The Canadian shipyard building the navy’s new destroyers and the British defence contractor responsible for the basic design recently signed a collaboration contract, marking the next step forward in the multibillion-dollar program that the federal government has largely wrapped in secrecy.
Much of the program’s plans and costs remain shrouded in mystery and obfuscation — including precisely how much each of the first three warships will cost.
Word of the agreement, between Halifax-based Irving Shipbuilding Inc. and BAE Systems Inc. of the United Kingdom, came in a British publication a little more than a week after the federal government revealed it had signed an $8-billion implementation contract with the shipyard to begin construction of the long-delayed replacements for the navy’s Halifax-class frigates.
The Department of National Defence and Public Services and Procurement Canada say the implementation contract with Irving is a down payment for the first three destroyers, a procurement which on its own is expected to cost taxpayers $22.2 billion.
The navy is expecting to acquire 15 of the ultra-modern naval destroyers, the largest — in terms of dollars — military procurement in the country’s history.
Other allied nations, including the United States, Australia and the U.K., are more forthcoming about the costs associated with their warship construction. The data is publicly available.
The Defence Department says there are other costs — ammunition and training — included in the overall $22.2-billion price tag, but officials refused to disclose a detailed breakdown.
“At this point we have not specifically attributed a ‘per-ship’ cost for the delivery of Batch 1 ships, we have only attributed the cost to deliver all three ships,” the Defence Department said in a statement. There’s also no publicly available estimate for the second batch of three ships.
Despite repeated requests for clarification from CBC News, neither federal department explained why the cost estimates were not being released.
Experts say they must exist somewhere in the navy or the federal government, writ large.
Part of the reluctance may relate to the fact that the final design for the warships is not completed, and not expected to be finished — and approved — until 2028. The federal government is essentially designing and building at the same time, using the British Type 26 hull design as the basis and completing the design as combat systems are added.
But experts say there’s more at play in the secrecy than simple design mechanics.
Institutional paranoia
As strange as it may sound, there are many political ghosts and an unhealthy dollop of institutional paranoia left over from the long-buried F-35 saga still lurking within the new destroyer program.
The first attempt by the former Conservative government to acquire the Lockheed Martin-built stealth fighter floundered over political fights, as well as watchdog and public outrage over the enormous cost of the advanced warplane and the sense the figures were being deliberately lowballed.
The solution to keep the destroyer program on the rails? Say as little as possible. Keep a tight lid on the numbers. And avoid public attention.
Richard Shimooka, a defence expert at the Macdonald-Laurier Institute, said federal officials need to grow up and start defending and explaining their decisions in public.
“I think this, in some ways, represents the scars of the F-35, the first iteration of the F-35 program,” Shimooka said. “Canadians deserve to be informed.… And it’s now this kind of adversarial relationship that the department has with everybody, partly because, I think it’s become politicized. We can’t do anything to make the government look bad.”
Alan Williams, a former head of purchasing at the Defence Department, said he can’t believe there’s no per-ship cost estimate and that if he’d have presented an uncosted plan to a minister of the Crown, he would have been fired.
And if they are proceeding without a per ship cost estimate, even a ballpark, it would represent a gross violation of taxpayers’ trust, Williams added.
Either way, he said, it doesn’t look good.
“They certainly bastardized the process,” said Williams, who a couple of years ago published a warning that the warship cost projections were off and that the program was becoming unsustainable for the money that had been projected.
He also tried and failed to get the per-warship cost estimate from federal officials under access-to-information legislation.
Minister of Defence Bill Blair was in Halifax to announce the beginning of construction of the Canadian Surface Combatant fleet, 15 next-generation warships to replace the Royal Canadian Navy’s destroyers and frigates.
“We’re talking about billions of dollars,” Williams said. “It’s tragic when you can’t be open with the public. Let us know how our money is being spent.”
There is, Williams said, a fundamental lack of accountability.
“You have to really wonder: Do these people, the people running these programs, not understand the fundamental procurement, openness, fairness, transparency, integrity of the service, integrity of the process?” he said.
Dave Perry, president of the Canadian Global Affairs Institute and a procurement expert who has followed the program since its inception, says he’s yet to see government ministers defend — let alone explain — the program to Parliament and the public, which is shocking given the cost.
All of the experts say the $8-billion down payment announcement smacked of political message control.
You would be forgiven for missing it because — as part of a time-honoured tradition and strategy of both departments — the milestone shipbuilding plan was buried in a Saturday press release on March 8, in a too-clever-by half communications strategy meant to deflect and limit scrutiny of the multibillion-dollar program.
It’s strange, given the pressure Canada is under from the Trump administration and other allies to meet NATO’s two per cent defence spending commitment. You would think an $8-billion investment would be shouted from the rooftops.
But government officials have a long history burying shipbuilding costs on holidays and weekends.
Politically unpalatable price hikes to the Arctic Offshore Patrol Ships program were slipped out between Christmas and New Year’s in late 2022 and even the first iteration of the naval supply ship program was cancelled in 2008 late on an August Friday night just ahead of a federal election call.
For a real estimate, look to allies
Government watchdogs also have a fight on their hands when they look for numbers.
In 2016, the Parliamentary Budget Office (PBO) fought a prolonged battle for shipbuilding data and the estimates on which the government bases its analysis of the program.
At the moment, the only yardstick Canadians have to determine the cost of what they’ve been committed to comes from allies, the U.K. and Australia, which are building their variants of the Type 26.
Last year, Australia was able to estimate that it will cost taxpayers in that country $4.1 billion to build each of their Hunter-class frigates.
Similarly, in the U.K., the first frigates are being built under a $6.8-billion program with an average ship cost of $1.9 billion each.
Several years ago, the Liberal government made a deliberate choice to go with the British Type 26 design because it was considered “off-the-shelf” and cheaper to build than a specific Canadian-made design.
