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Warship replacement cost has more than doubled, says PBO

Parliamentary budget officer estimates it will cost nearly $62 billion to replace 15 ships – 2.4 times the original budget


 
Workers construct components of the Arctic offshore patrol ships at the Irving shipbuilding facility in Halifax on Friday, March 4, 2016. The company is shipbuilder and prime contractor for the $26-billion Canadian Surface Combatant program. (Andrew Vaughan/CP)

Workers construct components of the Arctic offshore patrol ships at the Irving shipbuilding facility in Halifax on Friday, March 4, 2016. (Andrew Vaughan/CP)

OTTAWA – The federal budget watchdog says the government’s multibillion-dollar effort to replace the navy’s warship fleet is now on track to cost taxpayers 2.4 times more than first expected.

The parliamentary budget officer estimates it will cost Ottawa nearly $62 billion to replace 15 ships – more than twice the original 2008 budget of about $26 billion.

Jean-Denis Frechette’s analysis says the per- ship price tag has swelled to $4.1 billion – up from the $1.7-billion estimate in 2008.

The report estimates the government would only be able to afford six ships if it tries to keep the program on budget.

Ottawa launched a competition last fall asking some of the world’s largest defence and shipbuilding companies to design a potential replacement for the navy’s 12 frigates and three destroyers.

The chosen designs will be constructed by Irving Shipbuilding in Halifax, and the new vessels are expected to arrive in the mid-2020s.


 

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