By Scott Taylor
On Saturday March 8 a major defence procurement announcement was made by the Department of National Defence, yet it caused barely a ripple through Canadian news media.
There was so little commentary over the announcement that one suspects the timing on the release was deliberate. Given that we are in the midst of a damaging trade war with the United States, and one of President Donald Trump's pet peeve's is Canada's lack of defence spending, one would think the Liberals would have wanted to make the most out of an $8 billion contract to build warships?
Instead DND held a hastily announced, late Friday afternoon technical briefing for select media, prior to the Saturday morning, March 8 official announcement. With parliament prorogued until March 24 and the Liberal Party leadership race winner to be announced the following day, the shipbuilding contract announcement unsurprisingly dropped into a media void.
It shouldn't have, and here's why. What was announced was an initial $8 billion contract for Irving Shipbuilding of Halifax to begin the construction of the first three Canadian Surface Combatant (CSC) warships. However, buried in the fine print was the fact that the total cost to build these three warships is expected to be a whopping $22.2 billion.
That equals $7.4 billion per ship. Given that Canada has announced they will be purchasing 15 CSC warships in total, for those doing the math, that amounts to over $108 billion in total for this project.
As most Canadians are not in the habit of shopping for modern warships that staggering cost may seem a little excessive. To be honest, it is obscenely excessive.
To give it some perspective we need to go back to the origins of this major procurement project. The Royal Canadian Navy planners wanted 15 ships to replace the now retired Iroquois Class destroyers and the 12 Halifax Class frigates which continue to toil past their service expectancy date.
The initial construction cost for these 15 ships was an estimated $14 billion. But the Royal Canadian Navy jettisoned that figure and in 2008 the CSC budget was set at $26.2 billion. That price tag included the construction of the vessels, infrastructure, project management, spare parts and some ammunition.
But since then the costs of the CSC has been climbing steadily. Several years ago, the Department of National Defence had put the cost at between $56 billion and $60 billion, and its officials insisted that would not go up. In 2022, the Parliamentary Budget Officer estimated the total cost of the Canadian Surface Combatant program, including development and acquisition, to be $84.5 billion.
The design of Canada's CSC is to be based on the BAE Type 26 destroyer which is currently being built for the Britain’s Royal Navy. While the Canadian design will be slightly larger and heavier, the British project is pegged at $15 billion (CDN) to acquire 8 ships.
Again for the amateur mathematician that means Canada would be paying more than double the amount per ship if Blair's estimate was correct. We now know it was not.
Another comparative shipbuilding cost yardstick for the laymen would be the Royal Navy's recent acquisition of two Queen Elizabeth-class aircraft carriers. These behemoths weigh 80,000 tons each and house up to 36 warplanes. The total cost was $12 billion (CDN) or $6 billion per aircraft carrier.
Keep in mind Canada is buying 8,000 ton CSC destroyers for $7.2 billion each.
For a Canadian comparison, back in the early 1990's Canada acquired the 12 Halifax Class frigates for a total construction cost of $4.3 billion, or $350 million per ship. Allowing for inflation, that would be roughly $700 million per ship in 2025 dollars. That is a far cry from $7.4 billion per CSC warship.
Which is why my friends, the Liberals chose to announce the latest contract for this project in the dead of night. Or in this case, on a mid-March Saturday morning.
