Dan Middlemiss, 3 February 2021
Lee Berthiaume yesterday reported that the Department of National Defence (DND) now expects the first of the new Canadian Surface Combatants (CSC) will be delivered “years later than expected” as officials “grapple with unexpected design and construction challenges.”[1] The first ship is now expected to be delivered “in the early 2030s,” and this means that Canada’s current Halifax-class frigates will have to keep operating well into the 2040s – these ships are already showing their age and have been encountering corrosion and other structural problems. It would seem reasonable that the added costs of operating these ships for this extended period should be added to costs of the CSC program.
Astonishingly, DND still maintains that the 15 CSC warships will remain within the cost estimate of $60 Billion. The Parliamentary Budget Officer (PBO) is expected to release its latest cost update for the CSC later this month, and some analysts are projecting a total cost approaching or exceeding $70 Billion. Readers will recall that the PBO estimated in June 2017 that each year of delay would add an additional $3.58 Billion to the CSC program.[2] Since 2017, there is speculation that the actual design of the CSC has changed substantially, thereby adding weight and cost to the warship. The PBO is expected to incorporate the additional costs of any such design changes along with the costs of program slippages in its forthcoming projection.
For those wishing to learn more about the costing of modern warships, with a particular focus on the CSC, go to the following website, Canadian Global Affairs Institute, “Defence Deconstructed” podcast series, “Modern Warship Costing.”[3] One of the podcast participants, Ian Mack, foresees the coming PBO report as bad news for DND and the CSC, and outlines five possible options the government could opt for to deal with the CSC cost growth, none of which he views as desirable. Another of the podcast participants makes the staggering assertion that, even after the first ship is built, Canadians still will not know the actual cost of the CSC! Interesting listening...
Notes
[1] Lee Berthiaume, “National Defence grappling with new delay in $60B warship project”, ctvnews.ca, (2 February 20121). Accessed at: https://www.ctvnews.ca/politics/national-defence-grappling-with-new-delay-in-60b-warship-project-1.5291839
[2] See, Canada, Parliamentary Budget Officer, “The Costs of Canada’s Surface Combatants”, (1 June 2017), 28. Accessed at: https://www.pbo-dpb.gc.ca/en/blog/news/CSC_costing
[3] Canadian Global Affairs Institute, “Defence Deconstructed” podcast series, “Modern Warship Costing”, (recorded 20 January 2020). Accessed at: https://soundcloud.com/user-609485369/defence-deconstructed-modern-warship-costing
