POLITICS

French navy shipbuilder pitches to help build new fleet of Canadian warships

11/21/2013 04:09 EST | Updated 01/25/2014 04:01 EST
OTTAWA - Buoyed by Canada's new free trade deal and a defence co-operation agreement with France, one of Europe's largest shipbuilders is pounding on the door to be part of the Harper government's much-hyped national shipbuilding program.

DCNS, formerly known as Direction des Constructions Navales, is pitching itself as the ideal partner for Halifax-based Irving Shipbuilding, the federal government's go-to company for the construction of the navy's future combat fleet.

The high-profile lobbying effort comes before next week's report from the auditor general, which will say that the Conservatives have not earmarked enough cash over 30 years for their multibillion-dollar shipbuilding strategy, said a defence source familiar with the report's contents.

Michael Ferguson's report, to be released Tuesday, will also note that Defence and Public Works officials have "identified and are managing key project risks" including lack of competition, delays and unaffordable costs, said the source, speaking on condition of anonymity because he was not authorized to talk to the media.

But Patrick Boissier, president of DCNS, says the federal government's current approach has been focused on picking the best team, rather than the best design for the future ships, which are intended to replace the navy's destroyers and frigates with a single platform.

"We do not think this is the best way," Boissier told The Canadian Press.

"We think the best way is to select the most capable design because this process is a competition and will ensure we have best value for money."

Boissier made his pitch Wednesday night to an audience of defence experts, MPs, senior bureaucrats and members of the military, underscoring the company's established designs and the potential cost savings associated with the advanced, highly automated warships.

In reduced crew size alone, he estimated the French-designed ships could shave as much as $7 billion off the lifetime cost of Canada's proposed 15-vessel surface fleet.

That could be music to the ears of Conservatives, who've struggled to deliver military equipment on time and on budget since being elected in 2006. The auditor general's insistence on including the full life-time costs of military hardware has led to some eye-popping, politically damaging headlines.

The most high-profile example was the fiasco around the F-35 stealth fighter, where conflicting price tag estimates saw the program leap from $16 billion to $29 billion to an astonishing $44.8 billion over 42 years.

The bruising political battle over the jet forced the Harper government to pause the acquisition.

Public Works recently pegged the lifetime cost of new navy ships to be "in the vicinity of $90 billion," including $26 billion for construction and $64 billion for crew and upkeep over three decades.

Boissier claimed a partnership with the European defence giant would provide budget certainty, and could generate as many as 10,000 jobs in the Canadian defence sector.

The role of DCNS would be to provide Irving Shipbuilding with the ship design and project management expertise. But the political optics of a French company being nominally in charge might prove politically uncomfortable for the Harper government, which has painted the program as an all-Canadian venture meant to revive a moribund industry.

Just over two years ago, former defence minister Peter MacKay nixed the Canadian navy's overtures to Britain, which was sniffing around for partners in its development of the Type 26 Global Combat Ship.

"Canada will not be pursuing collaboration with the United Kingdom on our new surface combatant fleet," said Jay Paxton, MacKay's spokesman at the time.

But the reality is that it's been more than 15 years since Canada undertook the construction of major warships and much of the institutional knowledge and expertise has slipped away.

"We do think we have an arguments for selecting an offshore design, obviously adapted to the specific requirements of the Canadian navy," said Boissier. "You could always consider building a new design, but the cost will be much higher."

Both National Defence and Public Works are running into that very issue. The extraordinary design costs of the navy's planned arctic patrol ships caused a public kerfuffle last summer.