Canadian Shipbuilding-Budgets Can Sink Warships

[DAVEBLOGGINS]

Canadian Shipbuilding-Budgets Can Sink Warships​

An opinion article from the writer only and not to be published anywhere but this forum.

Recent Parliamentary Budget Officer (PBO) and Auditor General (AG) reports into Canada’s National Shipbuilding Strategy (NSS) paint a challenging picture for a multi-decade effort to build 52 large ships for both the Royal Canadian Navy (RCN) and Canadian Coast Guard (CCG). The near consensus response from national skeptics is to “throw in the towel”, and accept that Canada will never be able to provide meaningful defence procurement strategies. “Abandoning Ship” and opting for an overseas buy and build may certainly seem tempting, but beware: modern naval shipbuilding is far more complex and expensive than meets the eye. What may seem like a bargain, rarely ever is. Instead, the decision to build a fleet at home or abroad comes with trade-offs, of which cost is just one.

Strategically, Canada is at best, a maritime middle power. Although often forgotten in central Canada, Ottawa presides over the world’s longest coastline, second largest continental shelf, and fifth largest exclusive economic zone (EEZ) containing vast sea life and seemingly unlimited natural resources. To the north, the impact of melting sea ice, a global resource hunt, and tensions between the U.S., Russia and China are transforming the Canadian Arctic into a “geopolitical quagmire”. In the North Atlantic, Russian submarine activities are at post-Cold War highs. In the Indo-Pacific region, the site of growing Canadian trade and political ties, sees a Sino-American rivalry criss-crossing the South China Sea and Taiwan Strait, all amid a regional submarine arms race, and anti-ship/Ballistic Missile Defence (BMD) build-up. It would be ideal if there were an off-the-shelf warship Canada could acquire, ready-made for naval service in such a challenging global operational environment, but this is not the case. Foreign countries build ships to meet their own operational demands. German submarines such as the Type 212CD AIP submarine are designed for short range missions in shallow Baltic and Mediterranean waters. Likewise, the British Type-26 frigate is one of several warship types being built for protecting the Royal Navy’s aircraft carriers and nuclear ballistic guided missile submarines.

Canada’s decision to adopt the Type-26 design for the CSC project envisions a more expansive and ambitious role. Meant to last for nearly 4-5 decades, the CSC will be the sole true warship for Canada well into this century. It adds new capabilities to deal with global tensions (i.e., Tomahawk cruise missiles) and replicates both Iroquois class destroyers (area air warfare-AAW) and Halifax class frigates (anti-submarine warfare-ASW) capabilities. Fitting these Canadian requirements into the British design has consumed costly time and money, but Canada is left with a CSC Type-26 frigate attuned to its needs now and in the future. The NSS’s 30-year approach of continuous shipbuilding to avoid “boom and bust” cycles may be new, but building Canadian warships, to Canadian standards and in Canadian yards is now a fact of life. Except for submarines and aircraft carriers, it has been official bi-partisan policy to build Canada’s large naval ships domestically. The desire to build local is hardly a Canadian preoccupation. All G7 nations have naval shipbuilding programs, as do smaller and mid-size allied powers.

Finally, building in Canada has other ancillary benefits. In a time of economic nationalism, domestic shipbuilding minimizes both the risk to rely on foreign supply chains and operational disruptions/costs from sending fleets overseas for major maintenance periods. The knowledge gained from building the Halifax class frigates paid off when it came to completing the equally technically challenging and costly refits here in Canada. The NSS is far from perfect, but neither are there easy or cheaper options. If we are serious about tackling international security threats, upholding global norms, advancing our Humanitarian Assistance/Disaster Relief (HA/DR) efforts, managing super-power tensions, and defending our own sovereignty, we had better be prepared to pay the price no matter what the cost.

 

[RogerRanger]

You can build the ships, you can train the crews, but you can't develop the overall technology, systems and weapons improvements. Your building ships is just that, you aren't doing entire R&D programs which cost billions and take a decade. Surely you should be able to get ships cheaper because of this? I have no idea why the Type 26 is costing so much money for Australia and Canada, I can get it for Britain as we are doing the R&D program. Sounds to me like you are being shaken down. Sure you will be getting the best ASW ship in the world and perfect for what Canada, Australia, Britain need, but it is costing too much money, meaning you then have to limit other things, limiting the strategic effect of the ships and overall navy.

