Government Operations Committee on June 12th, 2019

[Kelly McCauley, Conservative, Edmonton West, AB]

But we had discussions with other.... I recognize that all that information is obviously desperately needed, especially considering what the Chinese and the Russians are doing up north. Are we in talks with any other shipbuilders in Canada or outside of Canada right now for a polar icebreaker?

[Bill Matthews]

We are not in active discussion to my knowledge—again, André, chime in—but....

[Kelly McCauley, Conservative, Edmonton West, AB]

In active discussion?

[André Fillion]

First of all, I would like to say....

[Kelly McCauley, Conservative, Edmonton West, AB]

It's a serious question. Originally, it was supposed to be, I think, 2019 and then it got put back to 2023. We're probably looking, to be honest, at 2030 if it was left with Seaspan. We have to act so....

[André Fillion]

To answer your first question, I would have to say that we're constantly in conversation with our allies who are in shipbuilding. We are aware of what our allies are doing with the construction of large icebreakers. We are not actively talking to them about options yet. The announcement was made a few weeks ago as a substitution for the non-combat package of works, so we will, however, be looking at options.

[Kelly McCauley, Conservative, Edmonton West, AB]

Do you know when we will have a new announcement on what is going on with the polar icebreaker?

[Bill Matthews]

We don't have a time frame at this stage.

[Kelly McCauley, Conservative, Edmonton West, AB]

It's a six months, two years type of thing. Is there a level of urgency?

[Bill Matthews]

I suspect the former: six months.

[Kelly McCauley, Conservative, Edmonton West, AB]

Okay, that's fair enough. Just getting back to the costs, we've chosen the T26. Have we settled the contract yet with the BAE and Lockheed?

[André Fillion]

We awarded the design contract in February to Irving Shipbuilding, who in turn awarded the subcontract to Lockheed Martin Canada who is working with BAE Systems.

[Kelly McCauley, Conservative, Edmonton West, AB]

However, the question I have is if we have updated the costs on that. We saw the PBO's costs, which I understand were close to the PSPC-DND costs. The reason I ask is that the PBO costs were based on a lightship weight of 5,400. The T26 from what I've seen is about 7,000, so the added weight is obviously going to be added costs, etc.

Have we updated the costs at all since the decision?

[André Fillion]

What I can tell you is that we've just finished the competitive process to select the design. National Defence has a budget of $56 to $60 billion. The result of the competitive process confirms that at this point, there is still [Technical difficulty--Editor] in the budget to deliver the 15 surface combatants.

[Kelly McCauley, Conservative, Edmonton West, AB]

This is based on the heavier ship and the new design and everything?

[André Fillion]

On the results of the competitive process, which meets the requirements of the navy, yes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Vandergrift, you're nodding your head. It's still 60, give or take, obviously?

[Michael Vandergrift]

The competitive process tested this as well, right.

[Kelly McCauley, Conservative, Edmonton West, AB]

Okay, that's fair enough.

With the change in the order for Seaspan and the joint supply ships being moved up, what's the added cost going to be? Seaspan can't just drop tools and start up. What are the added costs and who's going to bear those costs?

[Bill Matthews]

Maybe I'll start.

The benefits of the reordering are that we were able to start JSS block construction earlier, so there's a benefit there in terms of the JSS.

[Kelly McCauley, Conservative, Edmonton West, AB]

I'm just asking specifically about the costs. What are they and who's bearing the costs?

[Bill Matthews]

I don't have a number for you, but the other thing I think it does for us is by putting a one-ship gap between the two JSSs, it lets us take any learning from JSS 1 and apply it to JSS 2, so we think we get a more efficient build.

[Kelly McCauley, Conservative, Edmonton West, AB]

Would you be able to provide us with the added costs, and again, who's going to bear those added costs? Is it the taxpayers or Seaspan?

[André Fillion]

We saw two opportunities there to mitigate the cost risks associated with this decision—not necessarily added costs, but the mitigation of cost risks. One of them is to bring the efficiency of JSS 1 into JSS 2 by giving the engineers enough time to do the design changes and to incorporate them into JSS 2, and another to avoid rushing into the construction of the offshore oceanic science vessel, which required more design maturing before the start of construction. We were worried about entering construction without a mature enough design, which would otherwise have actually driven costs up.

[Kelly McCauley, Conservative, Edmonton West, AB]

Let me ask a really straight question. Is there an added cost to the taxpayers of this change in order?