Prep work on 17 non-combat vessels for the federal government is forging ahead at Vancouver Shipyards, despite concerns raised by the auditor general in a report this week about how much funding Ottawa has set aside for the national shipbuilding program.
Brian Carter, president of Seaspan Shipyards, said Tuesday he’s not worried about red flags raised by Auditor General Michael Ferguson that the government hasn’t set aside enough money to build all the ships it has announced.
“Canada needs to recapitalize the maritime fleet. It’s long overdue,” he said.
In 2011, North Vancouver-based Seaspan won the right to negotiate $8-billion worth of contracts to build non-combat vessels, while the Irving shipyard in Halifax was chosen to build the military fleet.
Since then however, reports from both the parliamentary budget officer and the auditor general have questioned how much money has actually been earmarked for the shipbuilding program.
In the report released this week, the auditor general noted that until recently, the seven vessels that had been announced for Seaspan were only enough to sustain the local shipyard for seven years — not the three decades that has often been referred to.
That changed last month however — after the auditor general’s report was completed — when Ottawa announced it will build another 10 non-combat ships at the shipyard at an estimated price tag of $3.3 billion.
Carter said with the recent announcement, “Our estimate in really rough terms is we have about 15 years of work in front of us.” He added it’s likely more ships will be added to that list over the next decade. “We don’t need to identify them all upfront.
“The momentum behind the program and the funding that we’ve seen to date gives us very good confidence we’re going to be building ships well beyond that 15 years.”
To prepare for that, a $200-million modernization project is currently underway at the shipyard.
Carter said that project is about half finished, and is on track to be completed at the end of October 2014.
The shipyard is expected to cut steel on the first of four offshore science ships in the fall of 2014.
The biggest non-combat ships to be built are two Navy joint supply ships, which will be started in late 2016.
Both the parliamentary budget officer and the auditor general have raised questions about whether the $2.6 billion set aside by Ottawa will be enough to build the two ships.
In his report, the auditor general noted the defence department had already responded to a budget crunch by dropping the number of joint supply ships from three to two and is now planning to replace the ships with vessels that have similar capabilities as the old ships “rather than significantly improve them, as had been originally planned.”
When the larger ships are under construction, the company expects to employ about 1,000 people.
