Analysis

Canada's vast shipbuilding plan still at starting line

Five years after Canada announced a $40-billion project to rebuild the navy, no steel has been cut, while the budget and the schedule both seem … elastic.

5 years on, there are lots of plans for renewal of Canada's navy — but no new ships

The destroyer HMCS Iroquois, seen in 2008, was officially retired last week in Halifax after serving the navy for nearly 43 years. A plan to build new Canadian warships is proceeding, slowly, and at significant cost. (Andrew Vaughan/Canadian Press)

A milestone approaches on June 3. It will be the fifth anniversary of one of the largest capital projects ever announced by the Canadian government: the $40-billion National Shipbuilding Procurement Strategy.

But hold the applause. It hasn't yet built or procured any ships. Be patient.

Shipbuilding, as it turns out, is hard. It's especially hard when you start with an industry that's been moribund for 30 years. So, before you build the ships, you have to build a shipbuilding industry.

So, how's it going?

Slowly

Consider these words from a "senior government official" at a press briefing on Friday that was cloaked in anonymity: 

"The procurement of these ships is an incredibly complex undertaking … with complexity comes uncertainty. Therefore, I am not here telling you that we have found all the answers and that the path forward is cast in stone."

Sounds encouraging! But in truth, the cautious official had it right. Nobody has the answers yet to some fundamental questions — such as, how many ships, exactly, will we get? And how much, exactly, will they cost?

It's a work in progress — slow, slow, progress. After five years, $500 million has been sunk into upgrading the two chosen shipyards, Seaspan in Vancouver and Irving in Halifax.

Soon, say government officials — but not for attribution, please — those yards will actually begin building the first two smaller ships: an Arctic offshore patrol ship in Halifax and a fisheries science vessel in Vancouver.

But the original plans seem somewhat elastic. When Prime Minister Stephen Harper first announced the Arctic patrol ships, the budget was $3.1 billion for "six to eight" ships. Now, it's more money for fewer ships: $3.5 billion for five or six ships. Maybe.

Workers look on from the bow of a ship as Prime Minister Stephen Harper addresses the crowd at the Halifax Shipyard in Halifax in 2012. Exactly how many ships will be built there and when they'll arrive remains unclear. (Andrew Vaughan/Canadian Press)

But that's peanuts compared with the massive project that will begin when those ships are complete: a fleet of "up to 15" Canadian Surface Combatants — full-size warships. They will, officially, cost an eye-popping $26.2 billion to build. 

Unless, of course, that budget, too, increases, and we end up paying more for fewer ships, as with the patrol ships. "Up to 15" seems to leave plenty of wiggle room.

So we won't know what we'll really pay for years to come.

Nobody will cut steel for the first of the Surface Combatants until "early in the next decade," say the anonymous officials. That ship won't be in service until "the middle of the next decade." And, fair warning, that $26.2-billion budget is definitely not firm. It's "an indicative cost." After all, the officials told reporters, "we have to have a point of departure."

Indeed we do. But the point of arrival and the cost of the trip seem very uncertain.

Made in Canada

At the core of the matter is a question. How much of a premium do Canadians want to pay to get a made-in-Canada Navy? What's it worth to keep the work at home, rather than going to the world's established shipbuilding nations?

Even traditional maritime giants often decide to send the work offshore in order to save a ton of money. The British Navy may have a history of 350 years and Rule, Britannia may be a nice song, but Britain hardly rules the waves anymore. So it's building four new naval supply ships at the Daewoo shipyard in South Korea, for roughly $1.1 billion (Canadian). That's for all four.

By contrast, Canada plans to build just two supply ships in Vancouver for $2.6 billion. That's right: our ships will be will be roughly five times more costly than the British ones. The difference is … theirs are nearly twice as big.

Or consider Denmark, where they're doing the design work on Canada's new fleet of Arctic patrol ships. The Danes may be experts at ship design, but they just took delivery of the Polish-built hull for a new Arctic patrol ship of their own. When the finishing work is done — in Denmark — the total cost of the ship is estimated at just under $100 million.

But do the math. Five Canadian patrol ships for $3.5 billion … that's about $700 million apiece, or seven times what the Danes are paying.

Did I mention this is hard?

About the Author

Terry Milewski

Terry Milewski worked in 50 countries during 38 years with the CBC. He was the CBC's first Middle East Bureau Chief, spent eight years in Washington during the Reagan, Bush and Clinton administrations and was based in Vancouver for 14 years before returning to Ottawa as senior correspondent.

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