Cost of Canadian navy warship project increases to $70B, according to new PBO estimate

National Post
A representation of the BAE Systems Type 26 Global Combat Ship National Post | James Alexander Michie

A representation of the BAE Systems Type 26 Global Combat Ship. BAE Systems

According to the new PBO estimate, the cost of the Canadian Navy warship project increases to $70B. If so, the estimate is about $8B higher than the previous two years ago. The Canadian Surface Combatant program is the largest single expense in the history of the Canadian government.

Thus, it is already well known that the cost of the new surface combat vessels of the Canadian navy has increased even more due to delays and changes in the size of the ship. At least, this is what is indicated in a new report from the Parliament Budget Officer. In this way, the PBO establishes that the latest cost estimate of Canadian surface combat vessels is $ 70 billion, about $ 8 billion more than its previous estimate two years ago.

It should be noted that the updated estimate, published on Friday, covers the cost of project development, the production of ships, two years of spare parts and ammunition, training, management of government programs, improvements to existing facilities and applicable taxes.

They could spend years to know the real cost

It is important to note that the Canadian Surface Combatant program is the largest single expense in the history of the Canadian government. In fact, the project led by Irving Shipbuilding on the east coast consists of producing 15 warships to replace the fleet of frigates of the Halifax class and the destroyers of the Iroquois class that the navy operated previously.

For its part, the conservative government originally estimated that the cost of the ships would be around $ 26 billion. The DND now claims that its estimate is between $ 56 billion and $ 60 billion.

Even so, it is important to make an explanation. And it could be years before the real cost for taxpayers for the mega project is known since the project is just beginning. Being that the PBO report warned that any delay in the construction of the first ship will be costly. A one-year delay, for example, could increase costs by almost $ 2.2 billion, he added.

Likewise, Pat Finn, DND’s head of acquisitions, said PBO’s estimates align closely with what the department considers the cost of the program. He noted that, unlike the PBO, the department does not consider taxes in its cost figures. That’s because those fees finally go back to the federal treasury.

Source: David Pugliese, Ottawa Citizen | National Post

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