ARCHIVED - Investment Plan 2011/12 - 2015/16

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INVESTMENT DECISIONS

2.1 HOW WE WILL INVEST OUR RESOURCES: 2011/12 TO 2015/16

Our proposed investments are grouped according to the broad categories of assets in use at CCG; Fleet and Program Infrastructure. Fleet investments are further divided between regular investments and procurement of large vessels because of the magnitude of the investments required to procure new large vessels. The planned investments are summarized in the following table:

Table 6: Planned Investments, 2011/12 to 2015/16 (Thousands of Dollars)
  2011/12 2012/13 2013/14 2014/15 2015/16 TOTAL
 
Program Infrastructure
Refit - Shore Based Infrastructure 25,000.0 25,000.0 25,000.0 25,000.0 25,000.0 125,000.0
Regular Requirement 25,000.0 25,000.0 25,000.0 25,000.0 25,000.0 125,000.0
Waterway Channel Restoration 3,815.0 3,815.0 3,815.0 3,815.0 3,090.0 18,350.0
Regular Requirement 3,815.0 3,815.0 3,815.0 3,815.0 3,090.0 18,350.0
Systems and Infrastructure 32,040.2 24,818.5 22,065.5 18,967.1 15,762.0 113,653.2
New Investments 16,866.0 7,435.4 4,902.1 1,178.0 4,318.0 34,699.5
Replacements 13,274.2 13,769.5 16,349.8 17,789.1 9,679.0 70,861.6
Disposal and Other 1,900.0 1,600.0 - - 1,765.0 5,265.0
Arctic NAVAREAs Infrastructure - 2,013.6 813.6 - - 2,827.1
Total Program Infrastructure 60,855.2 53,633.5 50,880.5 47,782.1 43,852.0 257,003.2
 
Vessel Fleet
Refit - Ships 66,155.0 59,650.0 64,400.0 64,400.0 59,400.0 314,005.0
Regular Requirement 62,170.0 59,650.0 64,400.0 64,400.0 59,400.0 310,020.0
Unplanned Requirements 3,985.0 - - - - 3,985.0
Refit - Helicopters 5,600.0 5,600.0 5,600.0 5,600.0 5,600.0 28,000.0
Regular Requirement 5,600.0 5,600.0 5,600.0 5,600.0 5,600.0 28,000.0
Vessel Maintenance Management 6,500.0 6,500.0 6,500.0 6,500.0 6,500.0 32,500.0
Regular Requirement 6,500.0 6,500.0 6,500.0 6,500.0 6,500.0 32,500.0
Small Craft Replacement 5,000.0 5,000.0 5,000.0 5,000.0 5,000.0 25,000.0
Regular Requirement 5,000.0 5,000.0 5,000.0 5,000.0 5,000.0 25,000.0
Small Vessel Replacement 8,971.6 2,588.4 8,313.4 27,923.2 39,225.8 87,022.4
Scheduled Replacements 1,663.3 2,588.4 8,313.4 27,923.2 39,225.8 79,714.1
Unplanned Requirements 7,308.3 - - - - 7,308.3
Vessel Systems and Technology Upgrades 2,200.0 2,253.7 - - - 4,453.7
Replacements 2,200.0 2,253.7 - - - 4,453.7
Total Vessel Fleet 94,426.6 81,592.1 89,813.4 109,423.2 115,725.8 490,981.1
 
Procurement of Large Vessels
Vessel Procurement 106,143.2 175,858.5 218,363.1 316,409.8 250,576.4 1,067,351.0
Project Management 9,268.6 7,383.2 5,189.1 4,000.0 4,000.0 29,840.9
Executive Direction & Project Control 5,500.0 5,500.0 5,500.0 5,500.0 5,500.0 27,500.0
Total Procurement of Large Vessels 120,911.8 188,741.7 229,052.2 325,909.8 260,076.4 1,124,691.9
 
Total Planned Spending 276,193.6 323,967.3 369,746.1 483,115.1 419,654.2 1,872,676.2

STRATEGIC PROJECT - POLAR ICEBREAKER

As a strategic Government of Canada asset, this vessel is a large multi-task-able icebreaker to be used solely for sustained operations in the Canadian Arctic Archipelago and adjacent waters for 3 seasons each year. It will deliver icebreaking, safety and navigation services, and support science research, enforcement, security and sovereignty activities. It is able to operate in more difficult ice conditions than the class of heavy icebreakers they replace. Polar Icebreakers will enable operations simultaneously in both the Eastern and Western Arctic.

