The Defence Department balked after the cost of a long-delayed docking and refuelling station in the Arctic ballooned to more than twice its original estimate, a newly released document shows.
The soaring price tag is the reason the federal government decided to scale back its original plans for the Nanisivik naval facility, at the eastern entrance to the Northwest Passage.
A December 2013 briefing note to Defence Minister Rob Nicholson says the Royal Canadian Navy in 2010 approved a $258 million plan to build the facility. That was a huge jump from an estimate of $100 million made in 2007, when Prime Minister Stephen Harper made his "use it or lose it" speech about the Arctic.
The new cost proved too steep for the department.
The budget for the base is now $116 million.
The Canadian Press obtained the briefing note under the Access to Information Act.
The government has never before revealed just how much the Nanisivik facility would have cost if the navy's original plan had gone ahead. The minister's office has in the past cited the facility's remote location, the shorter Arctic construction season and permafrost as reasons for the delays and downgrade.
The facility was supposed be operational by 2015. That date has since been pushed back to 2017.
Original plans for the facility called for office, accommodation and workshop buildings as well as improvements to the wharf. The Nanisivik facility would have been staffed year-round and there would have been accommodations for up to 15 people.
Those plans have now been reduced to minor upgrades to the aging 1970s-era jetty, an unheated warehouse and a smaller tank farm that can store only one year's supply of fuel instead of two. Trailers will house up to six people — double that in an emergency — but only during the summer.
The Arctic facility "will have no functional use during winter," says the briefing note.
Gone, too, are plans for the "jet-capable" airstrip mentioned seven years ago in a news release. Instead, the military will have to either come in by sea or fly to nearby Arctic Bay, land on a gravel runway and then drive 33 kilometres to Nanisivik.
The Defence Department did not immediately respond to questions about the naval base.
The $258-million figure didn't come as a shock to one observer.
"It's in line with what I've seen," said Rob Huebert, an Arctic expert at the University of Calgary.
"I do not turn around and say, 'It's totally out of the picture.' That is the price of doing stuff in the North."
Russia, he added, is spending heavily to increase its military presence in the Arctic.
Under President Vladimir Putin, Russia has been busy rebuilding Soviet-era military bases in its north that were abandoned at the end of the Cold War, while a fleet of nuclear-powered submarines and icebreakers patrols its waters.
During his recent northern tour, Harper said Russia's growing military presence in the Arctic is a concern and Canada should not be complacent about it.
Canada's defence budget has faced cuts in recent years as the Conservative government looks to balance the books by 2015.
The Defence Department has seen its allocation slashed by more than 10 per cent since the end of the Afghan war and recent figures show spending is forecast to decline by $2.7-billion in anticipation of a balanced budget.