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Canadian Parliamentary Budget Officer predicts cost increase for Type 26 fleet

The Canadian Parliamentary Budget Officer (PBO) predicted another increase for the Royal Canadian Navy's (RCN's) next-generation surface combatant in a report released on 24 February.

“The estimated total cost of production for the Type 26 fleet is CAD77.3 billion (USD61.8 billion) in nominal dollars,” the PBO said in its report, ‘The Cost of Canada’s Surface Combatants: 2021 Update and Options Analysis’.

“Our cost estimate of the Canadian Surface Combatant (CSC) programme has increased by 11% since our 2019 report,” the PBO noted. “This is due to a combination of factors, including a significant increase in lightship weight (from 6,900 tonnes to 7,800 tonnes), and a shift in the start of construction.”

Construction costs, the PBO reported, represent most of the total acquisition costs, roughly 76%, or CAD58.6 billion (USD46.9 billion).

“Assuming a one-year delay that results in a delay of all subsequent production and begins in the 2021–22 fiscal year, PBO estimates increased costs of CAD2.3 billion (USD1.8 billion),” the PBO reported. “This increases to CAD4.8 billion (USD3.8 billion) if the delay is two years long. This assumption extends the delivery of every subsequent ship by one to two years, with delivery of the final ship in 2045–46 or 2046–47.”

The Canadian Surface Combatant is intended to replace both the current fleet of Halifax-class frigates and three decommissioned Iroquois-class destroyers with a new fleet of 15 warships, the PBO noted. Compared to the other ships of its class, the Type 26-based CSC will be relatively large with the new anticipated lightship weight of 7,800 tonnes, and a length of just over 151 m.

The RCN plans to use the ships to conduct air, surface, sub-surface, and information warfare missions simultaneously, and operate independently or as part of a larger formation.

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