By Christian Paas-Lang
Canada's 15 new warships will cost almost $70 billion over the next quarter-century, according to Parliament's budget watchdog, and the cost could change further depending on the final design of the ships and when they actually get built.
The estimate, released in a report by the parliamentary budget office Friday, is up substantially from a Canadian government estimate in 2017 that pegged the price of the project at between $56 billion and $60 billion. The 2017 estimate was itself a revision of the project's original $26-billion price tag.
Also in 2017, the PBO estimated the total cost of the ships to be $61.8 billion, but its report released Friday updates that to reflect the design of the ships — frigates known as “Type 26” — which wasn't known at the time. It also accounts for delays in the project.
The Canadian government will now pay out $69.8 billion over 26 years, the PBO estimates.
In a statement released shortly after the PBO report, the Department of National Defence said it remained “confident” in its 2017 estimate, and that the “vast majority” of the difference between the estimates came from the PBO's choice to include taxes in its projections.
Taking away taxes brings the two estimates to within 10 per cent of each other, the DND said.
But the department conceded that any small difference means hundreds of millions of dollars in costs for taxpayers.
The PBO report says the difference in the estimates is due to a later start date for construction and a heavier ship design.
The report assumes ships will start being built by the 2023-2024 fiscal year, three years later than its 2017 projection. As the timeline extends into the future, costs increase due to inflation.
The PBO originally projected a displacement, or weight, of 5,400 tonnes for each ship but the Type 26 design is a heftier 6,790 tonnes per ship, an increase of more than 25 per cent.
The report also includes an analysis of what effect further significant delays would have on the project. For a one-year delay, the PBO estimates, an extra $2.2 billion will be added to the project cost, and a two-year delay would cost the government $4.5 billion.
In an interview Friday, the top bureaucrat in charge of procurement at the DND expressed skepticism that the heavier ships will result in as much increased cost as the PBO suggests, but he did say the potential for delays was something he is “watching more carefully.”
“The labour piece is always where uncertainty can remain,” said Pat Finn, the department's associate deputy minister for material, noting labour can make up around 40 per cent of the cost of a ship.
Finn said the DND is in the “same place” as the PBO on the cost of “slippage” — delays in the project — but that he is confident the structure of the National Shipbuilding Strategy will mean the project could benefit from a skilled workforce and ongoing expertise.
The purchase of additional Arctic patrol ships, announced last month, means there will not be a lapse in efficiency at Irving's Halifax shipyard, which is building the warships, Finn said.
He set a goal for start of construction earlier than the PBO assumes in its report.
“We would say between mid-2022 and mid-2023, we're in-contract and cutting steel,” Finn said.
Potential delays would certainly increase costs, and it would be “absolutely no shock if there was additional delays,” said Dave Perry, a procurement expert with the Canadian Global Affairs Institute.
“To this point in time, the government has not been able to meet any of the timelines that have been put forward publicly,” he added.
Still, the closer you get to construction, Perry said, the less uncertainty there should be about costs and the potential for further delay.
The last thing that might change the final cost of the ships is the specifics of what components are chosen to fill out the design — which radar equipment, for example, Perry said.
The DND is deciding on those components as it reconciles the requirements of the ships with costs.
“You could potentially get a few-percentage-point swing” in price in either direction based on those choices, said Perry.
“But if you're talking about several tens of billions of dollars, a few-percentage-points swing is real money.”
13 avril 2021 | Local, Aérospatial, Naval, Terrestre, C4ISR, Sécurité
S'il existe un récif sur lequel le gouvernement fédéral s'échoue continuellement depuis des décennies, c'est bien celui de l'approvisionnement militaire. Aux prises avec des décisions aux conséquences financières considérables, les gouvernements tergiversent, souvent plombés par des enjeux politiques et par l'influence des militaires.
