Canadian Surface Combatant programme to cost C$8 billion more than previous estimate, PBO report states

A report published by Canada’s Parliamentary Budget Office (PBO) on Friday, June 21, claims that the cost of the Canadian Surface Combatant (CSC) programme will likely reach C$69.8 billion (US$52.9 billion), or an increase of C$8 billion (US$6 billion) from the previous estimate, over a span of 26 years.

The total includes C$5.3 billion (US$4 billion) in pre-production costs, C$53.2 billion (US$40.3 billion) in production costs, and C$11.4 billion (US$8.6 billion) in project-wide costs under the programme, which seeks to introduce a new class of 15 multi-role warships into service with the Royal Canadian Navy. In comparison, the 2017 PBO report estimated a total program cost of C$61.8 billion (US$46.8 billion).

The difference in the estimates is due to new information on project specifications provided by the Canadian Department of National Defence (DND). In particular, ship construction will begin later (increasing inflation costs), the ship will be larger than assumed in the previous report (increasing real construction costs), and the cost of spares beyond the initial two years has been excluded (reducing real program costs).

The design chosen for the CSC will be provided by a Lockheed Martin-led consortium and will be based on BAE Systems’ Type 26 frigate. At the time of the previous cost analysis, the government had not yet selected a design for the warships.