An Ottawa defence analysis says the federal government’s financial bind is bound to affect Irving’s lucrative shipbuilding contract.

Steven Staples, defence analyst and president of the Rideau Institute, says $2 billion in spending is being cut from the department of defence, and it seems pretty likely that means a smaller order for new navy ships.

“Is it really going to be $25 to $30 billion when you add the whole thing all together? No one should be surprised that this is going to be a lot smaller than originally advertised,” Staples told the Rick Howe Show Tuesday. “I think it’s going to be a lot smaller, or maybe even drawn out over a longer time period.”

Halifax’s Irving Shipyard was awarded the $25 billion procurement agreement to build navy ships last October. The Seaspan Marine Corp. shipyard in Vancouver will construct seven vessels under an $8 billion contract for non-combat ships. Another $2 billion for smaller vessels is yet to be allocated to another shipyard.

The government is currently negotiating the terms of the contracts to finalize details about how many ships will be built and what the designs and weaponry will entail.

Staples said taxpayers should be concerned that no contracts have been signed.

“You’ve got to wonder a bit that they’ve named the shipyard that they’re going to be negotiating with, without having the details worked out,” he said.

However, Nova Scotia’s Premier and Canada’s top soldier say the cuts to the Department of Defence’s budget will not affect the shipbuilding project.

Speaking at the Atlantic Province Economic Council’s Major Projects Event Tuesday, Premier Darrell Dexter said he hadn’t heard of any delays or changes to the deal.

Gen. Walter Natynczyk made similar comments at the Royal Canadian Legion’s 44th annual Dominion Convention at the Metro Centre Tuesday.

A government employer working on the project also told the Chronicle Herald there have been no changes to the project. The staff, speaking under the condition of anonymity, said they would know if any changes had been made.