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Taxpayers shouldn't accept the latest military procurement fiasco

Author: Aaron Wudrick 2021/03/09

In the highly competitive field of federal government waste there’s one area of futility that stands head and shoulders above all others: military procurement.

Ottawa hasn't been able to provide our beleaguered troops with pistols to replace relics from the Second World War. The ongoing saga of securing replacement jets for our fleet of 40-year-old CF-18s remains unresolved. Even something as relatively simply as naval supply ships may see taxpayers pay billions more than necessary.

With a track record like this, it’s no surprise to anyone that a recent report from the Parliamentary Budget Office (PBO) concluded that the Canadian Surface Combatant (CSC) program to build fifteen ships for our navy will at minimum cost an eye-watering $77 billion even though there are cheaper alternatives on the table.

The condensed history of the CSC is essentially exactly what you’d think: delay and ballooning costs. In 2008, when the program was initiated by the Harper government the original budget was projected to be $26.2 billion. By 2017, a PBO study pegged it at a shade under $62 billion.

All this, for a program that won’t even see the first ship delivered until 2030. At the rate costs projections keep rising, are we looking at cracking $100 billion?

And who, precisely, will be held accountable for a procurement fiasco that has seen the cost to taxpayers already triple, before the first keel is even laid down and nearly a decade before any actual deliveries? The Department of National Defense is unable to say when things went off track. Perhaps Irving Shipbuilding, the contractor chosen to execute the CSC program and helped select the ship design (while anticipating that the first ship would be delivered in the “mid 2020s”) would care to explain the yawning gap between the program’s original $26 billion budget and the most recent $77 billion PBO figure?

If there's any good news at all in this mess, it’s that the PBO examined some alternatives: Two other types of ship, the FREMM design used by the United States and the Type 31e design that will be used by the Royal Navy in the United Kingdom. Either of these ships would be cheaper than the Type 26 design currently contemplated by the CSC, with the Type 31e design in particular only costing between $27 to 37 billion to build.

More to the point, with government after government having bungled military procurement so badly, at what point will they try something different – such as actually punishing contractors who can’t deliver on their promises? After all, if Irving can’t build the ships at the promised priced, there are other Canadians shipyards. And if no one in Canada can do it on time and on budget, the government should not hesitate to get them built abroad instead. Failure – especially failure that costs taxpayers tens of billions of dollars – needs to come with real consequences.

Enough is enough. Canadian taxpayers can’t continue to be bled dry while our navy remains marooned at the dock. The Trudeau government needs to put its foot down, scrap the existing CSC program, and start over again.


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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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