03/01/2013 03:46 EST | Updated 05/01/2013 05:12 EDT

Peter MacKay: Navy Will Get Supply Ships, Despite Budget Officer Claims


OTTAWA - Defence Minister Peter MacKay says the navy will get the supply ships it needs, despite a parliamentary budget officer's report that shows the government has not set aside enough cash to build them.

MacKay would not indicate whether he'll ask the federal cabinet for more money.

In a report Thursday, budget officer Kevin Page said if the government sticks to the $2.6-billion budget, it will have to strip out capabilities from the ship design, which has already been downgraded once.

Page estimated replacing the existing replenishment ships — HMCS Preserver and HMCS Protecteur — would cost about $3.2 billion, but that the budget should be set at $4.1 billion because the Canadian industry has no recent experience building similar vessels.

Federal officials have said the ship's design will undergo a costing review, perhaps later this year.

MacKay says he'll study the advice, but insisted new ships will either "match or surpass" the current vessels.

Public Works Minister Rona Ambrose earlier this week defended the government's estimates, saying safeguards have been put in place to ensure the project is affordable.

Like MacKay on Friday, Ambrose underscored that the ships were still in the design phase.

Defence expert Dave Perry, of Carleton University and the Conference of Defence Associations, said the chances of the navy getting the ships it wants are "pretty low."

Based on government statements, the only option will be to reduce the vessels' capabilities, he said.

"They're not going to be able to get the same calibre of (resupply) ship," Perry said.

"Not only are you not getting the extra capability that was intended in 2004, '05, '06, you're going to be getting less capability than what was planned for in 2008."

The program to replace the existing replenishment ships, which refuel and restock warships at sea, was first proposed in by the Chretien government in 1994, but the Liberals didn't get around to ordering them until 10 years later.

The Harper government embraced the program, but shipyard proposals were deemed too expensive, among other things, in 2008 and the project was restarted the following year with a drastic scaling back of the capabilities the navy wanted.

The program is not expected to deliver replacement ships until 2018.

Internal Defence Department documents show the navy proposed a program budget of $2.9 billion, but it was scaled back to the current $2.6 billion, which the government has been called on to defend.

The budget officer's report said the higher cost is driven, in part, by the insistence that the ships be built entirely in Canada. That's something that runs contrary to the defence practices of many other nations, but MacKay said it's not something the government is willing to compromise on.

"There are lessons from the past we hope to learn from," he said following the signing of a defence agreement with Peru's defence minister.

"It is very much our intention that we get the right ship, the right build, the maximum benefits for Canadian industry and Canadian jobs. So, there is mutual benefit here to the Canadian Forces and the Canadian economy."

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