The 2019 Parliamentary Budget Officer (PBO) report has indicated that the Canadian Surface Combatant (CSC) programme will now cost C$69.8bn ($52.7bn) over 26 years.
The previous report, 2017 PBO, estimated the programme would cost $61.8bn ($46.84bn).
Canada plans to acquire a fleet of 15 new naval warships that will serve as the country’s major surface component of maritime combat power.
The revision in the total programme cost is a reflection of inflated costs due to construction delay and an increase in the size of the CSC.
The break-up of the cost structure includes C$5.3bn ($4.01bn) in pre-production costs, along with C$53.2bn ($40.32bn) for production, and C$11.4bn ($8.64bn) in project-wide expenses.
A major driver of costs is the increase in the displacement of the ship. The 2017 estimate was calculated on the basis of a 5,400t lightship weight, which was an estimate based on available designs for the CSC programme at the time.
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Following selection of the BAE Systems Type 26 Global Combat Ship design, the weight increased to 6,790t. This increase has significantly contributed to the C$8bn ($6.06bn) difference in the two project cost estimates.
The updated plan cost includes project development, production, two years of spare parts and ammunition, training, government programme management, and upgrades to existing facilities.
Irving Shipbuilding is the prime contractor of the surface combatant project. The company awarded a subcontract to Lockheed Martin Canada to design the CSC vessels for the Royal Canadian Navy.
The Combat Ship Team responsible for design includes Lockheed Martin, BAE Systems, CAE, L3 Technologies, MDA, and Ultra Electronics Maritime Systems.
Construction of the first ship under the CSC project is scheduled to take place in the early 2020s.