Liberals pause navy’s urgent plan to acquire supply ship

The Liberal government has hit the pause button on a plan to acquire a temporary supply ship for the navy — a decision that has shocked the shipbuilding industry and prompted stiff opposition from Quebec Premier Philippe Couillard.

Defence sources told The Canadian Press that Justin Trudeau’s government is uncomfortable with the sole-source nature of the arrangement and the way the Conservatives handled the arrangement with Project Resolve, a subsidiary of Levis, Quebec-based Chantier Davie shipyard.

The company’s plan is to upgrade a civilian tanker to act as a military replenishment ship while the navy’s long-delayed joint support ships are built.

To get the deal going last spring, the Conservative government quietly made an unprecedented change to cabinet regulations governing sole-source purchases.

Documents obtained by The Canadian Press last summer revealed a line was added to contracting regulations in June. It gives the cabinet authority to award a deal to a single company if there are urgent “operational reasons” and it fulfils an interim requirement.

The letter of intent signed with Project Resolve and the planned contract were put before the federal Treasury Board, but defence sources say the plan puts the Liberals in a political jam.

For years the Liberals have demanded open competition in military procurement, but the first program they’re asked to approve is a sole-source arrangement that required a special cabinet fix.

Industry officials said the contract was expected to be worth $400 million, but defence sources insisted it could be higher.

Couillard said putting the breaks on the project is unacceptable.