Implementation of the investments proposed in this Integrated Investment Plan is an important step in the ongoing effort towards addressing the condition of CCG’s asset base. The reinvestment in the Asset Base set out in this plan is expected to maintain or improve the condition of capital assets, which will have a direct impact on the quality, reliability, extent of CCG service delivery and the associated ongoing operating and maintenance costs. The Government’s investment in renewal of the Canadian Coast Guard fleet and shore-based infrastructure will ensure its continued capability to carry out its mandate of saving lives, supporting maritime security, protecting fisheries, enhancing maritime safety, facilitating marine commerce, enforcing Canadian sovereignty, supporting marine scientific research, and protecting the marine environment.

 

 

 

 

 

 

STRATEGIC PROJECT - OFFSHORE FISHERIES SCIENCE VESSELS

Vessel used to conduct fishing, acoustic surveys of fish and invertebrates, and oceanographic research. Secondary functions include capabilities consistent with the CCG Fleet Operational Readiness Program, such as Search and Rescue and Environmental Response

A detailed listing of proposed investments by category appears in Section 3 – Investment Details. Appendix E also provides more detailed descriptions for representative investments and outlines the investments being made on CCG’s behalf by the Real Property COE within DFO. While CCG provides significant strategic input into the decision-making process, the final decisions are made by Real Property and as such are included in Appendix E for information.

 

 

 

 

 

2.1.1 Optimizing our Capital Investments

Experience has consistently shown that despite best efforts, external factors often lead to project delays. Experience has also shown that due to the nature of our operations there is a relatively long lead time required in implementing capital projects. As a result of these two factors, along with the desire to minimize capital budget lapses, CCG’s Investment Management Board has decided to over-program its A-Base major capital vote.

The level of over-programming is determined by CCG’s Investment Management Board (IMB) based on a number of factors including CCG’s experience with the various types of planned projects, communication with industry, communication with Public Works and Government Services Canada (PWGSC), and internal capacity to implement the proposed investments. This approach is used to ensure that the Agency is proactive in the management of its capital budget and has priority investments ready to absorb in-year slippage that inevitably occurs on large investment projects. The level of over-programming is revisited annually in light of proposed investments so that the level of over-programming represents a balance between the risk of lapsing funds and the risk of having to delay expenditures to not exceed budget.

Table 7 compares planned expenditures to budgets in order to demonstrate an optimized level of over-programming. It is reflective of Coast Guard’s experience over previous planning cycles and the type of projects within each planning year. Over-programming is designed to ensure maximum investment benefits and results for Canadian taxpayers.

Table 7: Over-Programming in the A-Base Investment Budget, 2011/12 to 2015/16 (Thousands of Dollars)
  2011/12 2012/13 2013/14 2014/15 2015/16 TOTAL
Total Available A-Base Budget 137,934.3 123,626.7 129,530.0 129,530.0 129,530.0 650,151.0
Total Planned Spending 155,281.8 133,212.0 139,880.3 157,205.3 159,577.8 745,157.2
Total Over-Programming 17,347.5 9,585.3 10,350.3 27,675.3 30,047.8 95,006.2
Over-Programming as a % of A-Base Budget 13% 8% 8% 21% 23%  

Over the past few years, Coast Guard was able to manage its major capital budget slippage through a special Treasury Board Secretariat pilot project entitled the Non-Lapsing Appropriations for Capital Management. This project increased CCG’s flexibility to better manage its project cash profiles by allowing it to carry-forward any level of slippage from one fiscal year to the next. The pilot project came to an end in 2009/10 but was replaced by a new government-wide Capital Budget Carry Forward procedure.

The new procedure, beginning in 2010/11, allows all government departments to carry-forward up to twenty percent of their year end major capital budgets; a significant increase from the original five percent limit imposed prior to the introduction of the pilot project. The procedure will enable Coast Guard to more effectively manage its cash utilization from one year to the next while ensuring a higher return on investment. Financial risks resulting from external project delays are significantly reduced and the timing is opportune as many high dollar Coast Guard vessel procurement projects are already underway.

2.1.2 Acquired Services

Coast Guard’s Investment Planning Framework does not result solely in asset investments. As part of its planning process, CCG considers different delivery options for the delivery of its programs. In some cases, it is determined that acquired services are the best delivery alternative and provide the best value to Canadians as opposed to additional asset acquisitions.

