Back to news

November 9, 2020 | Local, Naval

Canada spending $650 million on U.S. missiles for new warships

David Pugliese, Ottawa Citizen, Postmedia News (

Published: Nov 06 at 10:29 a.m.

Updated: Nov 06 at 7:20 p.m.

The Canadian government is spending around $650 million to buy new missiles and launchers from the U.S. for the Royal Canadian Navy.

Canada is buying 100 Standard Missile 2 Block IIIC missiles and 100 MK 13 Vertical Launch Systems.

The total estimated cost of the purchase is $500 million U.S., according to the U.S. government, which posted details of the deal on Thursday.

The U.S. State Department announced it had approved the pending sale and Congress has also been notified. It is expected to proceed but there were no details about when the weapons would be delivered.

The missiles will be installed on the 15 Canadian Surface Combatant ships, according to the U.S.

Raytheon Missiles and Defense of Tucson, Ariz., will build the weapons.

Last year the Liberal government signed a deal that would lead to the eventual construction of 15 Canadian Surface Combatant warships in the largest single government purchase in Canadian history. A final contract, however, has not yet been signed.

Lockheed Martin offered Canada the Type 26 warship designed by BAE in the United Kingdom. Irving is the prime contractor and the vessels will be built at its east coast shipyard.

Construction of the first ship isn’t expected to begin until the early 2020s.

But the Canadian Surface Combatant program has already faced rising costs. In 2008 the then-Conservative government estimated the project would cost roughly $26 billion.

The overall project is currently estimated to cost around $60 billion.

The $60 billion price tag is now being examined by the Parliamentary Budget Officer.

That report was supposed to be delivered to the House of Commons government operations committee on Oct. 22 but has been delayed. No new date has been provided on when the report will be delivered.

“Approximately one-half of the CSC build cost is comprised of labour in the (Irving’s) Halifax yard and materials,” according to federal government documents obtained by this newspaper through the Access the Information law.

But some members of parliament as well as industry representatives have questioned whether the CSC cost is too high. There have been suggestions that Canada could dump the Type 26 design and go for a cheaper alternative since the project is still in early stages and costs to withdraw could be covered by savings from a less inexpensive ship.

In 2017 then Parliamentary Budget Officer Jean-Denis Fréchette, estimated the CSC program would cost $61.82 billion.

The entry of the BAE Type 26 warship in the Canadian competition was controversial from the start and sparked complaints the procurement process was skewed to favour that vessel. Previously the Liberal government had said only mature existing designs or designs of ships already in service with other navies would be accepted, on the grounds they could be built faster and would be less risky. Unproven designs can face challenges as problems are found once the vessel is in the water and operating.

But the criteria was changed and the government and Irving accepted the BAE design, though at the time it existed only on the drawing board. Construction began on the first Type 26 frigate in the summer of 2017 for Britain’s Royal Navy.