22 avril 2021 | Local, Aérospatial
Faits saillants : • Quatre entreprises canadiennes de l'aérospatiale se joignent à l'équipe • Ces entreprises offrent leur expertise en ingénierie, en logistique, en formation et simulation, ainsi qu'en gestion de mission • La base de fournisseurs de l'équipe emploie plus de 18 000 Canadiens. MIRABEL, Québec, le 22 avril 2021 – Quatre entreprises canadiennes se sont jointes à l'équipe Team Artemis, renforçant ainsi son expertise et ses capacités pour soutenir le programme de systèmes d'aéronefs télépilotés (SATP) de l'Aviation royale canadienne (ARC). Airbus Defence and Space Canada, située en Ontario, se joint aux entreprises albertaines ATCO Frontec, Canadian UAVs et Lockheed Martin CDL Systems en tant que membres de l'équipe Team Artemis, dirigée par L3Harris Technologies, une entreprise novatrice du secteur des technologies, et Israel Aerospace Industries (IAI), un chef de file mondial dans le développement de systèmes d'aéronef sans pilote (UAS). Ces nouveaux membres apportent leur expertise en ingénierie aéronautique, en logistique du déploiement, en formation et simulation et en gestion de mission. Ils se veulent un complément aux membres de l'équipe qui fournissent des composants canadiens essentiels : la tourelle électro-optique/infrarouge (EO/IR) de la série WESCAM MX de L3Harris et le moteur PT6A de Pratt & Whitney Canada, au Québec. L3Harris, dont les opérations canadiennes se déroulent dans 14 sites et 6 provinces, est l'entrepreneur principal et assurera l'intégration du C4ISR pour la plateforme, ainsi que l'ensemble des activités de soutien en service pour la durée prévue du contrat, soit de plus de 25 ans. La base de fournisseurs de l'équipe Team Artemis emploie plus de 18 000 Canadiens, génère des revenus de 11 milliards de dollars et pratique ses activités d'un océan à l'autre. « L'ajout de ces entreprises bien établies, à la fois novatrices et hautement qualifiées, consolide davantage notre position pour offrir à l'ARC la meilleure solution pour répondre à ses besoins en matière de SATP », a déclaré Ugo Paniconi, directeur général de L3Harris, à Mirabel. « Notre équipe offrira une solution éprouvée et rentable, qui comprendra un contenu industriel canadien à la fois important et durable, ce qui se traduit par du travail et des emplois importants à travers le pays. » L'équipe Team Artemis propose l'UAS Artemis, basé sur l'UAS Heron TP de IAI, mais conçu de façon unique afin de respecter les spécifications canadiennes. Le Heron TP est en service depuis plus de 10 ans au sein de la Force aérienne israélienne et a été sélectionné par les Forces armées allemandes. Il s'agit du seul système éprouvé au combat qui satisfait aux exigences opérationnelles rigoureuses de l'ARC. Le gouvernement du Canada prévoit acquérir un système SATP pour mieux répondre à ses besoins en matière de défense. Le SATP sera intégré à un réseau de systèmes de renseignement, surveillance et reconnaissance afin de permettre une circulation d'information en temps quasi réel, laquelle est essentielle aux opérations de l'ARC. L3Harris a été choisie comme soumissionnaire qualifié à la fin de mai 2019. La demande de propositions devrait être publiée plus tard cette année, le contrat sera attribué en 2022 ou 2023 et la livraison du premier système est prévue en 2024 ou 2025. L3Harris est l'une des entreprises en défense et en sécurité des plus importantes et des plus diversifiées au Canada et emploie plus de 2 300 Canadiens. Pour en apprendre davantage, visitez le site TeamArtemis.ca. Déclarations prospectives Le présent communiqué de presse contient des déclarations prospectives fondées sur des attentes, des hypothèses et des estimations actuelles de la direction relatives au rendement et à la conjoncture économique futurs. Ces déclarations sont énoncées sous réserve des règles d'exonération (safe harbor provisions) prévues à l'article 27A de la Securities Act, loi américaine de 1933 et à l'article 21E de la Securities Exchange Act, loi américaine de 1934. L'entreprise met en garde les investisseurs du fait que toute déclaration prospective est soumise à des risques et à des incertitudes, si bien que les résultats réels et futurs sont susceptibles de différer de façon significative de ceux exprimés ou sous-entendus dans ces déclarations prospectives. Les énoncés concernant les capacités du système, la valeur ou la valeur prévue des commandes, contrats ou programmes sont des déclarations prospectives soumises à des risques et à des incertitudes. L3Harris décline toute intention ou obligation de mettre à jour ou de réviser ses déclarations prospectives consécutivement à l'obtention de nouveaux renseignements ou à de nouveaux événements ou pour tout autre motif. ###
