Saturday, August 23, 2008

Signs of tough times in the federal budget

Friday evening at 8:30 with no government officials available to respond, another late announcement was dropped into the weekend wilderness by timid Conservatives. This one was a big cancellation of two major ship contracts. Given that the cancellation of one of these contracts is being viewed as devastating to the navy, federal budgetary times must be tough indeed. Military spending has been near and dear to Harper's heart. From David Pugliese's report:
Two major programs to rebuild Canada's maritime capabilities were thrown into limbo Friday night after the Conservative government scuttled its multibillion-dollar plans to purchase a resupply ship for the navy and new patrol vessels for the coast guard.

In a news release, the government announced it had rejected the bids it had received for the navy's $2.9-billion Joint Support Ship project. Both bids were significantly over the established budget for the shipbuilding program, the release stated.

Canwest News Service reported in May that the government had rejected the bids but federal officials claimed the procurement process was continuing.

The late Friday news release also noted that a $750-million project to purchase 12 mid-shore patrol vessels for the Canadian Coast Guard has been cancelled. Bids had been received for that program but they exceeded the anticipated costs, according to Public Works.
The cancellation of the Joint Support Ship project is already causing some to analogize what will have to be done to keep the existing ships in working order to what the air force does with the Sea Kings. Not good:
Defence officials said privately the problems with the Joint Support Ship program could jeopardize Canada's ability to keep warships at sea.

The navy currently uses two 40-year-old ships to refuel and resupply its frigates and destroyers. The Joint Support Ships were to replace those vessels by 2012.

Navy officers said last night they were going to approach the problem in a similar fashion to how the air force has continued to operate its aging Sea King helicopters.

"If the Protecteur and Preserver are going to be needed longer than expected, we will also determine what needs to be done to keep our supply ships safe, operational and available until they can be replaced," one officer noted.

"We would deal with that issue in the same way we are managing comparable risks today - just as the air force has done with the Sea King helicopter - and with equal confidence in the skills and dedication of our people."
Can't help but be reminded of how the Liberals have been pilloried by Conservatives for years for cancelling a contract to replace the Sea Kings in 1993, irrespective of any facts surrounding the cancellation such as fiscal capacity. I assume Conservatives will offer the same criticism of Harper for his Sea Kinging of the Joint Support Ships, right? Well, let's not hold our breath on that...

This is the latest backtrack from Harper on naval purchases. During the 2006 campaign, he promised to buy three armed icebreakers for the north. That's been reduced to one.

As FarNWide theorized Friday, the new budget surplus numbers for this month seemed highly suspect in the wake of a few months of deficit. This late night cancellation suggests there may be some truth to that.