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New Bluenose Docs Show Need for AG Investigation

January 27, 2014
New Bluenose Docs Show Need for AG Investigation

HALIFAX, NS: The Canadian Taxpayers Federation (CTF) released new documents obtained through the Freedom of Information and Protection of Privacy Act that reveal some materials purchased for the Bluenose were sold to the government at a whopping 43 per cent mark-up. (Photo Bluenose II: Flicker/archer10 - Dennis)

“There are just too many questions about the spending around this very important project. It’s time for the Premier to ask the Auditor General to step in, find out why this is such a mess, and tell us what can be done to ensure it doesn’t happen in the future,” said Kevin Lacey, Atlantic Director of the Canadian Taxpayers Federation.

The mark ups are contained in the contract (see section 6.2) signed between the Province of Nova Scotia and the shipbuilder (Lunenburg Shipbuilding Alliance).

“Change order forms” show how the mark-ups work. Any modifications not included in the original contract are subject to the 43% mark up.

In one case, on December 14th, 2011 the province purchased two washing machines and two dryers at a total cost of $5,399.96, of which the builder charged 43 per cent or $2,321.98 in mark-up. In another case, on November 21st, 2012 new portholes (i.e. boat windows) were purchased for $12,194.97 and the mark up on those was 43 per cent or $5,243.84 .

The builder also charged a 20 per cent margin on any independent contracting services.  For example, in June 14th, 2013 the province spent $22,114.50 for hoisting and transportation services. Of that, $3,685.75 was margin for the builder.

These big mark-ups are just the latest in a series of questionable uses of taxpayers’ money. All of them have been brought to light by independent, FOIPOP inquiries.

In December, the CTF revealed that MHPM consultants have charged over a million dollars more than their original contract to “project manage” or ensure that the boat was built on time and on budget – which of course, it is not by any standard. This grows by $25,000 per month – their average billing rate. When asked about the over budget consultants, the Minister of Communities and Heritage said they do “good work”.

“It is often said that boats are just holes in the water which you pour money into.  Well, with this project the hole just keeps getting bigger and bigger,” added Lacey.

When confronted, the province has admitted that they have missed numerous completion dates and are millions over budget but they have not said by exactly how much.

The Minister has announced a departmental review of the Bluenose in December 2013, but the CTF believes an independent review is what is needed.

“If the government is serious about a review, why not have it be conducted independently by the Auditor General? A department reviewing itself is like a student grading their own exam,” concluded Lacey.

A copy of the contract to re-build Bluenose can be found HERE & HERE & HERE

All the “change order” forms can be found HERE & HERE & HERE 


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