the western strategic industrial shipbuilding capacity, which after decades of globalization, few countries can really demonstrate today. But it is possible. Canada is doing its part through the NSS and Finland is an outlier which has invested to maintain its status as an elite shipbuilder. Together, we can offer our allies a unique Transatlantic shipbuilding capability.”
POLAR MAX E & G-LAAM
Part of that contribution, said Davies, could be via the company’s innovative platforms such as the Polar Max E icebreaker and the G-LAAM. The former is a next-generation icebreaker design developed with Finland’s Aker Arctic which the company says it can build in under 36 months. It is built to operate in the harshest polar conditions and can serve as a versatile platform to carry out commercial, scientifi c or military operations. Its advanced model would be the world’s most powerful conventionally powered icebreaker. As for the Canadian-designed G-LAAM (Global Logistics, Amphibious, Aviation and Medical Support Platform), it was developed to serve as a multi-purpose platform for the Canadian Forces. The ship will boast enhanced aviation capabilities for up to 5 CH-147 Chinook helicopters and Roll on Roll-off capabilities from its well dock.
With innovative designs likely to change the face of Arctic shipbuilding and an orderbook going until 2040 for its NSS commitments, Davie is sure to contribute to Canada’s security commitments. 2023 was an exceptional year for Davie, and truly marks the comeback of Canada’s most storied shipbuilder, and it is for these reasons that we assess Davie Shipbuilding as Canada’s #1 defence company for 2024.
Congratulations to the entire Davie team!
Joetey Attariwala is CDR’s Senior Staff Writer
