OTTAWA – Canadians will pay about 20-per-cent more to build new resupply ships for the navy than if the same vessels were built in the United States, Parliament’s budgetary watchdog says.
The federal government has set aside $2.3 billion to construct two new resupply ships in Vancouver over the coming years, part of its multi-billion-dollar shipbuilding plan.
But the Parliamentary Budget Office says not only is the money not enough to buy what the navy needs, but taxpayers will pay a premium for building the ships in Canada.
The PBO has previously estimated it will actually cost at least $3.2 billion for the ships.
Now, in a report released Wednesday, it says the same ships could be built in the U.S. for 21 per cent less, or about $2.6 billion.
The main reason is that the shipyard in Vancouver does not have much experience in building large military vessels, which means more man-hours will be needed for the project.
In contrast, the U.S. has more “ideal” conditions as it has an experienced shipbuilding industry, which means greater productivity and hence fewer hours required.
The PBO also attributes some of the difference to lower material costs in the U.S.
The government and military have previously rejected the PBO’s estimate that the new resupply ships will cost nearly $1 billion more than budgeted.
The government has also indicated it is willing to pay a higher premium for new military ships as it’s goal isn’t just new vessels, but also the establishment of a strong, viable shipbuilding strategy in Canada.
Some have argued, however, that Canada and Canadian taxpayers would be better served by outsourcing much of the basic work that goes into a ship, and instead concentrating on the high-end, high-tech aspects of shipbuilding.
Lberthiaume(at)postmedia.com
Twitter.com/leeberthiaume
