New navy ships further delayed: DND report

OTTAWA — The navy’s Arctic and offshore patrol ships are going to be delayed and will face cost increases while the delivery of its new supply ships could also fall behind schedule, a new National Defence report on procurement warns.

The Department of National Defence documents, which outline the status of various equipment programs, noted that the sixth Arctic and Offshore Patrol Ship was scheduled for delivery in July 2025, an overall 16-month delay to the latest schedule. In addition, “a significant portion of contingency funds will be required,” it added.

The DND blamed COVID19, but also acknowledged that “additionally, there are other program delays and cost increases for various reasons.”

The department did not outline those reasons or specifics on the cost increases.

The Arctic and Offshore Patrol Ship (AOPS) program has over the years faced delays and spending increases. The first AOPS was to have been delivered in 2013.

But the first ship, HMCS Harry DeWolf, wasn’t delivered to Canada until July 31, 2020. The second AOPS, the future HMCS Margaret Brooke, is expected to be delivered to the navy sometime this month, DND spokesman Dan Le Bouthillier said.

In January 2015, the federal government announced it had awarded Irving Shipbuilding a $2.6-billion contract to build five ships. In 2018, that deal was expanded to add a sixth vessel.

The DND currently lists the project as costing taxpayers a little more than $4.3 billion.

The project to build two supply ships for the Royal Canadian Navy could also face more delays, according to the records. Seaspan is working on the supply ships at its Vancouver yard and various fixes are being put in place to deal with COVID-19 impacts on both production and the supplies of material, the department noted. “Notwithstanding the development of mitigation strategies, there are indications that the delivery schedule may experience delays and the project may require the use of contingency funds to offset current issues,” the DND documents added.

In addition, there will be more costs for the program to purchase new Cyclone maritime helicopters. “The project is facing financial challenges, increased procurement costs, and some financial adjustments,” the DND update warned. “The project will ask to release the remaining contingency funds and will eventually ask (for) additional funding to meet the approved scope.”

The DND did not say exactly how many more tax dollars would be needed as that is still being determined. It will be “in the millions,” Troy Crosby, DND’s assistant deputy minister in charge of procurement, said in an interview.

The money will be used for work on the helicopter’s electronic warfare equipment. “The electronic warfare suite has to go through final level of effort, and I think that will be the last element on the acquisition path we have to address,” Crosby said.

The procurement update chart doesn’t include shipbuilding projects for the Canadian Coast Guard.