31 mai 2019 | Local, Aérospatial
OTTAWA, Ontario — As members of Team SkyGuardian Canada and supporters of the MQ-9B SkyGuardian Remotely Piloted Aircraft System (RPAS) for Canada's RPAS Project, L3 WESCAM and General Atomics Aeronautical Systems, Inc. (GA-ASI) are integrating WESCAM's MX™-20 electro-optical and infrared (EO/IR) imaging system onto the SkyGuardian RPAS, as well as the MQ-9 Reaper that is currently being operated by several NATO countries. Team SkyGuardian Canada is a coalition of Canadian companies committed to delivering the best RPAS for Canada. Field-proven, with extensive deployment, WESCAM's MX-20 is equipped with high-sensitivity multi-spectral sensors for day, low-light and nighttime missions, and offers low-risk “plug-and-play” installation. The MX-20 operates with detection and recognition capabilities at high altitudes in support of persistent surveillance missions. “Integrating capabilities from L3 WESCAM and our other Team SkyGuardian partners – CAE and MDA – provides the most capable RPAS solution and the best economic value for Canada,” said Linden Blue, CEO, GA-ASI. “The MX-20 integration on MQ-9 builds on our successful integration of the WESCAM MX-15 onto our Predator XP aircraft. Taking advantage of our close North American relationship, our companies can cooperate to provide unprecedented levels of innovation and business opportunity with our RPAS.” GA-ASI has been proactive in integrating L3 WESCAM products onto their RPAS. “Team SkyGuardian is a significant benefit to L3 WESCAM and provides more opportunities for the modular growth path of the WESCAM MX-20 as mission portfolios evolve and the battlespace continues to change on a global scale,” said Jacques Comtois, Vice President and General Manager of L3 WESCAM. “MX systems are the eyes of customers across more than 80 countries worldwide.” L3's WESCAM MX-Series has been engineered to focus on the three factors that drive maximum range: resolution, magnification and stabilization. As a result, each turret has outperformed its major competitor in every performance area, giving WESCAM the longest EO/IR target identification and designating ranges in the industry. GA-ASI is the world's leading manufacturer of RPAS and related mission systems. Team SkyGuardian Canada combines the best of Canadian industry with the world's most advanced Medium-Altitude Long-Endurance (MALE) RPAS, the MQ-9B SkyGuardian, being developed to fulfill Canada's RPAS project requirements. For more information on Team SkyGuardian, go to teamskyguardiancanada.com. High-resolution photos of MQ-9B SkyGuardian areavailable to qualified media outlets from the GA-ASI media contact list.About GA-ASI General Atomics Aeronautical Systems, Inc. (GA-ASI), an affiliate of General Atomics, is the leading designer and manufacturer of proven, reliable Remotely Piloted Aircraft (RPA) systems, radars, and electro-optic and related mission systems, including the Predator® RPA series and the Lynx® Multi-mode Radar. With more than five million flight hours, GA-ASI provides long-endurance, mission-capable aircraft with integrated sensor and data link systems required to deliver persistent flight that enables situational awareness and rapid strike. The company also produces a variety of ground control stations and sensor control/image analysis software, offers pilot training and support services, and develops meta-material antennas. For more information, visit www.ga-asi.com. Predator and Lynx are registered trademarks of General Atomics Aeronautical Systems, Inc. https://business.financialpost.com/pmn/press-releases-pmn/business-wire-news-releases-pmn/ga-asi-integrating-l3-wescams-mx-20-onto-multiple-platforms-as-part-of-team-skyguardian-canada