 

[DAVEBLOGGINS]

You can build the ships, you can train the crews, but you can't develop the overall technology, systems and weapons improvements. Your building ships is just that, you aren't doing entire R&D programs which cost billions and take a decade. Surely you should be able to get ships cheaper because of this? I have no idea why the Type 26 is costing so much money for Australia and Canada, I can get it for Britain as we are doing the R&D program. Sounds to me like you are being shaken down. Sure you will be getting the best ASW ship in the world and perfect for what Canada, Australia, Britain need, but it is costing too much money, meaning you then have to limit other things, limiting the strategic effect of the ships and overall navy.

There is a lot of truth in what you say RogerRanger. The technology is already out there and yes, the R & D for the basic hull British BAE Type 26 has been done already. The costs of both the Hunter class and CSC Frigates have been bungled so much by both governments that it is no wonder we have fallen behind by at least 3 years. The secrecy of the CSC project by the Canadian government also has been almost criminal! There is blame to go around everywhere but the only people we have to blame for all this mess is our own government! Lockheed Martin is doing what they love to do. Make money for their shareholders and who can blame them for that. They saw Canada coming and took advantage of our inequities and delays. This project should have been done with the design phase at least a year ago and we should have been close to signing contracts by now and cutting steel by the end of this year as a minimum. Costs are almost to the point where this project might be scrapped shortly after the Election this month! We have no one to blame but ourselves. Sooooooooo sad.

 

[RogerRanger]

There is a lot of truth in what you say RogerRanger. The technology is already out there and yes, the R & D for the basic hull British BAE Type 26 has been done already. The costs of both the Hunter class and CSC Frigates have been bungled so much by both governments that it is no wonder we have fallen behind by at least 3 years. The secrecy of the CSC project by the Canadian government also has been almost criminal! There is blame to go around everywhere but the only people we have to blame for all this mess is our own government! Lockheed Martin is doing what they love to do. Make money for their shareholders and who can blame them for that. They saw Canada coming and took advantage of our inequities and delays. This project should have been done with the design phase at least a year ago and we should have been close to signing contracts by now and cutting steel by the end of this year as a minimum. Costs are almost to the point where this project might be scrapped shortly after the Election this month! We have no one to blame but ourselves. Sooooooooo sad.

Are the Conservatives for or against the program? As they seem likely to win at the moment.

You have the same problems or politicians and civil service as we do. The Type 45's are only now getting working engines and the AAW upgrades they were meant to have been built with. With that they still cost us 1.1 billion each, meaning we couldn't maintain our old force structure of 12 destroyers. So in the end with all the problems they were years too late, couldn't operate for most of the last decade and couldn't fully get the benefits of the PAAMS system and sea viper which is the best AAW system in the world. All because of the exact things you mention. So ships that should have been fully operational three years before they were, that should have had a price point of 850 million per ships, have in actuality costed 1.3 billion and haven't been operational for a decade. And do the politicians or companies get any reprimand for this, not they get billions more in contracts, they get put in the house of Lords.

I can go on through every British military problem for the last 20 years. The Astute class, the QE class, Type 26 now, the new Replenishment ships built in Korea. The Typhoon, the F-35, the Nimrod AEW, the new army fighting vehicles. It goes on and on. Along with the failure to sell our outdated or surplus equipment, we just give it away. Our military equipment doesn't belong to us, our money doesn't belong to us, it belongs to the criminal class and the deep state, and multi-national companies and their political activist representatives in our Parliaments. All the small programs which they can't make billions off are working great, like the new River class patrol ships, minesweepers. So they never want to build any of them, they want to scrap them.

Also Afghanistan get 90 billion in equipment, we could have used that money as well to build our military's. Its a disgrace.

 

[Nilgiri]

There is a lot of truth in what you say RogerRanger. The technology is already out there and yes, the R & D for the basic hull British BAE Type 26 has been done already. The costs of both the Hunter class and CSC Frigates have been bungled so much by both governments that it is no wonder we have fallen behind by at least 3 years. The secrecy of the CSC project by the Canadian government also has been almost criminal! There is blame to go around everywhere but the only people we have to blame for all this mess is our own government! Lockheed Martin is doing what they love to do. Make money for their shareholders and who can blame them for that. They saw Canada coming and took advantage of our inequities and delays. This project should have been done with the design phase at least a year ago and we should have been close to signing contracts by now and cutting steel by the end of this year as a minimum. Costs are almost to the point where this project might be scrapped shortly after the Election this month! We have no one to blame but ourselves. Sooooooooo sad.

