Winnipeg Free Press - PRINT EDITION

Canada's $100-B fleet

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It will cost Canadians more than $100 billion to build, operate and maintain 25 naval ships over 30 years, a price tag that will send some taxpayers into sticker shock.

Before heartbeats quicken, it's important to parse a few facts.

The capital cost of the ships, including coast guard and Arctic patrol vessels, is roughly $33 billion, a reasonable price for building a new navy that will serve Canada's defence needs for three decades.

Any fleet will have operating and maintenance costs, so unless the country was planning to get out of the naval business, they aren't really relevant. Sailors have to be paid, fuel purchased, engines repaired.

An alternative that was ignored, however, was the opportunity to purchase the same or similar vessels from other countries at much lower prices.

As military historian and analyst Jack Granatstein said on these pages recently, the federal government automatically increased the cost of acquiring new ships by deciding to award the building contracts to firms in B.C. and Halifax. The goal, apparently, was to rebuild the country's shipbuilding industry, create 15,000 jobs and stimulate the economy.

There's no evidence the government ever considered offshore alternatives, which several European countries have done, saving billions of dollars.

Canada, for example, plans to spend about $3 billion on two cargo-replenishment vessels, but Great Britain purchased four similar ships from South Korea for a total price of under $1 billion. Other NATO allies have been buying ships from Poland and Romania at a fraction of the price Canada is paying.

The justification for buying Canadian goods might be valid if the price differences were marginal, but Granatstein said that is not the case.

Auditor general Michael Ferguson is to report this month on the government's shipbuilding procurement strategy, but hopefully he will do more than merely report whether Ottawa accurately reported the life-cycle costs. The Harper government was pilloried for skewing those figures for the CF-18 replacement program and for not considering alternatives to the F-35 warplane.

It is not too late to reverse course and consider the options, although the building program is already so delayed, some ships will not arrive until long after they are needed.

The public deserves to know all the facts, particularly from a government that claims to be focused on delivering value for money.

Editorials are the consensus view of the Winnipeg Free Press’ editorial board, comprising Catherine Mitchell, David O’Brien, Shannon Sampert, and Paul Samyn.

Republished from the Winnipeg Free Press print edition November 15, 2013 A12

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