In The Media

Future government on the hook for navy supply ship deal

by Murray Brewster (feat. David Perry)


CTV News
August 18, 2015

OTTAWA -- The navy's urgent need for a supply ship recently prompted the Harper government to quietly change regulations governing sole-source military purchases, but it also put a future government on the hook if an arrangement with a Quebec shipyard falls through.

The amendment was needed to kickstart negotiations with the Davie shipyard in Levis, Que., and Project Resolve, a subsidiary which plans to retrofit an existing civilian cargo vessel to replenish warships at sea.

A line was added to contracting regulations in June and gives the federal cabinet authority to award a deal to a single company if there are urgent "operational reasons" and it fulfills an interim requirement.

The amendment comes to light just weeks after Defence Minister Jason Kenney's announced the Conservatives intended to acquire an interim supply ship.

Defence analyst Dave Perry said the letter slipped mostly under the public radar because it was announced on a Saturday during the August long weekend, one day before the federal election call.

He said changing the regulation is significant and perhaps overdue because other countries have given themselves that kind of authority.

"It's nutty that they had to do this in order to justify it on a sole-source basis," he said. "The sole-sourcing of this to get it done in a expeditious manner, to me, is a common-sense move. This is a capability that's needed now."

The navy is in a bind because it has retired its supply vessels -- both of which were over 40 years old -- and its joint support ship replacement project with Vancouver's Seaspan yard isn't expected to begin delivering until 2020 at the earliest.

The letter commits the federal government to negotiate a contract that would essentially lease a single, retrofitted civilian ship to the navy for up to five years.

If a deal can't be struck, the government acknowledges it will cover legitimate costs the shipyard has sunk into preparation.

"We don't have any idea, right now, what's involved in those financial offsets," said Perry, an analyst with the Canadian Global Affairs Institute.

The cost of hiring the ship, estimated between $65 million and $75 million a year, and the cost to taxpayers if the proposal is rejected have yet to surface in the election campaign.

There is support from the Prime Minister's Office and backing from the navy, but the bureaucracy at both National Defence and Public Works worry about how the plan affects the government's politically popular national shipbuilding strategy.

"This is a capability that's needed now," said Perry, who has done extensive research on the Harper government's failed initial bid to deliver new supply ships. The first replacement was cancelled on the eve of the 2008 election because the bids were too high.

A parliamentary budget office report last year said if the government had stuck with that project, the navy would have its ships by now and they would have cost less than the $2.9 billion price tag for the rebooted support ship plan.

Defence sources with knowledge of the negotiations say the company has already lined up a ship for conversion, the 24,000-tonne, double-hulled Asterix. Part of the work is to be done at Aecon Pictou Shipyard in Nova Scotia before moving on to the modern Davie facility outside of Quebec City.


Be the first to comment

Please check your e-mail for a link to activate your account.
SUBSCRIBE TO OUR NEWSLETTERS
 
SEARCH
PODCAST

Canada's State of Trade: Getting Our Goods To Market

May 17, 2018


On today's Global Exchange Podcast, we continue our series on the state of Canadian trade in a world of growing populism and protectionism. Today's episode, recorded during our February 13th State of Trade conference in Ottawa, features Bruce Borrows, Jennifer Fox, and David Miller in conversation with the Wilson Center's Laura Dawson about getting Canadian goods to international markets.


IN THE MEDIA

Between Trump, Iran and North Korea, Canada’s G7 has a high potential for chaos

by Chris Hall (feat. James Trottier & Colin Robertson), CBC News, May 18, 2018

The struggle Trudeau could face if Kinder Morgan walks away from Trans Mountain

by Robert Tuttle & Michael Bellusci (feat. Dennis McConaghy), Bloomberg News, May 18, 2018

Canada 'a laughing stock': Experts react to Trans Mountain indemnity

by April Fong (feat. Dennis McConaghy), BNN Bloomberg, May 18, 2018

AUDIO: NAFTA update

with Danielle Smith (feat. Sarah Goldfeder), Global News Radio, May 18, 2018

VIDEO: NAFTA Deadline Day (@ 3:00)

with Don Martin (feat. John Weekes), CTV Power Play, May 17, 2018

VIDEO: Deal or no deal on NAFTA: Canada and U.S. send mixed messages

with Rosemary Barton (feat. Colin Robertson), CBC The National, May 17, 2018

Trump’s 'submission' strategy is not working so expect NAFTA talks to drag on

by Kevin Carmichael (Feat. Eric Miller), Financial Post, May 17, 2018

Backstop deal may be last hope for TransMountain pipeline, says former oil executive

by CBC News (feat. Dennis McConaghy), CBC News, May 17, 2018

Stuck with limited oil export options, Liberals may regret B.C. tanker ban

by John Ivison (feat. Dennis McConaghy), National Post, May 17, 2018

Feds OK early start to construction of navy’s new supply ships

by Lee Berthiaume (feat. Dave Perry), The Canadian Press, May 17, 2018


LATEST TWEETS

HEAD OFFICE
Canadian Global Affairs Institute
Suite 1800, 421-7th Avenue SW
Calgary, Alberta, Canada T2P 4K9

 

OTTAWA OFFICE
Canadian Global Affairs Institute
8 York Street, 2nd Floor
Ottawa, Ontario, Canada K1N 5S6

 

Phone: (613) 288-2529
Email: contact@cgai.ca
Web: cgai.ca

 

Making sense of our complex world.
Déchiffrer la complexité de notre monde.

 

© 2002-2018 Canadian Global Affairs Institute
Charitable Registration No. 87982 7913 RR0001

 


Sign in with Facebook | Sign in with Twitter | Sign in with Email