In The Media

Military officer's suspension casts clouds over federal shipbuilding effort

by Lee Berthiaume (feat. David Perry)

Yahoo! News
January 18, 2017

OTTAWA — The suspension of the military's second-highest-ranking officer has cast a pall over the federal government's multibillion-dollar plan to build new warships, which the Liberals had hoped was finally back on course after listing for years.

Government and military officials remained tight-lipped Wednesday over why Vice-Admiral Mark Norman was abruptly stripped of his responsibilities last week by his boss, Gen. Jonathan Vance, the chief of the defence staff.

Media reports say the RCMP are investigating allegations that sensitive documents dealing with the $35-billion national shipbuilding strategy were leaked.

Norman was deeply involved in the strategy during the three years he served as commander of the Royal Canadian Navy before becoming the vice chief of defence staff this past summer.

That included charting a new course for the largest part of the shipbuilding strategy, replacing the navy's destroyers and frigates, which had been buffeted with numerous delays and cost overruns.

To save time and money, Norman led an intense soul-searching exercise that saw the navy scrap plans to design new warships from scratch, and instead modify an existing foreign design to fit Canada's needs.

The government officially launched a competition to choose that foreign design in October, with the winner to be selected this coming summer and construction to begin in Halifax in the early 2020s.

But now the already cut-throat defence industry has been left gnashing its teeth as it tries to learn more about Norman's suspension, including whether any of competitors received an unfair advantage.

The wall of silence adopted by the military and government has only added to the frustration, particularly given the huge amounts of money involved in the shipbuilding plan.

"If there's a sense that something was corrupted in the process, then what are they doing to rectify it?" asked one industry representative, who spoke on condition of anonymity to protect his relationship with government.

Public Services and Procurement Canada had little to say about the ramifications for the program.

"Through the national shipbuilding strategy, we are committed to getting the women and men of the Royal Canadian Navy and the Canadian Coast Guard the equipment they need to do their jobs protecting and serving Canadians," said spokesman Nicolas Boucher.

"We are committed to open, fair and transparent procurement processes."

The government had gone to great lengths to insulate the warship project from criticism and court challenges through extensive industry consultations, the hiring on an independent fairness monitor, and limiting what companies can say in public.

The initiatives were a direct response to the growing trend in recent years of military procurement projects being subjected to legal action, independent audits and the court of public opinion.

"We still don't have any idea what the truth is (with Norman's suspension), but there's huge sensitivity around fairness, transparency and openness around big military procurement projects," said defence analyst David Perry of the Canadian Global Affairs Institute.

Industry officials say as long as the government and military remain tight-lipped about the reasons for Norman's suspension, there will be a gaping hole in the procurement system's credibility when it comes to shipbuilding.

"Military procurement is challenging enough without having something like this," said one industry source, predicting companies will try to use the incident to their advantage if they lose a shipbuilding competition.

The shipbuilding strategy, launched by the Conservatives in 2010 and originally earmarked at $35 billion, was intended to provide the navy and coast guard with new fleets while building up a sustainable shipbuilding industry on the east and west coasts.

The plan included building a heavy icebreaker, fisheries and science vessels for the Canadian Coast Guard, as well as Arctic patrol ships and resupply vessels for the navy.

But the backbone of the strategy was to build 15 warships to replace the navy's destroyers and frigates at an estimated cost of $26 billion.

Naval officials, however, pegged the cost at closer to $40 billion in 2015, before the Liberal government said it would not decide on a budget or number of ships until later.

 


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On today's Global Exchange Podcast, we touch base with CGAI's North American trade experts in light of a busy week on the NAFTA file in Washington. After months of hard-pressed negotiations, and 6 weeks of 'perpetual' discussions in Washington, the deal has reached its next turning point, with Congressional leadership signalling that they'd need a new deal by May 17th in order to have it passed before U.S. mid-term elections in the Fall. With no deal in sight, and the Congressional deadline now in the rear-view mirror, we sit down with Sarah Goldfeder, Laura Dawson, and Eric Miller to ask where we go from here.


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