Our planning cycle encompasses five significant examples where investments in acquired services were chosen over investments in assets:

  1. Buoy Tendering
  2. Ice Reconnaissance
  3. Helicopter Operations
  4. Channel Surveying
  5. Canadian Coast Guard Auxiliary
Buoy Tendering Contracts

Buoy tendering is a program where Coast Guard contracts with private companies to place Aids to Navigation in waterways based on our levels of service. CCG owns the aids and determines where they are to be placed. The Agency has buoy contracts in all regions in varying degrees to complement the buoy service work performed by Coast Guard’s fleet. CCG continues to assess the relative cost and effectiveness of external service providers relative to the provision of the service of its own fleet.

Ice Reconnaissance

Ice Reconnaissance is a key activity of the Icebreaking Program. Coast Guard has an Ice Information Services Partnership Agreement with Environment Canada. The Canadian Ice Services provide CCG with essential marine weather and ice information for Canadian navigable waters through the use of Transport Canada’s aircrafts which are operated and staffed by Ice Reconnaissance personnel. The information gathered under this service is combined with other CCG ice-routing information such as monitoring of ice conditions, ice jams and flooding to facilitate the informed, safe and timely movement of maritime traffic through and around ice-covered Canadian waters for the benefit of industry and communities.

Helicopter Operations

The Canadian Coast Guard owns a fleet of 23 helicopters, but the Agency contracts with Transport Canada to operate these aircraft. All activities related to the actual operation of the aircraft, with the exception of tasking, are managed by Transport Canada. This includes the provision of pilots and maintenance of aircraft.

Channel Surveying

Channel Surveying is an activity undertaken as part of the Waterways Management Services program in all regions to varying degrees. Coast Guard contracts Public Works and Government Services Canada as well as Canadian Hydrographic Services to survey the main commercial shipping channels on an annual or cyclical basis driven by historical need or events (e.g. a major storm). In addition the program provides information to mariners on available water-depth forecasts and obstructions in the channels so that they may use this information to determine the maximum safe draft for their vessel.

Canadian Coast Guard Auxiliary
  • The CCG Auxiliary consists of approximately 4,200 members.
  • They respond to approximately twenty-five percent of all maritime SAR incidents in Canada, and are credited with saving approximately 1,000 lives each year.
  • In 2009, the CCGA responded to 1,749 SAR taskings, participated in 2,224 training exercises, and volunteered over 281,000 hours.

In addition to the above acquired services, the Agency also maintains a formal contribution agreement with each of the six Canadian Coast Guard Auxiliary (CCGA) corporations for related costs. The CCGA is organized into six federally incorporated, not-for-profit volunteer organizations that parallel the five Coast Guard regions and one national corporation. The CCGA consists of both individually owned boats and community vessels. The CCGA is one of many SAR partners that support the Agency in marine search and rescue activities and prevention. It is not possible for Coast Guard to cover the entire Canadian coastline and therefore relies on the CCGA to supplement its response efforts.

Coast Guard will continue to seek out the most innovative and effective means to deliver its programs through rigorous alternative analysis as a part of the Investment Planning Framework described in Appendix C.

 

 

 

2.2 ADDRESSING RISKS RELATED TO THE INVESTMENT PLAN

2.2.1 Risks to the Successful Implementation of the IIP

Integrated risk management is being used within the Canadian Coast Guard in order to systematically manage all levels of risk that may impede the Agency from achieving its intended results. Implementation of the Risk Management Framework for the Integrated Investment Plan aims to help ensure that risks associated with the plan are well-understood and addressed in a methodical manner consistent with the approach used in addressing risk across all departmental activities. Coast Guard’s Vessel Procurement sector is currently developing a tailored risk management framework which will more closely address the peculiar needs of large vessel procurement.

