Canadian Navy using leased supply ship more often — contract boosted by $71 million

The initial contract for use of MV Asterix over a five-year period had been set at $620 million.

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The Canadian military is using a leased supply ship more than it planned and will spend an extra $71 million to keep using the vessel at sea.

The ship, the MV Asterix, was at the heart of the failed legal case against Vice Adm. Mark Norman, who had argued for leasing the supply vessel because of ongoing delays in the program to construct two other supply ships for the navy.

Asterix is being leased from Federal Fleet Services, a company associated with Davie Shipbuilding in Quebec, and has been operating in support of the Royal Canadian Navy since 2018.

Asterix was an existing commercial vessel converted for use as a naval resupply and refuelling ship and Davie delivered the ship on time and on budget.

The initial contract for use of Asterix over a five-year period had been set at $620 million, but because the navy is using the ship more frequently, that price tag will be increased, according to national defence.

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The contract will be increased to $691 million, confirmed national defence spokesman Dan Le Bouthillier.

Asterix allows the navy to continue to resupply its ships at sea while ensuring sailors continue to be trained in resupply missions, he added.

The navy is waiting for delivery of two Joint Support Ships which are to be built at Seaspan in Vancouver. The first Joint Support Ship or JSS was supposed to be delivered in 2017 but construction didn’t start until 2018. The vessel is now expected to be delivered in 2023. A second ship is expected in 2025.

The JSS project was supposed to cost $2.3 billion, but last year it was revealed that the price tag had climbed to $4.1 billion. That jump in cost had been predicted seven years earlier by the Parliamentary Budget Officer who warned that the project would require $4.13 billion.

Because of the ongoing delays in the delivery of the JSS, the navy pushed for the lease of the Asterix supply ship, a project that was championed by Vice Adm. Mark Norman.

That ship was at the centre of the two-year legal battle Norman found himself in when the RCMP charged him with breach of trust for allegedly tipping off Davie Shipbuilding the Liberal government was considering delaying their Asterix deal.

The legal case against Norman collapsed in 2019, forcing the federal government to pay the naval officer an undisclosed financial settlement as well as prompting questions about whether the charge had been politically motivated.

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The Liberal government began their efforts to derail the Asterix project shortly after being elected in the fall of 2015. The move came after cabinet ministers, including Scott Brison and defence minister Harjit Sajjan received a letter from the Irving family with a complaint that the Irving proposal for a similar supply ship was not examined properly. Irving has denied any suggestion it was involved in political meddling.

Le Bouthillier noted there is an option for national defence to extend the lease for Asterix when the initial agreement comes to an end in 2023. “No decision has been made by the Government of Canada on an extension of the contract,” he added.

Davie is also offering a second supply ship at $500 million to entice the Liberals to move ahead with such a purchase but that offer has been rejected by Prime Minister Justin Trudeau. Davie has said the Asterix’s sister ship — Obelix — can be ready for missions with the navy within 24 months. The option is also available for the government to purchase both vessels instead of leasing them.

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