Joint Support Ship cost up by $1.1 billion - taxpayers will now spend $3.4 billion on project

DAVID PUGLIESE, OTTAWA CITIZEN

Taxpayers will have to spend $1.1 billion extra on new navy supply ships that are going to be built starting this summer, the Liberal government now acknowledges.

Previously the cost of building the two ships at Seaspan shipyards in Vancouver, BC had been pegged at $2.3 billion.

But the government ordered a review of that cost figure and in an email to Postmedia, Procurement Minister Carla Qualtrough's office now confirms the cost for the Joint Support Ships, or JSS, is set at $3.4 billion.

Pat Finn, the head of procurement at the Department of National Defence, said the new price tag came as the government decided to do an additional analysis of the project and include other items it had not previously included.

In some cases equipment for the ship has been purchased so there are better costs available on those items, Finn said in an interview Monday. Also taken into account was new infrastructure and the delays with the program, which, in turn, drove up the price as the cost of material increased over the years.

“The build period has changed quite dramatically,” Finn acknowledged.

At one point, the first ship was supposed to arrive in 2012. That has been changed a number of times with the government later hoping for a 2018 delivery and then a 2019 arrival for the first vessel.

The Department of National Defence is now hoping for the delivery of the first ship in 2022 or 2023. Construction will begin at Seaspan this summer of some initial portions of the vessels, Finn said.

The government hopes starting construction on the supply ships in the summer will head off any potential layoffs of skilled employees at Seaspan.

Finn said of the $3.4 billion figure, the actual cost of building the two ships accounts for a little more than 60 per cent.

Finn said the new costing model for the JSS is more akin to the one used by the parliamentary budget office. That office had an even higher estimate for JSS when it concluded in 2013 that the final tally for taxpayers would be $4.13 billion.

The Joint Support Ships are critical for the navy as they provide fuel and supplies for warships at sea.

But the Royal Canadian Navy retired its last two aging supply ships years ago. One was damaged beyond repair in a fire. The other was removed from service because of excessive corrosion. The Canadian military had been relying on the Spanish and Chilean navies to provide supply vessels for short periods of time to help fuel up Canadian warships at sea.

Because of the delays in the JSS program, the previous Conservative government entered into agreement with Davie Shipyards in Quebec to lease a commercial vessel that had been converted into a refueling and supply ship.

That ship, the MV Asterix, is at the heart of federal government's case against Vice Admiral Mark Norman. Norman has been accused by the RCMP of warning Davie in the fall of 2015 that Liberal cabinet ministers wanted to derail the Asterix project.

Word of the Liberal plan leaked out to the news media and the resulting embarrassment forced the Trudeau government to back down on its plans and the conversion of Asterix proceeded.

Norman was put under investigation and Prime Minister Justin Trudeau predicted on two occasions the officer would ultimately end up in court.

In March, the RCMP charged Norman with a single count of breach of trust. A date for the trial has not yet been set.

Norman denies the charge and has said he looks forward to clearing his name.

Asterix is considered a rare achievement in Canadian military procurement in that it was delivered on time and on budget. The supply ship is now at sea with Royal Canadian Navy and is headed to a major military exercise to begin later this month.

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