In the current Risk Management Framework, each risk is rated by considering the product of the probability of a risk occurring (scored out of five) and the impact if the risk occurs (also scored out of five). In this way, the most significant risks are highlighted for management attention including ongoing monitoring of the effectiveness of mitigation strategies. The risks identified in association with the Integrated Investment Plan are:

Table 8: Integrated Investment Plan Risk Ratings by Impact and Likelihood
Risk Risk Name Impact (/5) Likelihood (/5) Total Risk Rating (/25)
A Insufficent Investment in Asset Base 4 3 12
B Changing Priorities - Programs 3 1 3
C Changing Priorities - Assets 3 5 15
D Resource Availability - Internal 4 2 8
E Resource Availability - External 4 3 12
F Over-Programming 3 2 6
G Cost Increases 3 3 9
H Procurement Delays 3 3 9

The risks involved in successfully implementing the Investment Plan have been plotted on a “Heat Map” (Chart 2) in order to visualize their level of severity:

Chart 2 - Risk Heat Map

The Risk Heat Map is fully described in Table 8. Definitions of Impact: 5 - Extreme | 4 - Very High | 3 - Medium | 2 - Low | 1 - Negligible // Definitions of Likelihood: 5 - Almost Certain | 4 - Likely | 3 - Moderate | 2 - Unlikely | 1 - Rarep

The risks associated with the Integrated Investment Plan are considered to be manageable due in large part to the mitigation measures put in place and as a result of the regular oversight by Coast Guard’s Investment Management Board. Failure to implement key mitigation measures like the updated Fleet Renewal Plan may result in significantly higher risks to the overall investment strategy.

The most significant risks pertaining to the Investment Plan are:

  • Insufficient Investment in Asset Base
  • Changing Priorities – Assets
  • Resource Availability – External

The following subsections provide more detail for each identified risks by describing their respective drivers and mitigation strategies.

2.2.1.1 Insufficient Investment in Asset Base
Risk Statement:

There is a risk that insufficient investment into the asset base will cause serious problems for CCG and DFO in meeting their objectives.

Drivers:

There is concern that Coast Guard will be unable to procure and maintain its asset base in a timely fashion in order to deliver mandated services. The Agency moderates the risk of reduced fleet reliability by managing its maintenance and refurbishment programs more aggressively and more carefully, and by making informed acquisition decisions. However, the possibility of assets unexpectedly taken out of service remains a serious risk to CCG and DFO objectives. There is concern that the current recapitalization plan will not replace assets in a timely manner and that the condition of land based assets, such as fixed aids, may even be worsening at a faster rate than fleet assets.

Impact: 4 – Very High
Likelihood: 3 – Moderate

Mitigation Strategy:

This risk is mitigated by the Agency’s long-term investment planning efforts, namely the Fleet Renewal Plan and the future Shore-based Infrastructure Renewal Plan. By articulating a concrete, long-term lifecycle management plan for all assets, Coast Guard is able to identify its funding needs (over and above the annual regular investment A-Base allocation) for Vessel Procurement projects.

To date, the combination of regular A-Base and external funding has been effective at sustaining the fleet. Although mitigated, the risk will continue to exist as more assets approach the end of their operational life.

2.2.1.2 Changing Priorities – Programs
Risk Statement:

There is a risk that priorities could change, due to a change in government policy.

Drivers:

Despite the recent global economic downturn, marine traffic is expected to increase in the medium to long term. This traffic, combined with rapid technological advancements in the marine and shipbuilding industries and the impacts of climate change (e.g. fluctuating water levels and extended shipping seasons), are expected to increase the demand for Coast Guard programs; including Icebreaking, Search and Rescue, Environmental Response, and Waterways Management. The Integrated Investment Plan was developed with the understanding that the Agency’s expectations and mandate will be relatively stable over time. If priorities change as a result of new government policies, Coast Guard may need to review the way it prioritizes its investment projects.

Impact: 3 - Medium
Likelihood: 1 – Rare

Mitigation Strategy:

This risk is mitigated primarily by completing an extensive investment planning process every fiscal year; a practice that goes above and beyond the requirements of Treasury Board Secretariat. Regular Investment Management Board meetings (see Appendix B for details on Coast Guard’s governance and organization structure) also provide a capacity to respond to program changes, as they occur, over the course of a fiscal year.

2.2.1.3 Changing Priorities - Assets
Risk Statement:

There is a risk that assets may unexpectedly be unable to support program requirements.

Drivers:

The Integrated Investment Plan was developed with the best possible understanding of its asset conditions. However, priorities could change due to program delivery or health and safety concerns. For example, an existing asset may deteriorate faster than projected and may begin to pose safety risks to workers or the public.

Impact: 3 - Medium
Likelihood: 5 – Almost Certain

Mitigation Strategy:

This risk is mitigated through careful oversight from Investment Management Board. If an asset breaks down and requires additional investments, IMB engages project managers across the country to identify projects that can be deferred to the next fiscal year and allow implementation of the emergency investment.