I warned so many about this....way back. Few listened to me. Oh well. I got so sick of the rigmarole that I just now wish the ships were built in UK and we do fitting out here maybe instead of the whole political gamesmanship with irving and LM. Would at least save us the money and get things on time, and bypass the stupid bureaucrat game.

They didn't listen to me when I gave detailed presentation to some higher-ups about importance of Bombardier QC staying Canadian for the long term. Now we have the Airbus A220....I feel gutted knowing some of the guys who put heart and soul into the project as a breakthrough for Canada.

They just dont listen as they have already made up their minds....theres just too much money and politics and blame to be made in delays and cost escalations. Rock paper scissors and see who wins a round, and who wins next round.

Lot of them nod heads and say "definitely" "sounds good" "good idea!" "i'll take it up" when its facetime ....then months later they aren't anywhere to be found when the usual stuff happens anyway.

Canada sorely needs technocratic joint working groups between political parties for crucial things like defence + strategic industry (given the long term nature and importance). It is another thing I keep suggesting when I find someone that could maybe shift things that way.

But I doubt it will ever happen. I'll just fight the good fight and try my best regardless....hope all else keep trying too.

 

[RogerRanger]

What the hell. Just looked at the numbers. The Australians are paying 2 billion pounds per unit and the Canadians 3 billion per unit? WTF? The entire Zumwalt program including R&D was 3.3 billion per ship and only three were built? This is just some sort of spiv thing right? That can't be real? I thought you were just paying similar to the UK and I thought we were over paying. Words can't describe this sort of swindle. People need to be jailed for this and the money claimed back from the multi-nationals.

 

[Nilgiri]

What the hell. Just looked at the numbers. The Australians are paying 2 billion pounds per unit and the Canadians 3 billion per unit? WTF? The entire Zumwalt program including R&D was 3.3 billion per ship and only three were built? This is just some sort of spiv thing right? That can't be real? I thought you were just paying similar to the UK and I thought we were over paying. Words can't describe this sort of swindle. People need to be jailed for this and the money claimed back from the multi-nationals.

It boils down to Irving's connections within Canadian political elite (in this case).

Bargaining power is all skewed/screwed from the get go. Tenders and competitions are just mostly fancy dress up opportunity....all shakes out the same way in end.

I'll stop there....it just angers me....there is corruption at deep level and national defence is just a sideshow game outside of it.

Canada, Australia etc need actual sound look at what the industrial fortitude is for a span of 50 years, what is best done in UK, US etc (given what the shipyard economies of scale are there)....and what is best done here....and where our competitive strengths fundamentally are...so that everything is done optimal as can be (for maximizing platform potency, inherent capability invested and cost/time efficiency)

But it needs a number of elitist shackles to first be broken and transcended (in the political domain). They are stuck fast and hard sadly. The plebs get stuck with the bill (and the big delay gaps in security)....they just have to cough it up.

Elitists have modelled all the red lines to a T now....they know just how much the plebs can take with little real fuss.

 

[RogerRanger]

It boils down to Irving's connections within Canadian political elite (in this case).

Bargaining power is all skewed/screwed from the get go. Tenders and competitions are just mostly fancy dress up opportunity....all shakes out the same way in end.

I'll stop there....it just angers me....there is corruption at deep level and national defence is just a sideshow game outside of it.

Canada, Australia etc need actual sound look at what the industrial fortitude is for a span of 50 years, what is best done in UK, US etc (given what the shipyard economies of scale are there)....and what is best done here....and where our competitive strengths fundamentally are...so that everything is done optimal as can be (for maximizing platform potency, inherent capability invested and cost/time efficiency)

But it needs a number of elitist shackles to first be broken and transcended (in the political domain). They are stuck fast and hard sadly. The plebs get stuck with the bill (and the big delay gaps in security)....they just have to cough it up.

Elitists have modelled all the red lines to a T now....they know just how much the plebs can take with little real fuss.

I agree with you. In my view Canada and Australia should be working to fill the gaps in the American and British navies, rather than building their own capabilities. Do the Australians really need LHA's and AAW destroyers? Or do they need more smaller SSK's, corvettes, missile boats and long-range patrol boats? The same goes for Canada. Though I do think you and Australia need new type 26 capabilities. Maybe not in the numbers and certainly not that price. Only the British/Americans/Canadians/Australia put up with these cost overruns, the English civilization is being plundered by the criminal class. The British built a 65,000 ton carrier for the same price as the Canadians are meant to be paying. I am shocked honestly.

