Escalating costs at the Seaspan Shipyard in Vancouver in 2019 depleted the multi-million dollar contingency fund set aside as part of the budget to build three offshore fisheries science vessels under Canada’s National Shipbuilding Strategy.
The Canadian Coast Guard Ship John Franklin and CCGS Capt. Jacques Cartier were delivered in 2019, and a third ship is expected this year.
The 63-metre vessels are the first large civilian ships produced under the federal shipbuilding program. They will be used to monitor fish stocks and ecosystems.
The $687-million budget included an escalation contingency fund. The amount was not disclosed.
The full amount was redacted in a federal document authorizing the final dip into the fund. It was released to CBC News under access to information legislation.
Millions already spent by last May
According to a memorandum prepared for Jonathan Wilkinson, the former minister of fisheries and oceans, the project had already used $19 million in contingency funds by May 2019.
But more was needed, the memo said, to cover “escalating project costs such as labour rates and owner’s changes, as well as other unexpected increases to project costs including transition into service costs.”
“Access to the remainder of the contingency funding [redacted] is now required,” the two-page memo said.
A view of the Seaspan shipyard in North Vancouver, B.C. Four science vessels, two naval supply ships and a polar icebreaker are to be built here under the $36-billion National Shipbuilding Procurement Strategy. (Seaspan)
A decision was needed by July 5, 2019, the note said, “in order to adjust the Shipbuilding Contract with Vancouver Shipyards in a timely fashion and further advance the project in a seamless manner.”
Wilkinson signed off on the request.
A small percentage of overall budget
The Department of Fisheries and Oceans would not disclose the amount, but said Wilkinson was not asked to approve new funding.
“The overall contingency fund is a small percentage of the overall budget of $687 million, and is a pre-planned funding amount to cover potential increases to labour rates at the shipyard, economic price and foreign exchange adjustments, and any necessary changes to operational requirements that surface over the 5-year project implementation phase,” DFO spokesperson Benoit Mayrand said in a statement to CBC News.
“The total value of available contingency funding cannot be released, as its use will be subject to negotiations with the shipyard,” he said.
In an emailed statement, Seaspan spokesperson Amy MacLeod said “requests for contingency funding is a normal, ongoing part of the contracting process on large projects such as the [National Shipbuilding Strategy].”
What we know about the funding deal
When the agreement in principle with Seaspan was announced in 2015, the total project budget was set at $687 million.
Federal officials said at the time the total included $59 million for project management, work up to that date and contingencies, $51 million for engineering costs, and the remainder for construction, contingencies, insurance, warranty, spares and training material.
Seaspan committed to deliver three offshore fisheries science vessels at a total ceiling price of $514 million.
The ceiling included fees and an allowance for contingencies “that may or may not be required to address the risks associated with building a new class of ships in what is essentially a brand new shipyard.”
Incentives established to keep costs under budget
The agreement set out three cost bands and established incentives to the yard if the final cost came in below target.
If the final cost came in under a $400-million target, Canada would pay Seaspan a fee and the government and yard would share the savings between the actual and target costs.
Delivery of the first vessel was scheduled for spring 2017, the second vessel five months later and the third three months later.
The delivery date in every case was missed.
The delivery of CCGS Capt. Jacques Cartier was delayed due to defects in the vessel. (Ben Nelms/CBC)
Microscopic cracks in the welding were discovered on all three vessels in 2018. The faults were found after two of the ships had passed initial inspections.
The original budget for the ships of $244 million was developed in 2004.
During the 2015 briefing, federal officials said the first forecast was unrealistic because it did not adequately provide for inflation, management, engineering and design costs and did not properly include contingencies.
EDMONTON – RCMP say a second suspect has been arrested in the killing of an Alberta county worker.
Mounties say 28-year-old Elijah Strawberry was taken into custody Friday at a house on O’Chiese First Nation.
Colin Hough, a worker with Rocky View County, was shot and killed while on the job on a rural road east of Calgary on Aug. 6.
Another man who worked for Fortis Alberta was shot and wounded, and RCMP said the suspects fled in a Rocky View County work truck.
Police later arrested Arthur Wayne Penner, 35, and charged him with first-degree murder and attempted murder, and a warrant was issued for Strawberry’s arrest.
RCMP also said there was a $10,000 reward for information leading to the arrest of Strawberry, describing him as armed and dangerous.
Chief Supt. Roberta McKale, told a news conference in Edmonton that officers had received tips and information over the last few weeks.
“I don’t know of many members that when were stopped, fuelling up our vehicles, we weren’t keeping an eye out, looking for him,” she said.
But officers had been investigating other cases when they found Strawberry.
“Our investigators were in O’Chiese First Nation at a residence on another matter and the major crimes unit was there working another file and ended up locating him hiding in the residence,” McKale said.
While an investigation is still underway, RCMP say they’re confident both suspects in the case are in police custody.
This report by The Canadian Press was first published Sept. 13, 2024.
RICHMOND, B.C. – The Integrated Homicide Investigation Team says the 26-year-old son of a man found dead on British Columbia’s Sunshine Coast has been charged with his murder.
Police say 58-year-old Henry Doyle was found badly injured on a forest service road in Egmont last September and died of his injuries.
The homicide team took over when the BC Coroners Service said the man’s death was suspicious.
It says in a statement that the BC Prosecution Service has approved one count of first-degree murder against the man’s son, Jackson Doyle.
Police say the accused will remain in custody until at least his next court appearance.
The homicide team says investigators remained committed to solving the case with the help of the community of Egmont, the RCMP on the Sunshine Coast and in Richmond, and the Vancouver Police Department.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, have broken off without an agreement following 15 hours of talks.
Joe McCann, president of Amalgamated Transit Union Local 1724, says they stayed at the bargaining table with help from a mediator until 2 a.m. Friday and made “some progress.”
However, he says the union negotiators didn’t get an offer that they could recommend to the membership.
McCann says that in some ways they are close to an agreement, but in other areas they are “miles apart.”
About 600 employees of the door-to-door transit service for people who can’t navigate the conventional transit system have been on strike since last week, pausing service for all but essential medical trips.
McCann asks HandyDART users to be “patient,” since they are trying to get not only a fair contract for workers but also a better service for customers.
He says it’s unclear when the talks will resume, but he hopes next week at the latest.
The employer, Transdev, didn’t reply to an interview request before publication.
This report by The Canadian Press was first published Sept. 13, 2024.