2.2.1.4 Resource Availability – Internal
Risk Statement:

There is a risk that the proposed investments will exceed the Agency’s capacity to implement them.

Drivers:

There is a significant amount of expertise inherent in the implementation of the investments found in the Integrated Investment Plan. For example if a large number of projects are launched in parallel and require specific subject matter experts, delays may occur due to the lack of available capacity to deliver the projects.

Impact: 4 – Very High
Likelihood: 2 – Unlikely

Mitigation Strategy:

Historically, Coast Guard’s internal capacity to deliver projects has corresponded well with the nature of projects and their need for specific implementation and management skills. The Agency’s human resource capacity was taken into account when developing the IIP’s project timelines. This risk is further mitigated by the “Practical” prioritization phase of the Investment Planning Framework; where proposed investments are reviewed by a national committee formed of members from all directorates, including those responsible for implementation, to ensure that sufficient internal and external capacity are available.

2.2.1.5 Resource Availability – External (Supply Limitations)
Risk Statement:

There is a risk that the unique nature of Coast Guard’s business and the specialized nature of its assets may lead to only a limited number of qualified suppliers able to replace or refurbish them.

Drivers:

The state of the Canadian shipbuilding industry is identified as a primary source of risk to the timely delivery of Coast Guard assets. Any delay in a contractor’s ability to execute a project will affect the sequencing of fleet renewal activities. Vessel procurement projects may not be completed as planned due to:

  • a slow and cumbersome procurement process;
  • a significant lack of marine engineering capacity in Canada in terms of skills and actual shipbuilding capacity;
  • few competitors in the industry, putting CCG in a vulnerable financial position by being a “price taker”;
  • the customized nature of the design, construction, and equipment requirements for many vessels destined for government service;
  • price volatility in material, component and construction service supply chains; and
  • the difficulty for ship builders in obtaining working capital and accessing credit.

Impact: 4 – Very High
Likelihood: 3 – Moderate

Mitigation Strategy:

Through its two Centres of Expertise, Coast Guard maintains regular contact with industrial partners and plans its investments according to available capacity. This risk is further mitigated by the “Practical” prioritization phase of the Investment Planning Framework; where proposed investments are reviewed by a national committee formed of members from all directorates, including those responsible for implementation, to ensure that sufficient internal and external capacity are available.

Coast Guard is also a participant in the National Shipbuilding Procurement Strategy initiative with the Department of National Defence, Public Works and Government Services Canada, and Industry Canada. This strategy ensures timely and cost-effective procurement of new vessels by creating a sufficient volume of known shipyard work to enable a streamlined national contracting process. This program also facilitates private investment in Canadian shipyards and provides CCG with opportunities to achieve economies of scale and reduce overall project costs.

2.2.1.6 Over-programming
Risk Statement:

There is a risk that the level of over-programming chosen for the investment period is over-valuated or under-valuated.

Drivers:

Experience has consistently shown that despite best efforts, external factors often lead to project delays. In order to minimize the lapse of investment funds, the Investment Management Board decides on an acceptable level of over-programming based on a number of factors, including the Agency’s experience in managing certain types of projects, communications with industry, communications with Public Works and Government Services Canada (as contracting authority), and internal capacity.

Impact: 3 - Medium
Likelihood: 2 – Unlikely

Mitigation Strategy:

Coast Guard’s regular project status monitoring enables the department to proactively manage projects that will not be able to spend their allocation and other projects that are in need of funding. Investment Management Board is then able to track the level of over-programming throughout any given fiscal year to ensure the Agency is in a comfortable financial position. When a risk of lapsing funds occurs, IMB may decide to activate unfunded projects. Conversely if not enough projects are slipping in order to cover the level of over-programming, project managers across the country are engaged to identify activities that can be deferred to future years. Additionally, the new Capital Budget Carry Forward procedure initiated in 2010/11 provides Coast Guard with the ability to manage slippage risks through carry-forwards.

2.2.1.7 Cost Increases
Risk Statement:

There is a risk that the cost of investments scheduled later in the planning cycle may not match forecasts causing downstream financial pressures.

Drivers:

The estimated costs of investments scheduled later in the planning cycle are forecasted to the best of the Agency’s ability, based on extensive costing models, experience and expertise. However, changing resource prices and labour markets mean that final investment costs may not always match forecasts. (Note – this does not apply to cost over-runs that occur once an investment is initiated.)

