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Coast Guard ship that underwent $9-million in repairs in 2009 sells for $373,000

By Marco Vigliotti      

NDP procurement critic Erin Weir slams the sale as 'outrageous,' saying the Liberals are only recovering a little more than a nickel for every dollar put into repairing the vessel.

The federal government has sold a former Coast Guard vessel, known as CCGS Tracy, for $373,000. It was repaired for millions only eight years ago. Photograph courtesy of GCSurplus.ca
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A decommissioned Coast Guard ship that underwent $9-million in repairs in 2009 only to be permanently docked four years later has been sold for $373,000 after being offered for sale on the government’s surplus website. 

“It’s outrageous,” NDP MP and party procurement critic Erin Weir (Regina-Lewvan, Sask.) told The Hill Times.

“The current Liberal government is only recovering a nickel for every dollar the former Conservative government put into repairing the vessel.”

The vessel, named CCGS Tracy while in commission, was sold to an unspecified buyer on March 1, according to the Canadian Coast Guard.

It was offered for sale on the GCSurplus website, where government-owned assets no longer deemed necessary are made available for purchase, The Hill Times reported last month. The minimum bid was listed as $250,000. 

The sale comes after the former Conservative government awarded Quebec-based Verreault Navigation Inc. a $6.8-million contract in 2009 to conduct “major repairs” to the ship. 

Richard Beaupré, the firm’s president and chief operations officer, said in an interview that the number was actually just over $9-million, a figure the Coast Guard confirmed.

The Coast Guard in 2009 expected that the repairs would keep the vessel in service for the following 10 years. But only four years later, it removed the CCGS Tracy from service.

Mr. Weir blamed poor management for failing to recoup a larger share of the repair costs, saying fault either lies with the former Conservative government for wasting millions on repairs for an aging, unsalvageable vessel, or with the Liberals for selling it at a fraction of its cost.

“There’s no scenario in which it makes to spend $9-million repairing a vessel only to sell it for half-of-a-million dollars,” he said, adding that taxpayers “deserve some sort of explanation.”

Mario Pelletier, deputy commissioner of the Canadian Coast Guard, told The Hill Times the repairs were necessary to ensure the vessel met Transport Canada operating requirements. He placed the cost of a replacement ship for the Tracy at $300-million.

“It’s a large number, but in the context of marine industry, it’s the cost of doing business,” Mr. Pelletier said of the $9-million repairs in an interview.

But Mr. Weir argued that the $9-million investment in repairs only makes sense if it could be recouped in a higher selling price, or through significantly extending the lifespan of the vessel, neither of which occurred in this case.

Fisheries and Oceans Minister Dominic LeBlanc (Beauséjour, N.B.) did not respond to messages seeking comment before press time.

Conservative MP Alupa Clarke (Beauport-Limoilou, Que.), his party’s critic for public services and procurement, accused the Trudeau government of refusing to tell the public the reasons behind the decision to sell the CCGS Tracy, and if they have a “strategy to meet operational needs moving forward.”

Instead of selling off Coast Guard ships, he said the Liberals should be developing a plan to deliver replacement vessels, and roll out fleets based on the end of the anticipated life cycle of the ships still operating.

Mr. Pelletier said the Tracy was put out of commission as part of cost-cutting measures introduced in 2012 by the former Conservative government to trim the federal budget deficit.

The vessel is a buoy tender, which are responsible for maintaining and replacing buoys, navigational floating devices.

As part of orders to find cost efficiencies, Mr. Pelletier said the Coast Guard explored the concept of contracting out buoy-tending services to the private sector, but discovered the cost was far greater than performing the service in-house.

But as part of the study, the Coast Guard discovered new efficiencies in how the buoy-tending program is delivered, he said, which provided “more ship time” to perform buoy tending, leading to the Tracy being declared surplus.

He added that while the Coast Guard is in need of more vessels, the Tracy did not meet its need for adaptive, “multi-purpose” ships that can escort other ships through the ice and deliver other programs.

However, Mr. Weir insists that the entire ordeal suggests poor long-term management of government assets. 

“To have $9-million of investment depreciate down to less than half-a-million dollars in eight years, it strikes me a pretty poor return, and not what we would expect from a Coast Guard vessel,” he charged. 

mvigliotti@hilltimes.com

The Hill Times 

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