Perceived Implications of Privatization for Canadian Coast Guard Services, Principally Arctic Icebreaking

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Perceived Implications of Privatization for Canadian Coast Guard Services, Principally Arctic Icebreaking Perceived Implications Of Privatization For Canadian Coast Guard Services, Principally Arctic Icebreaking by James Parsons A thesis submitted to the University of Plymouth in partial fulfilment for the degree of DOCTOR OF PHILOSOPHY International Shipping and Logistics Group School of Management, Plymouth Business School August 2009 Abstract James Parsons Perceived Implications Of Privatization For Canadian Coast Guard Services, Principally Arctic Icebreaking Climate change, with the possibility of an ice free Arctic ocean by 2015, has generated a renewed interest in the Arctic. This interest is being driven by the possibility of easier access to the abundant supply of resources such as oil, gas, minerals, and fisheries. Interest in Arctic tourism is also growing. Retreating sea ice will provide opportunities to avail of shorter routes for maritime traffic to and from Asia, North America, and Asia via the Arctic Ocean and Northwest Passage. In addition, the rate of population growth of local inhabitants in the Canadian Arctic is the fastest in Canada and one of the fastest in the world. A growing population will increase the demand for sealift resupply to Canada's northern communities. This work presents the first attempt to examine the role of privatization of icebreaking services in light of the present and projected shortages of infrastructure to support development in the Arctic. A unique combination of multiple methods within marine transportation, comprising of Delphi, grounded theory, and quantitative survey, is applied to investigate the potential for private involvement in the delivery of icebreaking services in the Canadian Arctic. This includes a novel application of Strauss and Corbin's Grounded Theory approach to develop hypotheses and relationships grounded in expert opinion. Although the Arctic Ocean may be ice free during the summers, there is still the issue of winter freezing and the threat of lingering multi-year ice which will impede marine transportation especially during periods of darkness and fog. The research shows ill that the future growth and development of the Canadian Arctic will undoubtedly require the use of designated icebreakers and ice strengthened vessels. However, Canada's fleet of Arctic icebreakers is ageing and considered unsuitable for future demands. While Canada has earmarked CAD $750M for the construction of one new icebreaker scheduled for delivery in 2017, the research shows that Icebreakers can be built outside of Canada for considerably less money and in less time. Also, the management and operation of the Canadian Coast Guard is under considerable security by the Auditor General of Canada. The research shows that not unlike others Arctic nations, there is potential for the creation of private-public partnerships in the delivery of Canadian Coast Guard services, principally icebreaking, in the Arctic. Keywords: Northwest Passage, privatisation of ice-breaker services, Canadian Arctic, Delphi survey, grounded theory, exploratory factor analysis. IV List of Contents Chapter 1 Introduction 1 1.1 Introduction 1 1.2 Background 1 1.3 Research Aim and Objectives 5 1.4 Methodology 6 1.5 Summary 8 Chapter 2 Future Growth in Arctic Shipping 9 2.1 Introduction 9 2.2 Climate Change Influences 9 2.3 Resources and Shipping Potential 16 2.4 Current and Future Shipping Activity 19 2.5 Ice Strengthened New Builds 21 2.6 Considerations for Planning Future Activity 22 2.7 Conclusion 24 Chapter 3 Approaches to Privatization and P3s in the Marine Sector 26 3.1 Introduction 26 3.2 The History of and Responsibility for Icebreaking in Canada 27 3.3 The Public-Private Continuum 28 3.4 Current and Potential Public-Private Partnerships in Canada 33 3.5 Barriers to Entry in the Icebreaker Sector 35 3.6 Using Competition to Overcome the Barrier of Capital Cost 38 3.7 Self Sufficiency of the Private Sector in Icebreaking Capability 40 3.8 Private Involvement in the Provision of Icebreaking Services Globally 41 3.9 Canada's Dependence on Transportation 47 3.10 Government Accountability and the Administration of Transportation 49 3.11 Conclusion 58 Chapter 4 The Canadian Coast Guard and Icebreaking Operations 60 4.1 Introduction 60 4.2 Canadian Coast Guard Accountability and Responsibilities 61 4.3 Canadian Coast Guard Levels of Service (LOS) 69 4.4 Canadian Coast Guard Regions 70 4.5 The CCG Arctic Icebreaking Fleet 72 4.6 Conclusion 75 Chapter 5 The Conceptual Framework 77 5.1 Introduction 77 5.2 Foundations for the Conceptual Model 77 5.3 Models, Theories and Frameworks 81 5.4 Conclusion 87 Chapter 6 Research Methodology 89 6.1 Introduction 89 6.2 Methodological Approach 89 6.3 Research, Politics and Public Policy 92 6.4 Research Methods 99 6.5 Conclusion 107 Chapter 7 The Delphi Exercise 108 7.1 