Canada Could Potentially Downsize Vessel Program

By Finance

On Friday Canadian Officials reported that a C$26.2-billion ($21.5 billion) program centering around the construction of 15 naval vessels might end up below its preset target as well as go over the appointed budget, becoming the latest in a series of challenges that Canada has had to deal with it in regard to the country’s military procurement process.

Back in 2010 Canada’s Conservative government made an announcement that it was launching a program aimed at replacing 12 frigates and 3 destroyers with 15 of the best modern warships available.

Officials, however, commented that the current plan has been set to construct “a maximum of 15 vessels” and the exact number of ships isn’t going to be known for another couple of years. If all goes as scheduled, construction should start during the next decade and the program should conclude in about 2040.

“Is it our belief that the sum of C$26.2 billion is to be final when regarding the time frame in question ? Maybe not,” an official commented, choosing to do so anonymously.

Back in November of 2013 the country’s official spending watchdog commented that the C$26.2 billion will not be sufficient for buying and then properly equipping 15 vessels. Nova Scotia based Irving Shipbuilding Inc. is to construct the ships and manage the project.

Military-related projects have proven over the years that they have a tendency to go over budget and many defense experts comment that inflation regarding shipbuilding projects can quite easily go anywhere from 5% to 7% on an annual basis.

“By all means we have to put some constrains on the projects’ budget but will we end up having fewer vessels, as is the case with a lot of our allies?,” the official further commented.

Keeping in mind Ottawa’s intentions, he pointed to a separate plan regarding the construction of Arctic patrol ships. Back in January Ottawa reported that it would be increasing its budget by over 10% as well as cutting down on the number of vessels, going from an initial 6-8 to 5.

Canada has had to deal with a number of military procurement issues since the beginning of 1990s, variously involving fighter planes, rescue helicopters, submarines, close combat vehicles and trucks.

Back in 2014 the Conservatives closed a deal with Lockheed-Martin Corp in the amount of C$9 billion for 65 advanced F-35 jets but in 2012 decided to can the plan after a probe determined that officials had deliberately downplayed the deal’s actual costs and risk levels.

The idea was for the F-35s to serve as replacements of the country’s old CF-18 fighters. Ottawa has reinstated the seeking process for new aircrafts and has extended the CF-18s’ operating life from 2020 to 2025.