National Defence grappling with new delay in $60B warship project

National Defence grappling with new delay in $60B warship project

OTTAWA — The Department of National Defence says the first of 15 new warships being built for the Royal Canadian Navy will be delivered years later than expected as officials working on the $60-billion project grapple with unexpected design and construction challenges.

The delay means Canada will need to spend more on its 12 aging Halifax-class frigates to keep them floating longer, and is sure to set off a fresh wave of debate and lobbying around what amounts to the largest military procurement in Canadian history.

Yet the Defence Department’s head of procurement insists the project remains on budget thanks to built-in contingencies, while navy commander Vice-Admiral Craig Baines expressed confidence that his force would not be unduly affected by the delay.

That is despite a recent report that outlined concerns about the advanced age of the frigates, which was making it more difficult to find spare parts and conduct other maintenance on the 1980s Halifax-class warships.

“When you put ships in saltwater over time, there’s going to be an effect,” Baines told The Canadian Press in an interview. “But right now, based on all our estimates on the conditions of the ships, we’re very comfortable that we’ll be able to transition with this plan.”

The delay is nonetheless the latest setback for the new fleet of warships, which are known in military circles as Canadian “surface combatants” and are expected to serve as the Navy’s backbone for the better part of the century.

The warship project was launched in earnest nearly a decade ago when Irving Shipbuilding in Halifax was selected in October 2011 to build the fleet, with the total cost estimated at around $26 billion and the first ship to be delivered in the mid-2020s.

That vague schedule remained largely unchanged, at least on paper, even as the estimated price tag ballooned to $60 billion and Ottawa ordered several smaller ships so Irving would have work until the surface combatants were ready for construction.

But Troy Crosby, the Defence Department’s assistant deputy minister of materiel, revealed Monday that the first ship is now scheduled for delivery in the early 2030s as officials grapple with the final design and face longer-than-expected construction times.

The new warships are based on the Type-26 frigate, which is also being built by the United Kingdom and Australia, but Canadian officials have been making numerous changes to the design to meet Canada’s unique military — and industrial — requirements.

At the same time, Crosby said the British and Australian experiences have shown that construction of the new vessels will take 7 1/2 years, rather than the original estimate of five years.

“So when we look at the overall timeline, we’re looking at slightly longer timelines,” he said. “We’re looking at the first ship being delivered to us in the early 2030s. … In this case, we’re really more specifically looking at the 2030-31 timeframe.”

The schedule slippage comes as the parliamentary budget officer is preparing to release a highly anticipated update on the estimated cost of the warship project. Defence officials have quietly expressed concern the review will show a sizeable increase.

Crosby, however, was adamant that the project remains within the $60-billion budget established by the Liberal government in 2017.

“The project had originally included a significant amount of contingency that had been put there to address these unknowns,” he said.

“That contingency is now being applied, and that’s exactly what it’s there for. So with that update done, we’re still confident at this point that it’s going to fit within the budget.”

He also said Ottawa will not pony up more money for Irving to retain its workforce as the current plan is to start cutting steel on the first new warship as scheduled in 2023-24, while work on the final design continues.

A similar approach is being taken with the Navy’s two new supply ships, which are being built in Vancouver.

Irving is currently working on a fleet of much smaller Arctic patrol ships for the navy. It originally planned to build five, before the government ordered a sixth in November 2018 to keep Irving’s workers busy until the new warships were ready for construction.

The government then committed $1.5 billion for two more Arctic patrol ships in May 2019, this time for the Canadian Coast Guard, for the same reason.

The delay does mean the navy will need to continue operating its Halifax-class frigates longer, which means investing more money into the ships and managing how and when they are used.

Defence analyst David Perry of the Canadian Global Affairs Institute expressed concern about the new delay and what it means for the frigates, some of which are dealing with corrosion and metal fatigue that could limit how long they can remain in service.

An internal Defence Department report published last year echoed some of those concerns, saying the navy’s maintenance facilities were having an increasingly tough time repairing the frigates thanks in part to a lack of spare parts and the age of the fleet.

And while Crosby said the government is working with British and Australian officials as well as industries to find ways to save time, Perry said the warship project has a long history of delays and cost overruns.

“At this point in time, this project hasn’t met a single one of its major milestones,” Perry said. “So 2030-31 is now the no-earlier-than-that-date for me.”

Ottawa has rebuffed repeated calls to scrap its plan to build the ships in Canada, which advocates say could save the country tens of billions of dollars.

This report by The Canadian Press was first published Feb. 2, 2021.

