Canada Needs Bigger Budget for Arctic Fleet Expansion

Canada will have to spend substantially more than planned CAD 2.8 billion (USD 2.5bn) to build a proposed fleet of six to eight Arctic/Offshore Patrol Ships (A/OPS), the Parliamentary Budget Office (PBO) said in its analysis.

According to the PBO, it is more likely that, if there are no delays, four ships can be delivered with the CAD 2.8 billion budget at the minimum acceptable confidence level of 50%. However, any delay over a year would mean that the budget would likely only be sufficient to build three ships.

Schedule slips, therefore, may have a significant impact on the government’s purchasing power and on other projects down the pipeline, such as the Canadian Surface Combatant.

Alternatively, the government could increase the budget by an estimated CAD 470 million (USD 421m) to CAD 3.27 billion (USD 2.93bn) to acquire six ships with a 50% confidence interval.

It is estimated that it will take three years to complete the first ship and 30 months for the second ship. Due to learning curve increases in efficiency, ships 3 through 8 can take less time, or fewer employees, or a combination of both.

The National Shipbuilding Procurement Strategy (NSPS) was announced by the Government of Canada in June 2010 with the objective of replacing the current surface fleets of the Royal Canadian Navy and the Canadian Coast Guard. One of the ships that is included in NSPS is the (A/OPS).

The objective of the A/OPS project is to deliver six-to-eight ice-capable, offshore patrol ships for the Royal Canadian Navy, as well as jetty infrastructure. These ships will conduct armed sea-borne surveillance in the Arctic and support other units of the Canadian Armed Forces (CAF) in the conduct of maritime-related operations, and support other government departments in carrying out their mandates, as required.

The estimated budget for the jetty infrastructure is CAD 274 million (USD 245.5m).

Press Release; Image: Canadian Coast Guard