Impact: 3 - Moderate
Likelihood: 3 – Medium

Mitigation Strategy:

This risk is mitigated primarily by the fact that Coast Guard completes a full investment planning cycle each fiscal year. The value of a proposed investment will be monitored over time and any significant changes will affect the Agency’s proposed investment plan. Mitigation will be achieved largely by incorporating revised costs in the Integrated Investment Plan, by reallocating funds between projects, and by amending the Plan.

2.2.1.8 Procurement
Risk Statement:

There is a risk associated to third party services needed to deliver and implement the Integrated Investment Plan.

Drivers:

The Canadian Coast Guard relies on the assistance of third party groups to address functions critical to the delivery of its programs and services, such as corporate services, and acquisitions and procurement experts. Expediting procurement is a top priority of the federal government; therefore CCG must work closely with other government departments, including central agencies, to identify more simple and streamlined processes to acquire assets.

Impact: 3 - Moderate
Likelihood: 3 – Medium

Mitigation Strategy:

This risk is mitigated, to the greatest ability possible by performing ongoing consultation and collaboration with Public Works and Government Services Canada. Furthermore, the Agency has an extensive track record of supporting major procurement initiatives with regards to its program infrastructure.

2.2.2 Individual Project Risks

As part of the “Investment Identification and Prioritization” phase of the Integrated Investment Planning Framework (see Appendix C), each investment project is subject to a risk assessment. Each risk dimension described in this section is evaluated for investment projects proposed in the Investment Plan.

2.2.2.1 Risk to Mandate Outcomes
Risk Statement:

There is a risk that failure to move forward on the replacement of an asset will cause negative impacts on CCG’s mandates and outcomes.

Drivers:
  • The absence of an asset could prevent a program from delivering on one or more of its services.
  • Possible negative impact on a Memorandum of Understanding or obligations under Coast Guard’s legislative authority.
2.2.2.2 Reputation/Image Risk
Risk Statement:

There is a risk that failure to move forward on the replacement of an asset will cause negative impacts on CCG’s reputation and image.

Drivers:
  • Negative media attention or public criticism.
  • Loss of client trust.
  • A major crisis in a client community that was directly caused by the department’s action or inaction.
2.2.2.3 Environmental Risk
Risk Statement:

There is a risk that failure to move forward on the replacement of an asset will cause damage to the environment.

Drivers:
  • Environmental issues resulting in major long-term detrimental effects on ability to achieve objectives.
  • Environmental issues contained with outside assistance with some short term effects.
  • Environmental issues in the program area that are contained within one to two days.
2.2.2.4 Risk to Asset Integrity
Risk Statement:

There is a risk that failure to move forward on the replacement of an asset will cause negative impacts on both its own asset class as well as other assets that depend on its availability.

Drivers:
  • A system may be integral to another, for example the Digital Global Positioning System is integral to the implementation of the Automatic Identification System and the Long Range Identification and Tracking system.
2.2.2.5 Financial Risk
Risk Statement:

There is a risk that failure to move forward on the replacement of an asset will cause increasing demands for financial support.

Drivers:
  • Costs to maintain the asset are increasing.
  • The availability of parts is becoming scarce or expensive.
2.2.2.6 Health and Safety Risk
Risk Statement:

There is a risk that failure to move forward on the replacement of an asset will cause potential dangers for either our employees or members of the public.

Drivers:
  • Asset is causing unsafe work conditions.
  • Asset is presenting potential dangers to the public.
  • Death, or permanent disability or illness.
  • Serious disability or long-term illness.
  • Minor health and safety issues for employees or members of the public.
2.2.2.7 Regulatory Risk
Risk Statement:

There is a risk that failure to move forward on the replacement of an asset will cause Coast Guard to become non-compliant with current regulations.

Drivers:
  • New regulations or changes to existing regulations may make CCG non-compliant which could, in some cases, result in penalties such as fines.
  • Some operations could be suspended until remedial actions have occurred.

Risk assessments and mitigation measures are completed for each and every Coast Guard investment project identified in the Integrated Investment Plan, as part of an Investment Summary Note. Investment Summary Notes are created by the Centres of Expertise for projects seeking their first level of approval. Similar to the overarching risks of the IIP, these risks are monitored on an ongoing basis by project managers who then report to Coast Guard’s Investment Management Board.