Copyright Postmedia Network Inc., 2020

On the same subject

  • CJOC PA Monthly Narrative

    September 14, 2018 | Local, Aerospace, Naval, Land

    CJOC PA Monthly Narrative

    {Sent on behalf of Lieutenant-Colonel Stéphanie Godin, Chief Public Affairs Officer, CJOC} We have published the  September 2018 CJOC PA Monthly Narrative.  It is designed to inform all those who play a part in explaining the Canadian Armed Forces engagements in Canada, on the continent and around the world.  This product is shared with DND/CAF colleagues and with our whole-of-government partners. It is updated and distributed on a monthly basis unless otherwise directed. New this month: On August 2, 2018, a small team of soldiers from the Canadian Army’s 4 Engineer Support Regiment deployed to Iraq on Operation IMPACT. About 300 CAF members participated in a maritime domain defence and security exercise on Operation NANOOK from August 8, 2018 to September 4, 2018. The Government of Canada accepted the province of British Columbia’s request for assistance with wildfire response on August 13, 2018. On September 7, 2018, the Province of B.C. announced that the wildfire situation improved and that the requirement for CAF assistance had diminished. Most CAF assets and members deployed on Operation LENTUS started to leave the province and return to their respective home units. About 100 personnel are still assisting with the operation. On August 15, 2018, Operation PRESENCE-Mali reached full operational capability, meaning personnel and equipment are prepared to conduct secondary tasks if the United Nations request them such as: the transportation of troops, equipment and supplies, and logistics support. About 135 personnel and five CF-18 Hornets deployed to Constanta, Romania on Operation REASSURANCE to participate in NATO enhanced Air Policing from September to December 2018. A CC-177 Globemaster aircraft conducted an airlift flight on Operation FREQUENCE between the Sahel region of Africa and France. About 29,000 kilograms of cargo were delivered to France. Follow us on social media: Twitter: Facebook:

  • Mobilisation pour le chantier Davie

    December 4, 2017 | Local, Naval

    Mobilisation pour le chantier Davie

    Il y a eu une grande mobilisation citoyenne et politique en fin de semaine pour le chantier de la Davie. Quelque 800 travailleurs pourraient être mis à pied d’ici la fin de l’année. Patrice Roy s’entretient avec Steve MacKinnon, député de Gatineau et secrétaire parlementaire de la ministre des Services publics et de l’Approvisionnement.

  • Canada: Defence Procurement Canada: Is It ‘Back To The Future' For Defence Procurement?

    January 6, 2020 | Local, Aerospace, Naval, Land, C4ISR, Security

    Canada: Defence Procurement Canada: Is It ‘Back To The Future' For Defence Procurement?

