The Bluenose II under refurbishment in Lunenburg, N.S., in a 2012 photo. The project is over budget and three years behind schedule.Paul Darrow/The Globe and Mail
Nova Scotia's Auditor-General released his report on the restoration of the iconic Bluenose II racing schooner this week – and concluded the rebuilding was doomed from the start.
Michael Pickup chronicles all that went awry, including an unrealistic budget of $14.4-million, an overly ambitious timetable and ineptitude that included giving responsibility of managing the costly and complicated project to a department that usually deals with grants for cultural events and overseeing museums.
He notes that, in one key meeting where bureaucrats and other participants tried to figure out the risks of rebuilding the Bluenose II, no one in the room knew how to build a wooden ship.
Already, the restoration of the schooner, featured on the dime and considered Nova Scotia's sailing ambassador, is three years behind schedule and counting and $6-million over budget, not including $4-million to $5-million now in dispute between the builder and the province.
"I am disappointed by the failure of government leadership to effectively prevent and resolve these many issues and to have been unable to manage their way out of this situation for so long," Mr. Pickup said. His 47-page report takes readers behind the scenes of what went wrong:
The lure of federal dollars
In 2009, the federal government was looking for so-called shovel-ready projects in which to invest infrastructure money. The Bluenose II was one – and the federal dollars proved irresistible to the Progressive Conservative government about to go to the polls.
"The desire to obtain federal money for the project contributed to a rushed and incomplete project budget, along with an overly optimistic project schedule," Mr. Pickup writes.
Under the deal, the federal and provincial governments were to each contribute $7.2-million. Certain deadlines had to be met, however, for the province to collect the federal money – and they weren't. In the end, Ottawa's contribution was only $4.9-million.
The PCs lost the election; the NDP gained power and assumed the timetable and budget were accurate, says NDP Leader Maureen MacDonald, who was the health minister at the time.
"We were never aware it was never a real number. It was always presented as if that was a real number," says Ms. MacDonald about the $14.4-million budget. "Now we have the Auditor-General's report and he says that number was never realistic. It was never based on any detailed planning."
In his report, Mr. Pickup says the $14.4-million figure came from the 2009 proposal for refurbishing the Bluenose II submitted by the staff of the Lunenburg Marine Museum Society.
Buffetted by politics
Mr. Pickup blames the mess on the government, namely the department of Communities, Culture and Heritage. The department was responsible for initiating the plan and entering into the contracts, as well as for oversight, he said. For example, no penalties for missed deadlines were written into the contracts, resulting in about $1.5-million paid to the project manager and designer for extensions.
There was also "disregard," he says, for the cost – an increase of about 6 per cent – of having to meet the safety and construction requirements of the American Bureau of Shipping. This included installing a steel rudder that proved so heavy it was impossible to steer the boat and had to be replaced.
In January, 2014, several months after he took office, Premier Stephen McNeil asked the Auditor-General to investigate. Mr. McNeil blames the PC government for being in "a rush to get this project out the door heading out to an election campaign," and the NDP government for mishandling the file by giving it to a department incapable of handling it. "I think the people who should be held accountable were held accountable on October of 2013," he said, referring to the provincial election that saw his Liberals defeat the one-term NDP government.
Ms. MacDonald, who says the culture department was given the project by "default," accepts responsibility: "Elected people have to rely on the bureaucrats to do the day-to-day work. I am not somebody who wants to throw the bureaucrats under the bus. We are ultimately responsible to ask the hard questions to make the hard decisions. We probably should have asked harder questions and made tougher decisions than we made."
What's next?
Mr. McNeil is not ruling out legal action: "This has been a project that has had many hands on it, and we want to get a sense of who is responsible and if there is any way that we can recoup some taxpayers' money." As for the schooner itself, the Premier has said he hopes the Bluenose II will be sailing later this year.
The bottom line
University of Moncton professor Donald Savoie, an expert on the Canadian public service, says the government shouldn't be in the wooden-ship-building business – leave it to the private sector. "For government to say, look, we can manage this as efficiently as the private sector, it was ill-founded," Prof. Savoie said. "It doesn't work like that because there are too many pressures at play – too many political pressures, too many local politics … and we overload a government with so many things that adding on the Bluenose, it was a bad decision from Day One."