WASHINGTON — The Canadian government has again increased its cost estimate for its next-generation frigate program, with a report by the Office of the Parliamentary Budget Officer showing a 9% increase in procurement costs since last year’s approximation.
The Canadian Surface Combatant program is now expected to cost CA$84.5 billion (U.S. $62.3 billion) to design and buy the 15-ship class.
In total, the ship program is now projected to cost CA$306 billion for the entire life of the class, including development, acquisition, operation and disposal of the ships, spanning a period from 2015 through 2081.
This program has seen a string of cost increases throughout its lengthy planning and development process to date.
The original 2008 budget for the surface combatant procurement was set at CA$26.2 billion. In 2017, that jumped to CA$62 billion. The procurement cost ticked up to CA$69.8 billion in 2019, after Canada selected Lockheed Martin’s design for the ship, and then to CA$77.3 billion in 2021. It now sits at CA$84.5 billion.
This week’s report shows an increase in expected production costs due to updated production timelines and higher inflation rates, according to the report.
Ship construction was pushed back by a year; the first ship will now enter production in the 2024-2025 time frame, and will get delivered to the Royal Canadian Navy in the 2031-2032 time frame. The final ship’s delivery has been pushed back to the 2048-2049 time frame.
“Construction and ship delivery schedule delays directly affect the construction cost element, and consequently extend other cost elements such as project management, engineering support, training and testing, infrastructure and facilities, ammunition, and spare parts,” according to the report.
Last year’s report warned of potential schedule delays, and the cost increases that would incur. The jump in the cost estimate in 2021 was attributed to an increase in the planned weight of the ship and did not yet take into account potential schedule slips.
The Canadian Surface Combatant is designed by Lockheed Martin as a subcontractor to prime Irving Shipbuilding. Lockheed recently said the ship’s preliminary design review will be completed by the end of this year.
Irving Shipbuilding spokeswoman Mary Keith told Defense News the company was “not asked to provide data or participate in the report’s preparation. We are currently reviewing the full report and will respond to any issues Canada has. Our focus is on the start of CSC production in 2024.”
