By Steven Staples and Mahmud Naqi
Published in the August 2012 issue (Volume 19 Issue 7) of Esprit de Corps
From the Cyclone helicopter to the F-35 stealth fighter, defence procurement problems have been dominating the headlines. However, the federal government’s planned $35 billion National Shipbuilding Procurement Strategy is bigger than both of these combined. The program is in trouble and in urgent need of more attention.
Who is going to be watching over the program? Can we trust the Conservative government and the Department of National Defence to make sure that tax dollars are not going to be wasted? Are sailors going to get the ships required? Is Canada going to get the jobs we need out of it? The signs so far are not good.
After complaints surfaced in the media about delays, Peter MacKay held a press conference on July 9 hailing the signing of a small $9.3 million contract as a “milestone.” This contract is to study possible designs for the Arctic/Offshore Patrol Ship (A/OPS). The ship has already been delayed for three years and a single small contract is all that the government has to show after months of backroom negotiation, raising the possibility of further setbacks.
The $35 billion cost of the shipbuilding program is likely to increase. The experience of the Joint Support Ship program is relevant. When it was announced in 2006 the proposed $2.9 billion project already had a big price tag. Yet by 2008 the government was forced to admit that the true cost of the ships had been underestimated. The government had to delay the project and then reintroduce it into the shipbuilding program.
Questions remain about whether we actually need some of the ships that we plan to purchase. The Arctic/Offshore Patrol Ship is a good example. The purpose of the ship is to protect the Arctic. This seems out of step with the government’s own foreign policy statement: “Canada does not anticipate any military challenges in the Arctic.” Given the difficulty of operating in the far north, fears of terrorists and smugglers there seem more hypothetical than real.
The largest, most expensive part of the deal is the Canada Surface Combatant (CSC) program, which will replace Canada’s twelve frigates and three destroyers with fifteen new ships. This means we will be keeping the number of combat ships in our navy to roughly the same level as it was at the end of the Cold War. Why are so many ships still needed?
Like the F-35 procurement, the shipbuilding plan has all the markings of another botched program: unclear requirements, a massive budget and a single supplier – chosen without a finalized contract for even a single ship.
So why has it been such smooth sailing for the shipbuilding program? Retired senior Department of National Defence bureaucrat Alan Williams emerged as a credible, knowledgable critic of the F-35 project. Who will be the Alan Williams of the shipbuilding deal?
Political leadership is needed. Under the umbrella agreement with the shipyards the government can impose penalties if the companies fail to hold up their end of the bargain. The problem with penalties is that enforcing them depends on the will of government. Can the Conservative government be relied on to use its leverage to hold these companies to what was agreed upon?
The Conservative government has made the shipbuilding contract a key part of its legacy. Yet the government appears unprepared for the possibility of the ships turning out to be much more expensive than budgeted. Is there a plan B for the navy?
We also need to ensure that we are getting real value for our money as taxpayers. That means ships that are on budget and on time, and that provide sustainable high-quality jobs.
Canadians need the official opposition to provide leadership. The federal NDP has effectively challenged the government on the F-35, but we have not yet heard from them about the looming risks from the shipbuilding program. The NDP was initially enthusiastic about the shipbuilding deal. Was their support a strategic error? Will it prevent the NDP from playing a vital oversight role?
The shipbuilding program is heading into dangerous waters; someone needs to be watching the government to make sure that this program doesn’t become a titanic disaster.
Steven Staples is the President of the Rideau Institute. Mahmud Naqi is a Master’s Candidate at the Norman Paterson School of International Affairs, Carleton University.