    Article by Marcia Mills and Paul Burbank Capital Perspectives Last Updated: January 3 2020   The issues surrounding defence acquisition took a backseat in the run up to the 2019 federal election. As noted by the Canadian Global Affairs Institute, this occurred despite the fact that two of the largest defence procurements in Canadian history – the Canadian Surface Combatants (warships) project and the Future Fighter Capability Program (fighter jets) – are in active procurement mode, spending is falling short of forecast and roughly 70 per cent of the approved projects under the 2017 implementation of the Strong, Secure, Engaged Defence Policy have seen schedule delays 1.   Canadian defence procurement is a many-layered affair. Spread across three departments and a central agency (the Department of National Defence; Public Procurement and Services Canada; Innovation, Science and Economic Development; and Treasury Board, respectively), the need to coordinate and align this much bureaucracy is often viewed as one of the significant problems in defence procurement.   The two main political parties offered very different solutions to these issues during the election, but provided few details.   The Platforms The Conservatives focused on the need to "de-politicize" the procurement process, which would in turn deliver greater value for money and better resources for the Canadian military. To accomplish this, new oversight mechanisms, both in Cabinet and in the Privy Council Office, would be created. 2 Major defence procurements are already subject to oversight by the Defence Procurement Secretariat, a Deputy Ministers Governance Committee and a Ministers Working Group. It is not entirely clear how additional layers of oversight would reduce delay and improve efficiencies, unless the new mechanisms replaced all or some of the current oversight layers.   The Liberal platform included a portion on defence procurement that pointed to the creation of "Defence Procurement Canada," to ensure defence projects were delivered on time and with greater transparency. The structure of Defence Procurement Canada was not explained. A bit of speculation is now in order as to what this could mean for defence procurement.   The New Cabinet The Liberals formed a minority government and announced their new Cabinet on Nov. 20. While the Ministers of Defence (Harjit Sajjan) and Innovation, Science and Economic Development (Navdeep Bains) remain the same, Treasury Board has a new President and Public Services and Procurement Canada (PSPC) has a new Minister – Jean-Yves Duclos and Anita Anand, respectively.   Treasury Board President Duclos moves from a smaller, specific portfolio within Employment and Social Development Canada to now preside over one of the federal government's most powerful central agencies and cabinet committees. He will have a considerable role in ensuring effective financial management and government spending. Minister Anand is a new face in Cabinet and a first-time Member of Parliament for the riding of Oakville, Ont. She is assuming responsibility for, amongst other things, the two single largest purchasing organizations in the federal government (PSPC and Shared Services Canada (SSC)).   Going Forward Defence procurement in Canada follows a general ebb and flow – resources are increased during times of conflict and are reduced in times of peace. Restructuring occurs in response to these influences, as well as perceived redundancies, desired efficiencies and the odd scandal or two. Various Minsters and departments have been responsible for defence procurement and production over the past 100 years, including boards or commissions set up during times of war.   A new independent department for defence procurement would result in three different departments (SSC, PSPC and the Defence Procurement Canada) managing the vast majority of federal acquisition. This approach would be similar to the stand up of the Department of Defence Production in the '50s. The DDP had a short life. Established in 1951, it was expanded to become the central purchasing organization in 1963 as an interim measure, then disbanded in 1969 with the establishment of the Department of Supply and Services. The amalgamations of various entities continued until 1993, with the creation of the Department of Public Works and Government Services (a.k.a. PSPC). PSPC operates as a central purchasing agent for the government, with exclusive authority under the Defence Production Act to acquire defence supplies for DND.   If Defence Procurement Canada is to exist as a departmental corporation or agency, the government would want to launch this new entity early in its mandate so that it can lay claim to any degree of efficiency or success achieved. If so, the new entity would likely remain within PSPC, as the Minister has existing statutory authority to create a supporting departmental corporation or agency under the Defence Production Act. Creating this entity outside of PSPC's current authority would require a significant reorganization of the public service and change to the operations of government of a magnitude greater than that required to establish Shared Services Canada – this would include deciding whether to maintain or decentralize the functions of defence procurement and defence production, as well as significant statutory amendments to provide or reduce, as required, the authority of all Ministers involved.   Ministerial mandate letters, which were released in mid-December, shed no additional light on the specific operational structure or corporate identity that Defence Procurement Canada is expected to take. Notable in these letters, however, is a prevailing theme: Minister Anand has the clear responsibility for bringing forward options to Cabinet, but that effort will be supported by a host of respected, senior ministers, including Minister Sajjan (National Defence), Minister Jordan (Fisheries & Oceans and the Canadian Coast Guard), and Minister Bains (Innovation, Science and Industry). As all of these Ministries are already involved in defence procurement, their continued support is not surprising.   Throughout the history of defence acquisition and production in Canada, large-scale reorganization has been predicated by one of three events: war, post-war reconstruction or scandal. Absent one of these triggers, a minority government may have little appetite (or be able to drum up support from any other party) to stand up a wholly new department, or even a departmental corporation or agency within PSPC itself, on the basis of efficiency and economy alone, particularly in light of the on-going Phoenix debacle and the continued issues at Shared Services Canada.   As no new Minister for Defence Procurement Canada was named in the new Cabinet nor were any Additional Ministers within PSPC named for defence or Defence Procurement Canada, it appears that, at least for now, any defence acquisition reorganization is likely to remain on the backburner.   Marcia Mills is procurement counsel with the Fasken Ottawa office and has 20+ years of private and public sector experience. She provides clients with legal and strategic advice for all aspects of government procurement, as well as advice on government policies and procurement processes. Paul Burbank is an associate with the Fasken Ottawa office. He works with the Communications Law group to provide advice on telecommunications and broadcasting in Canada. Paul also works with Fasken's Government Relations and Political Law group on strategy and compliance matters.   Footnotes 1 The Defence Procurement Outlook for Canada's 43rd Parliament by David Perry, The Global Exchange, 2019 Volume XVII, Issue III; Canadian Global Affairs Institute 2 Global News: With billions at risk, federal parties promise to fix defence, procurement

All news