Government Operations Committee on Feb. 27th, 2019

[Kelly McCauley, Conservative, Edmonton West, AB]

Is that a general direction you received?

[Bill Matthews]

There are general guidelines out there to departments about how to plan. Where it gets different is that some departments have very lumpy expenditures. They're not always evenly spread so you have to factor that in.

[Kelly McCauley, Conservative, Edmonton West, AB]

You answered my question.

Mr. Vandergrift, you haven't had a chance to speak much, so I'll go to you.

Who made the decision to change the production order at Seaspan?

[Michael Vandergrift]

That was made by the Government of Canada working with the yard to identify what would be the most efficient order in which to produce the vessels, based on the latest available information of where Seaspan is in their production.

The purpose of this really is threefold. By moving joint support ship one first, ahead of the offshore oceanographic science vessel, that allows the yard to focus, first of all, its engineering resources on one vessel at a time as opposed to designing two vessels at the same time. It allows—

[Kelly McCauley, Conservative, Edmonton West, AB]

Was just the original production order incorrect, or is this because of the delays in their ships, the welding issues that have been going on? Why? This is pretty significant—

[Michael Vandergrift]

We've all learned a lot as we've worked through this program. I think it's the learnings of the program and also assessing where the yard was at that point in time, and how it could become the most efficient build order possible. That's the conversation we set out to have with the yard.

[Kelly McCauley, Conservative, Edmonton West, AB]

The supply ship is the Berlin class, I understand. Have we signed off on a design contract for that yet?

[Michael Vandergrift]

Oh, yes.

[André Fillion]

Yes, we have. In fact, construction already started on the blocks last year.

[Kelly McCauley, Conservative, Edmonton West, AB]

I know the blocks construction started a while ago, again because of other issues, but we've actually signed off on the design contract.

[André Fillion]

Absolutely, and as Mr. Vandergrift just mentioned, the resequence will lead the shipyard in Canada to focus its attention on finishing the design work on the joint supply ships so we can start full production—

[Kelly McCauley, Conservative, Edmonton West, AB]

Are there any costs involved in this and who's going to eat those costs?

[André Fillion]

We have cost estimates for all the vessels.

One of the reasons, I think, as Mr. Vandergrift mentioned, there was logic in changing the sequence was to allow for the oceanographic science vessel...so we can mature the design to remove some of the risks. In fact, we can see a potential reduction in costs as a result of giving ourselves more time to mature that design and not try to push the team to try to finish two designs concurrently and very fast. The cost estimates are evolving, but we see mitigation on costs as we are trying to mature the design so we don't start production too prematurely.

[Bill Matthews]

Just to be blunt, Mr. Chair, the design around Berlin and JSS is more mature than the other ships. So that was the crux of the reordering.

[Michael Vandergrift]

It allows right from the early blocks into full rate production as opposed to having another construction.

[Kelly McCauley, Conservative, Edmonton West, AB]

How much was driven by the need to get the second supply ship out, or is it just happenstance?

[Bill Matthews]

There's a need for ships for both clients, Mr. Chair. It was a matter of how you get ships produced in the fastest way possible. By focusing on the JSS with the more mature design, early blocks already started, it just was a more logical flow.

[Kelly McCauley, Conservative, Edmonton West, AB]

Sure. What I'm getting at is there's an obvious need to get the second supply ship—it's already late—as soon as possible. Instead of changing the order, was any consideration given to the Obelix?

[Bill Matthews]

In terms of the costs around a second interim ship, it's better for defence to answer them, but there are costs around them.

[Kelly McCauley, Conservative, Edmonton West, AB]

Not costs, timing; the timing of the second ship out.

[Bill Matthews]

The two go together. If you're looking at trying to solve a timing problem, you have to look at costs, and the costs weren't worth the investment.

[Kelly McCauley, Conservative, Edmonton West, AB]

How is the change in order of the ships going to affect the polar icebreaker?

[Michael Vandergrift]

Mr. Chair, the timelines on that ship are under review right now. We're working with the yard on that. It's too early to give a precise time on the polar icebreaker, but we understand the need for that project to proceed.

[Kelly McCauley, Conservative, Edmonton West, AB]

I want to stick with the Diefenbaker, the polar icebreaker.

The Library of Parliament put out a report in June 2015, which said “the delivery date had been pushed back to fiscal year 2021-2022 and the cost of the project increased to $1.3 billion by 2015.” I asked them to update the report. This was after the last time we had you in committee. Their report was that no info is available and the timeline is to be decided.

I have to ask, after so many years and the cost of this ship and the importance of this ship, how is it that we're sitting where we don't even know when we're going to start and finish the ship? How is this possible?

[André Fillion]

We know the work program that Vancouver Shipyards has to deliver on, and it includes the polar icebreaker. As you may know, they are moving forward right now with two deliveries of the fisheries science vessel this year, and the third one next year. The attention now is fully on getting the JSS design completed so that full production can start next year with the oceanographic science vessel following and then JSS number two. So the work on the design—