Tuesday, April 17, 2018

Clement: It's Time to Change Course on Shipbuilding

By Tony Clement, Special to Postmedia Network

Canada’s National Shipbuilding Strategy was announced with the goal of delivering vessels for the Canadian Coast Guard and the Royal Canadian Navy that were affordable, modern and effective. It was expected that the strategy would create world class, competitive yards that could produce vessels which could be exported.
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The Royal Canadian Navy's first Arctic and Offshore Patrol Ship (AOPS), the future HMCS Harry DeWolf, assembled at Irving Shipbuilding's Halifax Shipyard.
Two shipyards were selected under the plan in 2010 – Irving Shipbuilding of Halifax and Seaspan of Vancouver – and they were to be capable to start building ships immediately, and close gaps over time at “no cost to Canada” under a non-binding umbrella agreement.

Irving Shipbuilding in Nova Scotia was chosen to build the five Arctic Off-Shore Patrol Vessels (AOPS) and the future fleet of up to 15 Canadian Surface Combatants (CSC). Seaspan in Vancouver was selected to build five coast guard vessels and two Joint Support Ships (JSS) for the Navy.

Under the strategy, the two yards were guaranteed this work provided they could close their capability gaps within a specific period of time and at no cost to taxpayers. So where do we stand after almost eight years?

To date, millions in government subsidies have poured into the two selected shipyards; costs to taxpayers are‎ soaring and vessel delivery dates are pushed further back. Seven years later, not one ship has been delivered. When it comes to costs:

— The budget for the three Off-Shore Fisheries Science Vessels has grown from $244 million to $687 million.

— The Off-Shore Oceanographic Science Vessel, which is still in the design phase, has seen its budget grow from $108 million to $144 million, and speculation abounds that the budget will grow to over $275 million in the coming year.

— The two JSS originally budgeted at $2.6 billion are now expected to cost $4.13 billion according to the Parliamentary Budget Office (PBO).

Add to the list of shipbuilding woes, the John G. Diefenbaker, Canada’s planned polar class icebreaker for $1.3 billion. The vessel was designed in 2012; however it may not be contracted until 2030, meaning its design will already be obsolete before the keel is laid.

The Liberal government has no plans for the second polar class icebreaker, and no actions are being taken to build the three high endurance multi-tasked icebreakers or the five ocean patrol vessels for which funding has been allocated.

When it comes to the five AOPS, progress is being made, yet taxpayers will not know the cost of the vessels until at least six months after the first ship is delivered.

The budget for the future fleet of 15 surface combatants has grown from $26 billion to $60 billion and the procurement is in question, as many bidders have backed away from a process is that has been amended over 50 times.

Under the Liberals, the National Shipbuilding Program is failing. It is time for a course correction. Here are a few suggestions:

— All vessels under the NSS must come under a fixed-price contract.

— The government must return to selecting a proven design for the future fleet of surface combatants, rather than spending billions more and taking significant risks, and delays with an unproven ship design.

— Expand the shipbuilding strategy to add capacity and commercial pressure by including Davie Shipbuilding of Quebec in ongoing planning, including building additional coast guard vessels which are urgently needed, and for which funding was allocated years ago.

— The government should also follow up on the success of the Astérix, and accept Davie’s offer to build the second interim supply ship at $650M, (significantly cheaper than JSS) so the Navy can get on with having the capability to refuel the Atlantic and Pacific fleet simultaneously at sea.

Without some drastic changes in this program, all signs point to taxpayers getting soaked; our navy and coast guard being hobbled, and our security and sovereignty being put at risk.
— Tony Clement is a Conservative MP and Official Opposition Public Services and Procurement Critic

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