April 7, 2020 | Local, Aerospace
DND denies misjudging supply ship cost even though price tag jumped to $4.1 billion
DAVID PUGLIESE, OTTAWA CITIZEN
Updated: July 2, 2020
The defence department denies it ever misjudged the cost of a project to buy new naval ships even though the price tag jumped from $2.3 billion to $4.1 billion in less than two years.
And DND admits the cost to taxpayers for the vessels could rise even more in the coming years.
The Liberal government acknowledged on June 15 that the cost of the project to buy two Joint Support Ships has increased to $4.1 billion. The vessels are needed by the Royal Canadian Navy as they would provide fuel, ammunition and other supplies to warships at sea.
But the $4.1 billion price tag is just the latest in a series of steadily increasing cost figures. In June 2018, the government acknowledged the cost of the ship project had, at that time, jumped from $2.3 billion to $3.4 billion.
But Seaspan, the Vancouver shipyard that is to build the vessels, provided a new set of numbers in October 2019 and by February 2020 government approval was received for a new budget of $4.1 billion, DND confirmed in an email to this newspaper. “As with any large-scale procurement project, all project values are best estimates that are based on the data and figures available at the time,” the email added.
There has been no misjudging of costs on the JSS project, the department noted.
In 2013, the Parliamentary Budget Officer questioned DND's JSS cost estimates and warned that the project would require $4.13 billion.
DND stated in its email to this newspaper that taxpayers can be assured they are getting value for money on JSS and that those working on the shipbuilding project in both the department and Public Services and Procurement Canada are top notch.
“The Department of National Defence and the Canadian Armed Forces, along with our counterparts at PSPC, have a first-rate cadre of experienced, professional procurement officers, subject matter experts and financial administrators who take great pride in their work and in their accomplishments,” DND said in an email. “Our team has – and will continue to – ensure that Canadians get value from their investments in the Armed Forces.”
But DND also acknowledged costs could continue to rise.
“While the total project budget includes contingency funding for these types of reasons, some events may happen unexpectedly and thus excel what the contingency funding allowed for,” the DND email noted. “As a result, it's possible that cost estimates may change for a variety of reasons that can't be controlled or predicted.”
Conservative MP Kelly McCauley said DND's claim that project costs weren't misjudged is “BS.”
“I don't even have faith in their latest cost of $4.1 billion,” added McCauley, who is behind the effort to get the Parliamentary Budget Officer to do a new report looking at JSS. “It's going to go up.”
McCauley said the JSS design is based on the Berlin-class, an existing and proven German Navy ship. But he noted that DND and PSPC keep making changes to the ship, driving up costs and adding delays.
DND noted that, “it's not uncommon for the cost estimate to change throughout the duration of a project, especially for a first-of-class ship.”
DND also pointed out the construction contract with Seaspan may be changed throughout the duration of the project but added that does not necessarily mean the project budget will increase.
The Standing Committee on Government Operations and Estimates recently passed McCauley's motion to request the Office of the Parliamentary Budget Officer undertake a costing analysis of building the JSS in Canada as well as the leasing of Asterix, a commercial ship converted into a supply vessel for the Royal Canadian Navy to use. The PBO report will be presented to the committee by Oct. 15.
The Asterix, converted by Davie shipyards in Quebec, was at the centre of the two-year legal battle Vice Adm. Mark Norman found himself in when the RCMP charged him with breach of trust. The police force alleged Norman had tipped off Davie that the Liberal government was planning to delay its Asterix deal.
The legal case against Norman collapsed in 2019, forcing the federal government to pay the naval officer an undisclosed financial settlement as well as prompting questions about whether the charge had been politically motivated.
The Asterix turned out to be a procurement success and since 2018 has been used to refuel and resupply Royal Canadian Navy and allied warships.
The Liberal government tried to derail the Asterix project shortly after being elected in the fall of 2015. The move came after cabinet ministers, including Scott Brison and defence minister Harjit Sajjan, received a letter from the Irving family with a complaint that the Irving proposal for a similar supply ship was not examined properly. Irving has denied any suggestion it was involved in political meddling.
But after receiving the letter from the Irvings, the Liberals decided to put Asterix on hold. The government, however, had to back off that plan after news of its decision leaked out to the news media. Shortly after, the RCMP began investigating Norman.