2.3 MEASURING OUR PERFORMANCE RELATIVE TO THE INVESTMENT PLAN

Performance management will form a key element of the approach to help ensure that the investment plan achieves its intended results. IIP performance management is conducted under the direction of Coast Guard’s Investment Management Board. Investment planning performance will be managed on two levels:

  • Project Management Effectiveness
  • Investment Planning Results

2.3.1 Project Management Effectiveness

Coast Guard has a strong track record of rigorous monthly project progress reporting. On a monthly basis, IMB reviews the budget, scope, timeline and risks associated with every planned and ongoing investment within the Agency. Projects showing issues on any of these dimensions are required to report to IMB regarding the causes, mitigations and proposed solutions on a project-by-project basis. As such, project issues are identified as early as possible and highlighted to Senior Management for attention, decision and remedial action.

2.3.2 Investment Planning Process Results

On an annual basis, Coast Guard’s Integrated Business Management Services branch (IBMS), is responsible for the preparation of the Integrated Investment Plan. The group conducts debriefing sessions with investment planning participants and stakeholders to revise the process as necessary and ensures that it is meeting the Agency’s needs.

Process effectiveness is also assessed through targeted performance indicators that are reported to IMB. The measures are designed to inform senior management as to whether the Investment Plan is achieving its intended effects by demonstrating good governance, stewardship, accountability, sound decision-making, and effectiveness of planning activities.

The following table contains a list of performance measures used to assess the investment plan’s effectiveness and efficiency:

Table 9: Investment Planning Performance Measures
Dimensions Measures Sources
People
  • Are the right stakeholders involved?
  • Is there a clear governance structure?
  • Is the governance structure transparent and accountable?
  • Are the necessary resources in place for IIP Management?
  • IMB
  • Centres of Expertise
  • IBMS
  • DFO Finance
Process
  • Is the planning process straightforward and well understood investment planning participants and stakeholders?
  • Is there a mechanism in place to identify inefficiencies and promote lessons learned?
  • IMB
  • Centres of Expertise
  • IBMS
Data/Tools/ Systems
  • Is the data useful for decision-making (accurate, reliable, relevant, and timely)?
  • Does CCG have the necessary tools to support the IP process?
  • IMB
  • Centres of Expertise
  • IBMS
Investment Planning Effectiveness
  • What percentage of investments were made according to plan?
  • IMB
  • Centres of Expertise
  • IBMS

This two-tier Performance Management Framework is expected to be a significant contributor to the Agency’s ongoing successful track record for project delivery and planning. By using this approach, CCG ensures rigorous oversight of the Agency’s continued performance and effectiveness in Investment Planning and investment decisions.

2.4 HOW WE WILL INVEST OUR RESOURCES: LOOKING BEYOND 2015/16

The Canadian Coast Guard must ensure that it is in a position to provide mandated services to Canadians now and in the future. Operating in an ever-changing environment, Coast Guard must adopt a forward looking approach to the way it plans to provide its services over the next twenty to thirty years.

2.4.1 Program Infrastructure Assets

While keeping up with the continuous advancements in technology and the needs of its user groups and stakeholders, Coast Guard has demonstrated its ability to implement technically advanced systems over the past ten to fifteen years. However, even as new technologies are introduced, older traditional technologies are sometimes kept in service for a variety of reasons, resulting in some degree of duplication for a very limited number of assets. While Coast Guard is dealing with a limited capital funding envelope, it needs to consider both the need to refurbish and replace its program assets, as well as the need to invest in new emerging technologies.

On one end of the spectrum, some of the more recently acquired assets may only require refurbishment or to be equipped with newer equipment in order allow Coast Guard to continue offering the similar levels of service over time. This would be the case for Communication Control System replacements at Marine Communications and Traffic Services centres across the country for example. On the other hand, many assets will need to be completely replaced in order to respond to emerging services required by stakeholders. Navigational tools for the Automatic Identification System (AIS) are an example of such new assets.

As certain services evolve and even possibly change the way Coast Guard offers its services, some assets will need to be entirely taken out of service since they will no longer respond to the requirements of its users and stakeholders. For example, pursuant to a decision taken by the United States, the Long Range Navigation service (LORAN-C) will no longer be provided in Canada and its infrastructure will be removed.

