Thank you, Mr. Chair. It's our pleasure.
Good afternoon, Mr. Chair and members of the committee.
Thank you for the invitation to appear before you today.
We are pleased to be here today to present the findings of our report entitled, “The Cost of Canada's Surface Combatants: 2021 Update and Options Analysis,” which we were honoured to prepare at the request of this committee. With me today I have our lead advisor-analysts on the report, Carleigh Malanik and Christopher Penney.
Consistent with the Parliamentary Budget Officer's legislated mandate, at the request of this committee, my office prepared an independent costing analysis of building the Canadian surface combatants with the continuation of the type 26, as well as the cost for two alternate designs, the European multi-purpose frigate, or FREMM, and the type 31e.
We estimate that a fleet of 15 type 26 ships will cost $77.3 billion, rising to $79.7 billion if there's a one-year delay in 2021-22, and $82.1 billion if there is a two-year delay. This estimate represents an increase of $7.5 billion over our previous estimate, which was provided in 2019, due to updates in the ship's specifications and production timelines.
As requested by the committee, our report also presents a cost analysis of two other ship designs: the FREMM European multi-mission frigate and the type 31e, a class of general-purpose frigate planned for the United Kingdom's Royal Navy.
The cost of acquiring 15 FREMM ships is estimated at $71.1 billion, while the cost of a fleet of 15 ships based on the type 31e design is estimated at $27.5 billion. These estimates are inclusive of cancellation costs, running a new competitive design selection process, and an additional four-year delay in the start of construction. It's important to note that these ships have different characteristics and capabilities.
Finally, our report considers a hybrid approach under which three type 26 vessels are procured, and the remaining 12 ships are competed, with either the FREMM or type 31e being selected. Under this scenario, the costs increase to $71.9 billion for the mixed FREMM fleet, and $37.5 billion for the mixed type 31e fleet.
We would be pleased to respond to any questions you may have regarding this report or other PBO work.
Thank you, Mr. Chair.