Canada

The Canadian Press - ONLINE EDITION

Defence officials dismiss budget officer's cost warnings on navy ships

By: Murray Brewster, The Canadian Press

Posted: 03/15/2013 4:00 PM | Comments: 0 | Last Modified: 03/15/2013 5:21 PM

OTTAWA - A leaked memo shows officials at National Defence scrambled behind the scenes last month to reassure the Harper government that they knew how much it would cost to replace the navy's supply ships.

In a report released last month, parliamentary budget officer Kevin Page said not enough money had been set aside for the $2.6-billion joint support ship program.

Page suggested that it would cost more than $4.1 billion to replace the existing vessels — HMCS Protecteur and HMCS Preserver. Both ships are over 40-years-old and the stop-and-start process to acquire new ones has been going on in earnest for a decade.

To stay within the government's existing budget envelope, Page said the capabilities of the new ships would have to be scaled back even further.

But a briefing note, prepared for Defence Minister Peter MacKay and Public Works Minister Rona Ambrose on the same day as Page's report, suggests the budget officer's analysis is more theoretical than practical.

It says National Defence's numbers are further along than the budget officer's projections, which were based on a sophisticated software model in use around the world, most notably with the U.S. Government Accountability office and even the British Ministry of Defence.

The Canadian navy is using a different system with the help of outside naval contractors, and its figures rely on "actual cost estimates" for both designs that are under consideration.

Even still, they remain estimates, which have been analyzed by independent experts, said the memo written by the navy's project manager.

"Concurrently, construction estimates are being matured to conform project affordability," said the briefing. "These cost estimates are being validated through third-party expertise provided by First Marine International."

MacKay, questioned in the aftermath of the Page's report, insisted the navy will get the ships it needs.

Similarly, Ambrose underscored during question period in the House of Commons that the budget was carved in stone and that the final design would be tested for affordability.

It was Page's report that questioned National Defence's numbers on the F-35 that set off a political firestorm in the spring of 2011 and eventually led to the stealth fighter program being reviewed.

At the time, the Conservative government responded with a full frontal assault that openly questioned the budget officer's numbers and credibility.

Defence expert Dave Perry, of Carleton University and the Conference of Defence Associations, said the leak of the supply ship memo demonstrates the government is taking a softer, less inflamatory approach to his challenge over the supply ships.

"I would hope the intent is to put forward more of the basis of why the department of defence's approach is accurate, and not to discredit what is being undertaken by the PBO," he said.

"There has been major difficulties for whatever reason on the part of the government and bureaucratic side to articulate what goes behind their costing estimates. And I think, with the F-35, had all the information been put our originally at the same time and clearly communicated it would have shown that the government and the PBO really weren't that far apart in their estimates."

The question to be asked in the case of the supply ships is not whether the government will meet its budget, but what capabilities will be taken out in the affordabilty review, Perry said.

"I have confidence the joint support ship is going to be obtained within the budget of $2.6 billion, but the real issue is: What are you getting for that?" he said.

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.

* Required

In which story did you find the error? *
Please post the headline of the story or the title of the video with the error.
What was the error? *
Please post exactly what was wrong with the story.
What should we have written?
Please indicate your source for the correct information.
Who else should we interview to improve this story?
Please include any contact information you may have.
Can we contact you in the future for advice on stories about this topic?
Yes

No
First Name: *
Last Name: *
E–mail Address: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Phone: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Colour:
Are you blue? If you can see this, leave it blank and get some CSS support.
Enter the words that you see: * This is to prevent our forms from being filled out automatically.
You have failed to correctly identify the words in the box above. Please try again.

More Canada

Undock

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.