 

[DAVEBLOGGINS]

What the hell. Just looked at the numbers. The Australians are paying 2 billion pounds per unit and the Canadians 3 billion per unit? WTF? The entire Zumwalt program including R&D was 3.3 billion per ship and only three were built? This is just some sort of spiv thing right? That can't be real? I thought you were just paying similar to the UK and I thought we were over paying. Words can't describe this sort of swindle. People need to be jailed for this and the money claimed back from the multi-nationals.

Totally agree RogerRanger!

 

[DAVEBLOGGINS]

I agree with you. In my view Canada and Australia should be working to fill the gaps in the American and British navies, rather than building their own capabilities. Do the Australians really need LHA's and AAW destroyers? Or do they need more smaller SSK's, corvettes, missile boats and long-range patrol boats? The same goes for Canada. Though I do think you and Australia need new type 26 capabilities. Maybe not in the numbers and certainly not that price. Only the British/Americans/Canadians/Australia put up with these cost overruns, the English civilization is being plundered by the criminal class. The British built a 65,000 ton carrier for the same price as the Canadians are meant to be paying. I am shocked honestly.

Again, totally agree with you. Perhaps something good will come of all of this after the 20 Sep 2021 (Perhaps a "new" government perspective would help-maybe not! Same s$#t-different gov!!

 

[Mis_TR_Like]

I agree with you. In my view Canada and Australia should be working to fill the gaps in the American and British navies, rather than building their own capabilities. Do the Australians really need LHA's and AAW destroyers? Or do they need more smaller SSK's, corvettes, missile boats and long-range patrol boats? The same goes for Canada. Though I do think you and Australia need new type 26 capabilities. Maybe not in the numbers and certainly not that price. Only the British/Americans/Canadians/Australia put up with these cost overruns, the English civilization is being plundered by the criminal class. The British built a 65,000 ton carrier for the same price as the Canadians are meant to be paying. I am shocked honestly.

I cannot fathom why we have 2 LHDs with ski jumps, yet no F-35Bs. It makes no sense at all.

I can understand why Australia isn't going all out on a fleet of smaller vessels. We are surrounded by open ocean on all sides, therefore decision-makers automatically think bigger = safer/longer range/better. But lets be real, tiny vessels armed with long range anti-ship missiles are the future. We should consider using our two LHDs as command/mother ships for USVs (unmanned surface vessels). This will allow us to deploy and operate them far away from our shores. We really need to step things up instead of half-assedly trying to copy the USN and RN.

 

[RogerRanger]

I cannot fathom why we have 2 LHDs with ski jumps, yet no F-35Bs. It makes no sense at all.

I can understand why Australia isn't going all out on a fleet of smaller vessels. We are surrounded by open ocean on all sides, therefore decision-makers automatically think bigger = safer/longer range/better. But lets be real, tiny vessels armed with long range anti-ship missiles are the future. We should consider using our two LHDs as command/mother ships for USVs (unmanned surface vessels). This will allow us to deploy and operate them far away from our shores. We really need to step things up instead of half-assedly trying to copy the USN and RN.

I have actually designed an Australian navy on an excel doc.

Main thing for me is you need a large patrol fleet. With long-range patrol, coast patrol, (fast patrol and interceptors which can be armed with ASuW missiles and torpedo's. And I am not talking about heavy missiles, I am talking about light ASuW missiles. Like the British did to the Argentine corvette on South Georgia. So you stay in inlets, you hide in ports and come out fast and hit enemy ships and move away again. Modern ships are more vulnerable in ports and inlets because they can't see what's coming and don't have the range. You don't need frigates most of the time, you just need larger patrol boats in greater numbers.

The other thing is the need for what I call an escort corvette, which can escort merchant shipping and conduct ASW and ASuW. This is something the British/American navies totally lack now. Again you need to build them in greater numbers for them to have the strategic effect. I also like the idea of helicopter destroyers for the Australians as well, which the Japanese have been using for decades. Rather than using the bigger helicopter carriers. Missiles sloops, or ocean going missile boats, minesweepers. Also smaller SSK's as well.

Then after that's all setup and working, you can build out into LHAs, AAW frigates, ASW frigates, Long-range SSK's which are hard to build and cost a lot of money. Start small think big. Rather the Australian government has just skipped the patrol and tactical navy, directly to the strategic level. Meaning they don't have the support navy they need for long-range or power projection naval operations. If your strategic fleet is defeated, you have nothing to defend Australia with.