The Agency will develop a long-term plan for shore-based infrastructure, similar to its Fleet Renewal Plan. This Plan will bring a level of rigour to planning for shore-based infrastructure over a twenty to thirty year planning horizon. This plan is intended to assist the Coast Guard in prioritizing future investment to ensure the reliability and availability of Coast Guard’s shore-based assets; including those required in the Arctic. Furthermore, it will address concerns regarding the Agency’s ability to provide condition surveys for all its shore-based assets including aids to navigation and marine communications and traffic services assets. As a result, the capacity to plan and prioritize maintenance, replacement and divestiture activities identified in the department’s corporate risk profiles will improve greatly. Another main objective of the Plan will be to establish proper lifecycle management practices to shore-based assets bringing them back to baseline condition over time.

To ensure it is properly prepared for the future, Coast Guard will need to develop and implement the Shore-based Infrastructure Plan by focusing on three important areas:

  1. Electronic Navigation (e-navigation)
  2. Arctic Navigation
  3. Environmental Response

The plan will also need to consider various Shore-based Infrastructure asset categories, including:

  • Aids to Navigation
  • Operational Navigation Systems
  • Marine Telecommunication Systems
  • Environmental Response Capacity
  • Restoration of the Great Lakes Connecting Channels
  • Heavy Equipment at CCG Bases
  • National CCG Operational Information Systems

Some progress has already been made through the adoption of the Fixed Aids Management Framework. The aim of the framework is to gradually reduce the number of Complex Aids to Navigation that use old technology and to increase the number of more technologically advanced Simple Aids to Navigation. Coast Guard currently maintains approximately five hundred Complex Aids to Navigation. These aids are more costly to build and to maintain without adding any true benefit with regards to service delivery. By reducing the number of complex assets, the Agency will be able to realize some service delivery efficiencies and will lead to added benefits for Canadians.

2.4.2 Fleet Assets

Long-term planning for CCG’s vessel and helicopter fleet is accomplished though the Fleet Renewal Plan (FRP). The FRP is based on seven key principles:

  • Canadian Coast Guard vessels and helicopters are Government of Canada assets and comprise the Government of Canada’s only national civilian fleet.
  • The size and mix of the fleet is determined by program requirements and Government of Canada decisions and priorities.
  • The fleet will be multi-tasking to the greatest extent possible.
  • The fleet will be built in classes and will comprise the smallest number of classes possible.
  • The Plan is based on appropriate life-cycle management to obtain the full expected operational life of the vessels and to improve life-cycle cost.
  • Cost estimates for vessels are based on a robust and indicative cost estimating methodology that will have independent validation.
  • Implementation of the plan has to be sustainable, affordable and provide value for money.

The FRP addresses the long term fleet requirements, the vessel capabilities and the fleet mix. In developing and updating the plan, Canadian Coast Guard assessed the likely factors that would impact on the type of vessels and helicopters required to deliver programs in the future. Results generated by Coast Guard’s annual capability gap analysis also allow the Agency to better understand the long term requirements of its fleet. This is of critical importance because the new large vessels will be in service for up to forty-five years and there is little doubt that over that timeframe, there will be changes to program priorities and requirements. The aim of the Fleet Renewal Plan is not to replace vessels one-for-one, but to replace vessel capacities in a logical and sensible way that takes into consideration a wide range of factors.

The 2010 FRP is also built around the premise that vessels will be multi-tasking rather than single-purpose. This means that future vessels will be designed and equipped to adapt to more than one function over their operational life in order to maximize their use. It will also make it easier to re-assign the vessels geographically if needed.

Currently, Canadian Coast Guard operates and maintains over thirty configurations of vessels and four types of helicopters. Through the FRP, Canadian Coast Guard will continue to reduce the number of vessel classes and helicopter configurations. Ultimately, this will be more cost effective for crew training and maintenance and will consequently increase efficiency by making it easier to reassign vessels and redeploy crews.

The overall objective of the 2010 FRP is to have more capable, multi-tasking vessels built in a standard class structure, for more efficient management, operation and maintenance, with the ability to adapt to changing requirements over the long operational life of the vessels. The Fleet Renewal Plan provides a solid foundation for building the Government of Canada’s national civilian fleet for the future. The investments selected in this year’s Integrated Investment Plan are aligned with the long-term vision for the Fleet in the Fleet Renewal Plan.

In order to achieve the objectives of the Fleet Renewal Plan, the Canadian Coast Guard will require new, long-term and sustained capital funding, both to extend the life of certain vessels until new ones are delivered, and to purchase new vessels and helicopters. Without such new funding, the Fleet Renewal Plan is unachievable.