Lee Berthiaume, The Canadian Press

Warships

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Red Deer Public Schools says that in the absence of additional funds from the provincial government, there was no consideration of using alternate classroom sites in the district. (AP Photo/Gregory Bull)
Red Deer Public Schools launches online engagement process

Red Deer Public schools is seeking community input to help ensure a… Continue reading

Red Deer Rebels defenceman Mason Ward battles with a Medicine Hat Tigers’ forward during the WHL Central Division season opener. (Photo by Rob Wallator/ Red Deer Rebels)
Tigers come back to spoil Red Deer Rebels home opener

It’s been nearly 345 days since the Red Deer Rebels last played… Continue reading

Students walk into Hunting Hills High School, which is one of the Red Deer Public Schools with solar panels on its roof. (Photo by SEAN MCINTOSH/Advocate staff)
Red Deer high school was placed in lockdown following potential threat

Hunting Hills High School was placed in a lockdown Friday after Red… Continue reading

Red Deer Mayor Tara Veer says some details of the provincial government’s 2021-22 budget need to be ‘sorted out’ when it comes to the hospital expansion funding. (File photo by Advocate staff)
More detail needed regarding hospital funding, says Red Deer mayor

Red Deer Mayor Tara Veer says some information is unclear regarding the… Continue reading

Alberta Health reported two new COVID-19 deaths in Red Deer Friday. (Image courtesy CDC)
Two more deaths linked to Olymel outbreak in Red Deer

Province reported 356 additional COVID-19 cases Friday

An arrest by Red Deer RCMP is facing online scrutiny. No charges have been laid and the incident is still under investigation. (Screenshot of YouTube video)
Red Deer RCMP investigating violent arrest caught on video

Police say officer ‘acted within the scope of his duties’

Runner Melissa Bishop-Nriagu speaks to the media at the opening news conference at the Canadian Track and Field Championships Thursday, July 25, 2019 in Montreal.THE CANADIAN PRESS/Ryan Remiorz
Canadian athletes struggling to find competition as they try to qualify for Tokyo

Canadian athletes struggling to find competition as they try to qualify for Tokyo

New York Red Bulls midfielder Jared Stroud, right, vies for the ball against Toronto FC midfielder Jonathan Osorio during an MLS soccer match in Harrison, NJ., Sunday, Nov. 8, 2020. Entering his ninth season with Toronto FC, Jonathan Osorio said his off-season regimen was no different than in the past. THE CANADIAN PRESS/AP-Eduardo Munoz Alvarez
Veteran TFC midfielder Jonathan Osorio looks to take it to the next level this season

Veteran TFC midfielder Jonathan Osorio looks to take it to the next level this season

Powell, Lowry help depleted Raptors beat Rockets

Powell, Lowry help depleted Raptors beat Rockets

Edmonton Oilers goalie Mikko Koskinen (19) makes the save on Toronto Maple Leafs' Zach Hyman (11) as Tyson Barrie (22) defends during third period NHL action in Edmonton, Saturday, Jan. 30, 2021. Toronto continues to lead the North Division standings, but hard-charging Edmonton is now just four points back on the all-Canadian circuit heading into a three-game series between the teams in Alberta's capital beginning Saturday. THE CANADIAN PRESS/Jason Franson
Maple Leafs, Oilers set for key three-game series atop North Division

Maple Leafs, Oilers set for key three-game series atop North Division

Angela James stands on centre ice in front of the Toronto Maple Leafs team after being inducted into the Hockey Hall of Fame before Toronto Maple Leafs and Buffalo Sabres NHL hockey action in Toronto on Saturday November 6, 2010. THE CANADIAN PRESS/Chris Young
Hall of Famers James, Lowe, Hay named to Order of Hockey in Canada

Hall of Famers James, Lowe, Hay named to Order of Hockey in Canada

Toronto Raptors head coach Nick Nurse talks to center Aron Baynes (46) and guard Norman Powell (24) during the second half of an NBA basketball game against the Philadelphia 76ers Sunday, Feb. 21, 2021, in Tampa, Fla. THE CANADIAN PRESS/AP-Chris O'Meara
Nurse, five Raptors assistants sidelined to due COVID-19 health and safety protocols

Nurse, five Raptors assistants sidelined to due COVID-19 health and safety protocols

Team Ontario skip Rachel Homan, centre, makes a shot against Team Wild Card 1 as second Sarah Wilkes, left, and lead Joanne Courtney sweep at the Scotties Tournament of Hearts in Calgary, Alta., Friday, Feb. 26, 2021. Ontario's Rachel Homan kicked off play in the championship pool Friday with a 7-6 victory over Chelsea Carey of Team Wild Card One at the Canadian women's curling playdowns. THE CANADIAN PRESS/Jeff McIntosh
Homan and Einarson improve to 8-1 at Canadian women’s curling championship

Homan and Einarson improve to 8-1 at Canadian women’s curling championship

Prime Minister Justin Trudeau rises during question period in the House of Commons on Parliament Hill in Ottawa on Wednesday, Feb. 24, 2021. THE CANADIAN PRESS/Sean Kilpatrick
New vaccine brings optimism amid rising threat of variants, high case counts

New vaccine brings optimism amid rising threat of variants, high case counts

Most Read