Irving Shipbuilding and the federal government have finalized a contract to build two additional Arctic and offshore patrol ships customized for the Canadian Coast Guard with a cost of $1.6 billion.
J.D. Irving vice-president of communications, Mary Keith, called it good news for shipbuilders as they now have the green light to start cutting steel.
"We're going to further grow our team [of 2,300] by roughly 500 people as we look to 2025 building these ships for Canada," Keith said.
"This is the result of the national shipbuilding strategy, it is delivering positive impacts here in Nova Scotia in terms of jobs, in terms of a growing supply chain of enterprises in the country and as well as community investments that we're making."
Ottawa announced the project in May 2019 as part of an investment to renew the Canadian Coast Guard fleet.
"The contract and more importantly the custom design of the vessel do take time," Keith said. "We've been working with Canada and the coast guard to finalize that design and to finalize what that contract would be."
Irving won the initial contract in 2011 to build six Canadian combat ships. Three of them have been delivered to the Royal Canadian Navy. Construction for the two new ships is expected to start this summer and should be completed by 2026 and 2027.
Ottawa said finalizing the deal followed a thorough review of the budget forecasts and program spending to date. The project budget for the first six vessels is now estimated at $4.98 billion, up from $4.3 billion. The addition of the coast guard ships to the existing contract is valued at $1.6 billion, up from $1.5 billion.
Supply chain disruptions
Timothy Choi, a naval affairs specialist at the University of Calgary, said cost increases are inevitable given the supply chain and labour disruption of COVID-19 combined with ongoing global inflation.
He said it is surprising that the Canadian Coast Guard's new budget figure is not higher, given the fact that most of the ship's spaces have to be modified to fit coast guard accommodations, IT, and workspace standards.
"It is actually a more complex vessel than the Royal Canadian Navy version," Choi said. "Due to a large number of additional sensors and equipment that the Canadian Coast Guard requires to fulfil its science missions. It is not simply a matter of removing the weapons from the Royal Canadian Navy version."
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