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December 20, 2019 | Local, Naval
Davie en voie de devenir un partenaire stratégique dans le cadre de la Stratégie nationale de construction navale
LÉVIS, QC, le 19 déc. 2019 /CNW Telbec/ - Le plus grand chantier naval du Canada ayant la plus grande capacité de production est fier d'entrer en partenariat avec le Gouvernement du Canada pour la construction de la nouvelle flotte de navires de grande taille dans le cadre de la Stratégie nationale de construction navale. Alex Vicefield, président du conseil d'administration de Chantier Davie Canada inc., a déclaré : « L'annonce historique d'aujourd'hui marque le début d'un programme multigénérationnel qui s'échelonnera sur les trente prochaines années et qui solidifiera la position de Chantier Davie en tant que leader mondial en matière de livraison de navires spécialisés essentiels pour les missions. » M. Vicefield a ajouté : « Alors que la région arctique prend une importance globale croissante, la création d'un centre d'excellence pour la construction de brise-glaces, qui constituent un produit hautement exportable, se traduira par des avantages économiques considérables pour le Canada au cours des années à venir. Nous remercions le premier ministre et son gouvernement d'avoir respecté leur engagement en lien avec le renouvellement de la stratégie de construction navale et d'avoir confirmé le rôle de Davie en tant que partenaire stratégique clé. » James Davies, Président et Chef de la direction de Chantier Davie a souligné : « Au cours des dix dernières années, nous avons créé un constructeur naval avant-gardiste ayant livré des navires parmi les plus complexes jamais construits en Amérique du Nord. Alors que nous entamons une nouvelle décennie en tant que partenaire dans le cadre de la Stratégie nationale de construction navale, nous b'tirons sur nos compétences et sur notre expérience et nous tirerons profit de notre capacité de production unique ainsi que de nos installations afin de renouveler la flotte fédérale de façon rentable et en respectant les délais. » M. Davies a poursuivi en disant : « Il s'agira du plus grand programme de construction navale réalisé au Québec depuis la seconde Guerre mondiale, ce qui assurera la stabilité des emplois chez Davie et qui favorisera le développement de la grappe maritime québécoise. Celle-ci sera un moteur important de l'économie de la province. Nous avons maintenant h'te de rappeler au travail le plus rapidement possible les 1 000 travailleurs qui ont été mis à pied en 2017. » NOTE AUX ÉDITEURS : À propos de Davie Davie est le plus grand constructeur naval ayant la plus grande capacité de production au Canada. Certifié ISO 9001:2015 et ISO 14001:2015, Davie met à profit ses installations de fabrication de grande capacité ainsi que ses compétences en gestion de projet et en ingénierie afin de fournir des solutions clé en main à ses clients commerciaux et gouvernementaux, et ce, en appliquant les meilleures pratiques tout au long de la vie utile des navires. SOURCE Chantier Davie Canada Inc. Renseignements: Frédérik Boisvert, Vice-président, Affaires publiques, Chantier Davie, Tel : +1-418-455-2759, frederik.boisvert@davie.ca https://www.newswire.ca/fr/news-releases/davie-en-voie-de-devenir-un-partenaire-strategique-dans-le-cadre-de-la-strategie-nationale-de-construction-navale
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April 1, 2020 | Local, Aerospace, Naval, Land, C4ISR, Security
Important notice about CANSEC 2020
Ottawa (March 31, 2020) - Christyn Cianfarani, President and CEO of the Canadian Association of Defence and Security Industries, today issued the following statement regarding CANSEC 2020. Good afternoon, It goes without saying that the COVID-19 pandemic has disrupted our businesses, communities and our families close to home and around the globe. Over the last few weeks, CADSI has been working hard to determine what this means for our community and the events we produce for you. Today, I announce that we have made the difficult decision not to host CANSEC in 2020. As a result, we are now working hard to make CANSEC 2021 – which will take place June 2 and 3 at Ottawa's EY Centre – the best CANSEC ever. CADSI staff have begun reaching out to our members, specifically exhibit managers and sponsor reps, as well as partners and suppliers to provide details on next steps. Please stay tuned to your inboxes for more information. If you do have questions, please email cansecsupport@defenceandsecurity.ca. We are all hands-on deck to manage your inquiries, but it may take us a few days to get back to you. Please continue to be patient with us and we will respond to every inquiry as soon as we can. As you can imagine, this was a difficult but necessary decision. We know how important CANSEC is to our members, to our government and military partners, and to the broader defence and security community. It's more than a trade show; it's a time for us to come together as one and strengthen the community tasked with keeping Canada and the world safe. We also understand that this decision has taken longer to make than some would have liked. Let me share why. CANSEC is a large event with many moving parts. It has a $10 million impact on the local Ottawa economy and provides significant revenue for dozens of loyal suppliers that are struggling to deal with the economic fallout of COVID-19. Many of them are small businesses that rely on CANSEC as a key source of income. We took the time necessary to explore every possible option with the City of Ottawa, our partners, contractors, and suppliers to mitigate losses to our community and secure the long-term viability of CANSEC, which needs these partners and suppliers to be successful. We also took the time to think about our membership and the struggles it will face over the coming months. CADSI's prudent plans and budgets in recent years have placed us on a solid financial foundation for the situation we find ourselves in today. For this reason — and for the good of our community, our suppliers and our members — CADSI will refund 100% of CANSEC purchases paid by members to CADSI (e.g. sponsorship, exhibits, meeting suites), while respecting timely payments to our suppliers. Irrespective of whether CADSI will incur losses and changes to our business as a result of this decision, our commitment to our members remains the same. We are doubling down as the best advocates we can be for you in these tough times. We are also working hard to make CANSEC 2021 the best CANSEC ever. Thank you to all stakeholders who came to the table in the spirit of partnership as we made this decision, and to our members for your patience and understanding in this time of uncertainty. Many of you have been busy contributing to Canada's response to COVID-19 here at home and around the world. You have made us proud, and we cannot wait to reconnect with you – in person – at CANSEC 2021. Sincerely, Christyn Cianfarani President & CEO, CADSI Posted 2020-03-31 Last Modified 2020-03-31 14:22