Introduction 108 7.2 Rationale for Utilizing Delphi 108 7.3 Selection of Delphi Participants and First Round of Questions 111 7.4 Delphi Responses 113 7.5 Observations of the Delphi Study 116 7.6 Delphi Themes and Consensus 117 7.7 Conclusion 124 Chapter 8 Grounded Theory Methodology 127 8.1 Introduction 127 vi 8.2 The Rationale for Choosing Grounded Theory 127 8.3 Analysis and Coding of Interviews in Light of the Conceptual Model 130 8.4 Results of Grounded Theory 133 8.5 Conclusion 158 Chapter 9 Quantitative Survey 160 9.1 Introduction 160 9.2 Sample Size, Techniques and Selection Strategy 161 9.3 Survey Rationale and Arrangement 167 9.4 Pilot Testing 168 9.5 Survey Etiquette 169 9.6 Response Bias, Non-response Bias and Non-substantive Responses 169 9.7.Validity, Reliability and the Measurement of Conceptual Variables 173 9.8 Parametric, Nonparametric. Descriptive and Inferential Statistics 174 9.9 Survey Findings 175 9.10 Measures of Frequency, Central Tendency and Correlations 185 9.11 Simplifying Complex Matrices 187 9.12 Conclusion 197 Chapter 10 Conclusion 199 10.1 Introduction 199 10.2 Research Aim, Background Summary and Specific Results 199 10.3 Research Results in General 206 10.4 Supporting Works 210 10.5 Critique of the Research 219 10.6 Recommendations for Further Research 227 Appendicies Appendix 1 Pictures of icebreakers and ice strengthened cargo vessels 231 Appendix 2 Email from Lome Singh with details of CCG Arctic icebreakers 236 Appendix 3 Pool of Delphi participants 243 VII Appendix 4 Details of Delphi results 246 Appendix 5 An example of open/axial coding concepts from interview No. 4 256 Appendix 6 Grounded theory hypotheses, themes, and relationships 257 Appendix 7 Conceptual Model at the end of grounded theory interviews 260 Appendix 8 Official response from CCG informing of non-response to survey questionnaire 261 Appendix 9 A requested list of Canadian master mariners provided by Transport Canada 262 Appendix 10 A copy of the survey questionnaire 264 Appendix 11 Graph of Hurwicz Criterion results for contracts A, B. and C 270 Appendix 12 A copy of the pre-survey contact letter 271 Appendix 13 Covering email sent with the quantitative survey 272 References 273 Information on attached papers 288 VIII List of Figures Figure 1 Map of Canada 15 Figure 2 Factors Influencing the Level and Success of Private Involvement in the CCG 24 Figure 3 Organizational Chart of Fisheries and Oceans Canada 61 Figure 4 Reporting and Accountability for FOC Fleet Management 62 Figure 5 Icebreaker Service Areas for the Canadian Arctic 69 Figure 6 Canadian Coast Guard Regions 70 Figure 7 Canadian Coast Guard Icebreaking Overview 71 Figure 8 The Relationship among Models, Theories and Frameworks 85 Figure 9 The Conceptual Framework 86 Figure 10 Research Methods and Approach 105 Figure 11 The Arena of Delphi Participants 112 Figure 12 Regional Inputs into the Arctic Programme 134 Figure 13 Scree Plot 191 IX List of Tables Table 1 2004 Canadian Flagged Arctic Vessel Traffic 16 Table 2 Definition of Privatization Activities 30 Table 3 Methods of Dismantling the Public Sector 31 Table 4 Possible Combination of the Public-Private Continuum 32 Table 5 Builders of the CCG Arctic Icebreaker Fleet 37 Table 6 Icebreaker Service Dates for the Canadian Arctic 67 Table 7 Home Regions for the CCG Arctic Icebreaker Fleet as of 2007 72 Table 8 Global Fleet of Polar and Baltic Icebreakers as of February 2006 74 Table 9 Sample Research Questions Using Smith's Taxonomy 102 Table 10 Summary of the Delphi Exercise 114 Table 11 Details of Interview Subjects 129 Table 12 Respondent Profile for the 110 Survey Participants 163 Table 13 Summary of Survey Statements Testing General Attitudes Towards the Canadian Government and Arctic Development 176 Table 14 Summary of Survey Statements Testing General Attitudes Towards Private Management and Crewing of CCG Icebreakers 179 Table 15 Summary of Survey Statements Testing General Attitudes Towards Icebreaker Design and Construction 182 Table 16 Summary of Survey Statements Testing General Attitudes Towards the Leasing and Chartering of Icebreakers 184 Table 17 Summary of Significant Values 186 Table 18 Summary of Significant Values in Speanman rho Test 188 Table 19 KMO and Bartlett's Test 190 Table 20 Variables with KMO Values <0.5 190 Table 21 Rotated Component Matrix 193 Table 22 Rotated Component Matrix with Survey Statements Included 195 Table 23 Possible Combinations of PPP for the CCG Arctic Icebreaking Fleet 226 Acknowledgements First and foremost I would like to thank Dr. John Dinwoodie and Professor Michael Roe. Thank you both for your initial willingness to take me on and for all your guidance, wisdom, support and encouragement over the past four years. My quest for knowledge and understanding of the world has continued to grow stronger under your careful and calculated supervision. I would like to thank my wife. Angela Hyde, my daughter, Grace Sybil Hyde Parsons and my son, Thomas James Nigel Parsons.
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