Shipbuilding plan plagued by delays, auditor general says

Federal auditor general Karen Hogan delivered a stark warning Thursday that government mismanagement is threatening to leave the navy and coast guard without the ships they need to defend Canada and protect its waterways.

The warning is in a new report that offers a scathing assessment of the state of Ottawa’s multibillion-dollar national shipbuilding strategy nearly 10 years after it was launched.

Hogan and her team found delays across the board in the construction and delivery of new ships for the Royal Canadian Navy and Canadian Coast Guard even before the COVID-19 pandemic began.

Those delays are threatening to create gaps as the navy and coast guard vessels those ships are supposed to replace are near retirement, or in some cases have already reached that stage.

Those include the navy’s three destroyers and two support ships, while the coast guard has had to do without some research vessels and icebreakers because its existing ships are docked for repairs.

Hogan’s report says the government has mitigated some of the short-term effects but Canada is already feeling the pinch as ships retire or are forced into extended maintenance.

“The delivery of many ships was significantly delayed, and further delays could result in several vessels being retired before new vessels are operational,” the report says.

“National Defence and the Canadian Coast Guard have implemented measures to maintain their operational capabilities until new ships are delivered, but interim capabilities are limited and cannot be extended indefinitely.”

The report added that it had not assessed the impact of the COVID-19 pandemic, but noted that shipyards have either closed or reduced their workforces due restrictions, which will further threaten schedules.

The auditor general’s report came one day after the parliamentary budget office estimated that building 15 new warships - just one part of the strategy - will cost $77.3 billion, about $17 billion than the government’s stated price.

Both reports are likely to raise fresh questions about the shipbuilding plan, which was launched in earnest in October 2011 when Irving Shipbuilding in Halifax and Seaspan Marine in Vancouver were selected to build dozens of navy and coast guard vessels.

The government is now working to add a third shipyard to the program, Chantier Davie in Quebec City, to build a series of icebreakers.

“The delays that we saw in this audit should really be seen as a shared responsibility,” Hogan said. “There were delays in designing and determining capabilities that were needed. Then there were delays in production.”

Procurement Minister Anita Anand defended the strategy, saying shipyards have so far delivered four ships and created thousands of jobs.

She also insisted that the government was on track after facing some early challenges that “were not yet informed by actual build experience at the shipyards, and expertise in Canada was still developing.”