Cost to build Navy Warships more than Doubles to $30 Billion

The price of 15 new warships for the navy has more than doubled, from $14 billion initially set aside for construction to more than $30 billion, says an independent analysis of the largest military procurement in Canadian history. The cost analysis was conducted by the firm A.T. Kearney.

That takes the total cost to upgrade Canada’s navy to $42 billion; $16 billion more than the $26.2-billion approved by the government for the Canadian Surface Combatant program. That would make the warships component alone more expensive than the approved budget for the entire national shipbuilding program, which also includes supply ships, coast guard ships and Arctic vessels.

The new government has moved to reform Canada’s costly National Shipbuilding Procurement Strategy, promising a new system to evaluate costs, to launch quarterly public updates and provide annual reports to Parliament.

Public Services Minister Judy Foote is also hiring a shipbuilding expert to advise the government, filling a gap in expertise in her department, tasked with managing the massive billion-dollar ship program.

During the last election campaign the Liberal party campaigned on a promise to meet the commitments that were made as part of the National Shipbuilding and Procurement Strategy. The platform stated that the new Liberal government will have the funds needed to build promised icebreakers, supply ships, arctic and offshore patrol ships, surface combatants, and other resources required by the navy.

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