Price tag for navy, coast guard patrol ships soars to $6.5 billion | 24CA News

It will price Canadian taxpayers upwards of $6.5 billion to amass six Arctic Offshore Patrol Ships for the navy and two further related vessels for the coast guard, in response to newly tabled paperwork and a press release from the federal authorities.

Public Services and Procurement Canada (PSPC) says a contract modification has been signed with Irving Shipbuilding Inc. of Halifax, N.S. that permits for a top-up to the price range for the army ships and units the contract worth for the coast guard vessels.

The price of the navy ships has now risen to $4.98 billion from an earlier projection of $4.3 billion. The contract for the coast guard vessels has been set at $1.6 billion — a rise of $100 million from the figures tabled earlier than Parliament final spring.

The news of the contract modification was launched quietly by PSPC this week in a media assertion. It got here days after the division tabled an biannual report on the progress of main initiatives with the House of Commons authorities operations and estimates committee (OGGO), which has been finding out shipbuilding packages, amongst different issues.

The report was delivered on Dec. 30, 2022, between Christmas and New Year’s — leaving MPs with completely no alternative to query federal officers in regards to the causes for the upper worth tags.

Mary Keith, vice-president of communications for J.D. Irving, instructed 24CA News in Nova Scotia that the contract for the coast guard ships is sweet news for shipbuilders as a result of they now have the inexperienced mild to start out slicing metal.

Both procurement companies and the Department of National Defence blame the will increase on the labour shortages and provide chain points introduced on by the pandemic — components that PSPC mentioned have, amongst different issues, resulted in “higher shipping costs and higher costs for spare parts.”

In a media assertion, PSPC mentioned it has undertaken a radical assessment of this system’s projected prices and has constructed a contingency fund into the planning course of to cowl “possible cost impacts due to higher than forecasted cost of materials.”

But critics say the Liberal authorities has not supplied a lot oversight of the shipbuilding program writ giant and that prices proceed to swell every year.

Ottawa pins blame on the pandemic

Early final yr, MPs heard from Simon Page, assistant deputy minister of defence and marine procurement at PSPC. Page gave them the most substantive testimony they’d heard from a authorities official in regards to the standing of this system. He blamed spiraling prices partially on the fallout from the pandemic.

“Unfortunately, just when the performance indicators were looking good, the pandemic hit and it hit hard. I’m not saying that the pandemic is responsible for all the issues, but it did not help the shipbuilding industry whatsoever,” Page instructed the federal government operations committee below opposition questioning.

“We now have to deal with the additional costs shipyards are charging and the new schedules. We are working closely with third parties to review everything and make sure that, as you said, the costs are justified.”

What the federal government hasn’t defined in nice element — and to the satisfaction of Parliamentarians — is why the coast guard variant of the arctic patrol ship, which doesn’t comprise weapons and defensive techniques, will price extra to construct than the navy ships.

Andy Smith, the deputy commissioner of the Canadian Coast Guard in command of shipbuilding, defended the associated fee distinction whereas testifying earlier than Parliament on March 25, 2022.

“Indeed, the ships may look the same, but they will be fundamentally different,” Smith mentioned, noting that whereas the coast guard vessels lack armaments, their bridge wings have been expanded.

“There are some accommodation changes. The ships may look the same, but inside they will be different.”

He mentioned the comparability between the coast guard and army ships is unfair.

“They will cost more, but in fairness, look at the price of steel in the last two years. It has skyrocketed, and for the supply chain and the long-lead items that were generated for the first six ships, a lot of the procurements were done four or five years ago,” Smith mentioned.

“So it’s not untoward to think that the costs of ships seven and eight would be higher than those for the first six.”

Critic calls out lack of transparency

Dave Perry, one of many nation’s main defence procurement consultants, mentioned he is troubled by the federal government’s lack of transparency relating to the arctic patrol ship program and the bigger, costlier and vastly extra complicated plan to interchange the nation’s frigates.

For a number of years after the present Liberal authorities was elected, he mentioned, parliamentarians had way more detailed data at their fingertips about how the packages have been unfolding and the components driving them.

“Back in 2017, and for a couple of years afterwards, there was a significant effort on the part of National Defence, following government direction, to provide a much higher level of regular repeated information that was accessible on the internet about its defence procurement projects,” mentioned Perry, vice-president of the Canadian Global Affairs Institute, an Ottawa-based think-tank that sometimes holds occasions sponsored by defence contractors.

“There was a lot of detail provided in the public version of the investment plan, about the fiscal picture, National Defence, or how they’re going to spend money. And then that all basically evaporated.”

Perry mentioned that whereas he understands the constraints that got here with the pandemic, “it makes zero sense” that it has been so laborious to get fundamental details about the shipbuilding packages from the general public service.

Three of the army variations of the arctic ships have been delivered to the navy. The different three are in numerous phases of building.

According to the Ottawa Citizen, the primary of the navy’s patrol ships — HMCS Harry DeWolfe — is out of service till April due to ongoing mechanical issues. There have additionally been considerations about some fittings and valves within the ship’s potable water system. An investigation revealed they have been manufactured from alloys that exceeded the allowable quantity of lead, the Citizen reported final yr.

Work on the coast guard variant of the Arctic ships is predicted to start this summer time, with supply anticipated round 2026.