New Navy supply ships face more delays and cost increases, federal officials confirm

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The delivery of new Canadian Navy supply ships will be delayed for two years and taxpayers will suffer additional costs, federal officials confirmed Thursday.

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The first joint supply ship won’t be delivered until 2025 and the second won’t arrive until 2027, said Simon Page, assistant deputy minister for defense and maritime procurement at Public Services and Procurement Canada.

These dates exceed the last delivery schedule for ships built by the Seaspan shipyard in Vancouver by two years.

The cost of ships will also increase, but Page said that figure is not known at this stage.

He blamed the latest delays and rising costs on the pandemic and the current challenges facing the shipyard as the Joint Supply Ship or JSS is first in class.

At one point, the first JSS was due to arrive in 2012. This has been changed several times, with the feds later hoping for a 2018 delivery and then a 2019 arrival for the first ship. The Department of National Defense later revised this delivery to 2022 or 2023.

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The cost of the project to build the new warships, initially set at $2.3 billion, has also steadily increased. In June 2018, the government acknowledged that the cost of the project had risen from $2.3 billion to $3.4 billion. Then it went to $4.1 billion.

News of the delays and cost increases comes just over a week after Defense Minister Anita Anand claimed successes in military procurement. « I know that’s a narrative that many espouse, » Anand said, referring to the widely held belief that military procurement is a waste. “I will say that our government has taken significant steps in contracting and initiating procurement.

Conservative MP Kelly McCauley pointed out that the Joint Support Ships built by Seaspan are based on an existing design already in service with the German Navy. But McCauley said National Defense and PSPC are continuing to make changes to the ship, which are increasing costs and compounding delays.

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Troy Crosby, the assistant deputy minister for procurement at National Defence, said Thursday that the design had to be updated to meet Canada’s specific needs and that the shipyard had to deal with the complex nature of the project.

Page said the decision to announce delays and cost increases for the JSS project on a Thursday before a long weekend was not an attempt to limit bad news coverage.

“Our thought was to do this before summer break,” Page said. « Coincidentally, it was the right time for us when we had completed our analysis and had the right discussions with our chains of command and with the shipyard about this information. »

But defense sources say government officials have known about the delays and rising costs for at least a month now.

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To deal with additional delays for JSS, the federal government will now negotiate an extension to its lease of the supply ship Asterix, a commercial vessel converted by Quebec shipyards Davie for military use. The Asterix has been used since 2018 to refuel and refuel ships of the Royal Canadian Navy and Allied warships.

Davie Shipyards delivered Asterix to the government on time and on budget in a deal worth $659 million. In 2018, he offered to sell a second similar vessel for $500 million, but the Liberal government rejected that deal.

The Liberal government first tried to derail Project Asterix shortly after it was elected in the fall of 2015. The move came after cabinet ministers including Scott Brison and Defense Minister Harjit Sajjan received a letter from the powerful Irving family with a complaint that an Irving proposal for a similar supply ship had not been properly considered. Irving denied any suggestion that he was involved in political interference.

Taxpayers are expected to be hit by another major cost increase associated with the government’s shipbuilding program. The Canadian Surface Combatant project, the largest single purchase in Canadian government history, has already fallen behind schedule and the cost to taxpayers has skyrocketed: from an initial $26 billion to $77 billion , according to Parliamentary Budget Officer Yves Giroux. But MPs on the House of Commons government operations committee say they expect the cost of the 15 ships to be around $100 billion.

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