They are building navies from the top down, rather than bottom up. If you build top down, you have massive projects which cost billions and in the end can't give you the numbers you need. If you build bottom up, you build up the numbers you need to then enable you to project power. However those projects aren't 'legacy projects' which make the headlines and pock people millions in bribes and cost overruns. Look at how the Chinese have done it, they have built from the bottom up, they could have easy started work on a carrier without the Russians, but instead they took their time.

The Australian government views itself as the major power in the Southern Pacific region, so it builds capabilities to fit that bill. However it doesn't have the bottom up capabilities to enable that sort of defence posture. For example, you don't have an integrated air defeance network. So you expect to project power with the air force and navy, without the assets to project Australians air space. And building an integrated air defence network is much cheaper than buy the latest fighter-jets, but its don't make a splash. These are all the same issues Britain/American/Canada/New Zealand have. If you look at what the Russians and Chinese are doing, its much cheaper and means we are denied access to operate in their waters and air space. They have freedom to operate in our waters/air space because we don't have the capabilities to stop them.

 

[Ted Barnes]

If we wanted cheaper warships then we would of bought offshore, although that is not always the case. Most countries at least the larger ones have their own domestic warship shipbuilding along the lines of each navies particular wants and needs. The type 26, Australian and Canadian variants are very different from each other internally so while the hull is similar with some of the propulsion aspects Canada is building the most capable of all three variants and of course that comes with a cost and a premium when building domestically. There are lots of reports on why these ships are so expensive or the perception that they are. We cost everything very differently than the USA, UK or AUS, hell we even include tax into the price.

Canada knew full well the cost of domestic shipbuilding in Canada with pre chosen yards. These yards are not doing this for national pride, they are doing it to make maximum, guaranteed profit. The CSC is the do all frigate, decided by the government that these would do the same as the others with no different AAW or ASW variants. These ships will be built because A. We have already have weapon systems and equipment being built for the first flight of ships and B. There is no backup plan. Any change in government is not going to change anything because the project is across party line and why do you think it hasn't become an election issue?

 

[Nilgiri]

Oh we will definitely be getting three initial.

I'm just not optimistic we are going to be getting the full 15.

 

[Ted Barnes]

Oh we will definitely be getting three initial.

I'm just not optimistic we are going to be getting the full 15.

I think your wrong. The project is spread out over many years and so is the cost which makes it easier to accept and we need ships. Way harder to pivot and start an additional class. The RCN does not want an additional class of warship not to mention the years it will add to a already long procurement. Now of course if the type 26 turns out to be a lemon then perhaps your scenario will come to be. People need to accept we are all in on this.

 

[Nilgiri]

We will see, I hope I am wrong for what its worth.

The thing is the escalation of the cost and the delays that are driving it that are quite concerning.

 

[Ted Barnes]

We will see, I hope I am wrong for what its worth.

The thing is the escalation of the cost and the delays that are driving it that are quite concerning.

I don't understand why people are so shocked at the cost overruns and delays. Rarely a warship procurement goes as planned and that's from companies way larger and more experienced than little Irving. We are building arguably the largest and most capable warship by a yard that hasn't built a warship in two decades. Coupled with that the government of Canada prioritized the Arctic and Offshore Patrol ships to built first, the cost was certainly was going to increase each year we didn't build it unless we settled for a lesser design.

 

[DAVEBLOGGINS]

I think your wrong. The project is spread out over many years and so is the cost which makes it easier to accept and we need ships. Way harder to pivot and start an additional class. The RCN does not want an additional class of warship not to mention the years it will add to a already long procurement. Now of course if the type 26 turns out to be a lemon then perhaps your scenario will come to be. People need to accept we are all in on this.

Totally agree Ted Barnes.

 

[DAVEBLOGGINS]

We will see, I hope I am wrong for what its worth.

The thing is the escalation of the cost and the delays that are driving it that are quite concerning.

I hope you are wrong too Nilgirl. Our Country cannot do without 15 of these "Super" Frigates as a minimum.

 

[Nilgiri]

I don't understand why people are so shocked at the cost overruns and delays. Rarely a warship procurement goes as planned and that's from companies way larger and more experienced than little Irving. We are building arguably the largest and most capable warship by a yard that hasn't built a warship in two decades. Coupled with that the government of Canada prioritized the Arctic and Offshore Patrol ships to built first, the cost was certainly was going to increase each year we didn't build it unless we settled for a lesser design.

Well we have a whole lot of time to muse upon how its going.....lets see.

Early 2030s for delivery is the current starting delivery estimate.