Mr. Chair and members of the committee, thank you for the invitation to appear before you today.
As you are aware, under the Parliament of Canada Act, I am mandated to support Parliament by providing analysis of macroeconomic and fiscal policy, to raise the quality of parliamentary debate and promote greater budget transparency and accountability.
I am pleased to be here today to present the findings of our report entitled, “The Polar Icebreaker Project: A Fiscal Analysis”, a report initiated by my office as part of our ongoing effort to provide independent insight into our government’s National Shipbuilding Strategy.
With me today I have our two analysts, who authored this report: Christopher Penney and Eskandar Elmarzougui.
The Polar Icebreaker Project calls for the acquisition of two new vessels, with a single vessel being constructed at each of Vancouver Shipyards and Chantier Davie Canada Inc., the latter pending approval of the shipyard’s inclusion as a partner in the National Shipbuilding Strategy.
At present, the government has not released an updated cost estimate on this project. The last reported estimate dates to 2013, where a cost of $1.3 billion for only one ship was cited.
Our independent analysis projects a total cost of $7.25 billion for the acquisition of two polar icebreakers, which includes project management costs of $346 million, design costs of $820 million and acquisition costs of $6.1 billion.
In terms of the construction schedule, we estimate that construction should begin on the first vessel in the 2023-24 fiscal year, with the second beginning the following year. Deliveries of these vessels should then occur in 2029-30 and 2030-31 respectively.
We estimate that if the start of construction for these two vessels is delayed by one year, total project costs would increase by $235 million, while a two-year delay in the start of construction would increase costs by a total of $472 million.
My colleagues and I would be pleased to respond to any questions you may have regarding this report or other PBO work.
Thank you.