By Shaun McDougall, Military Markets Analyst, Forecast International.
The Canadian Department of National Defence has responded to media claims that the future Canadian Surface Combatant (CSC) program is in trouble, but the government’s effort to assuage concerns is of little consolation. The CSC is a planned class of ships that will replace Canada’s Halifax class frigates and Iroquois class destroyers. CTV News recently obtained internal planning documents that said the CSC is at “very high risk” of running over budget and behind schedule and of lacking skilled manpower. It also said that there is a high risk the CSC will fail to provide the necessary capabilities. The document warned that the program “may be unable to deliver the optimal number of ships with the capabilities necessary to meet operational requirements.” Statements like these are a significant concern for a costly project to replace the bulk of the Royal Canadian Navy’s might.
In response to media reports, the government issued a statement noting that the project is still in the definition phase, and that the document in question is simply a tool used to identify and mitigate risks early in the program. “As the project progresses through the definition phase, National Defence and the Royal Canadian Navy will continue to evaluate risks, adapt accordingly, and find efficiencies when and where possible,” the statement reads. It continues, “Through the design-then-build approach, the ship designs will be reviewed, refined and matured to get all of the production details right, and to factor in potential risks and finalize costs and schedule.” The statement noted that it is not unusual for some risks to be assessed as high this early in the life of a program, and that these assessments may change as the project develops.
The government has a point, but onlookers have a right to be concerned given the uninspiring track record of Canadian shipbuilding programs. After a decade of work, Canada is only now making use of its Victoria class submarines, but problems with the subs linger. The Arctic Offshore Patrol Ship program had to be scaled back because of budget issues, and a contract signed earlier this year doesn’t even guarantee delivery of the six ships the Navy wants. Even more troublesome, the Navy has turned to leasing barges and foreign supply ships because its two supply ships were retired before a replacement was ready. That replacement, the Joint Support Ship, is running years behind schedule and has suffered its own cost problems.
The Navy is already facing a similar issue with its destroyer fleet, exacerbating concerns about the CSC. At one point, the program called for delivery of a new ship as early as this year. That timing would have worked out well, as the Navy recently retired two of its three destroyers. www.nowtime.xyz One of those retirements was unplanned due to collision damage sustained in 2013. HMCS Athabaskan is now the Navy’s only remaining destroyer. As the Iroquois class is Canada’s only ship with long-range air defense capabilities, the Navy will have to rely on U.S. and NATO allies more heavily until the CSC is ready – currently not anticipated until the 2020s.
The Navy has a requirement for 15 ships, representing a one-for-one replacement of 12 frigates and three destroyers. The acquisition effort has a budget of CAD26.2 billion, but a November 2013 report from Canada’s auditor general suggested that the initial budget figures are more placeholders than estimates of actual program costs. That report also chastised the government for not revising the program budget in recent years despite changes in labor and material costs, and questioned how many ships the Navy will actually be able to afford with static budgets. Total acquisition costs may therefore be higher than current estimates suggest unless the Navy reduces the number of ships it plans to buy. Given Canada’s recent defense budget cuts, a reduction in the number of ships appears to be the more likely outcome.
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