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Current Canadian Surface Combatant (CSC) program to cost at least $77.3 billion, says PBO

Ottawa (Ontario), February 24, 2021

The Parliamentary Budget Officer (PBO) today released an updated cost estimate of the Canadian Surface Combatant (CSC) program. This report was prepared in response to a request from the House of Commons Standing Committee on Government Operations and Estimates (OGGO).

The report, The Cost of Canada’s Surface Combatants: 2021 Update and Options Analysis, examines the cost of the existing CSC program, which is intended to replace both the current fleet of Halifax-class frigates and three decommissioned Iroquois-class destroyers with a new fleet of 15 warships, based on the Type 26 ship design.

“We estimate the fleet of new ships, based on the Type 26 design, will cost $77.3 billion to build”, said Yves Giroux, PBO. “A one-year delay would increase that cost to $79.7 billion, and a two-year delay would see the cost rise to $82.1 billion.”

The PBO’s latest cost estimate to build the Type 26 ships shows an increase of $7.5 billion over his 2019 estimate due to updates in the ship’s specifications and production timelines.

The report also presents a cost analysis of two other ship designs: the FREMM European multi-mission frigate and the Type 31e, a class of general-purpose frigates planned for the United Kingdom’s Royal Navy.

The cost of acquiring 15 FREMM ships is estimated at $71.1 billion, while the cost of a fleet of 15 ships based on the Type 31e design is estimated at $27.5 billion. These estimates are inclusive of cancellation costs, running a new competitive design selection process, and an additional four-year delay in the start of construction. It is important to note that these ships have different characteristics and capabilities.

The report also considers the cost of a mixed fleet: three of the Type 26 ships and 12 ships of either of the alternate designs. Under this scenario the costs increase to $71.9 billion for the mixed FREMM fleet, and $37.5 billion for the mixed Type 31e fleet.

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