PBO pegs the total cost of the Polar Icebreaker Project at $7.25 billion

The Parliamentary Budget Officer (PBO) today released his fiscal analysis of an independent cost estimate of the Government of Canada’s procurement of two new heavy icebreakers.

The Polar Icebreaker Project, initially launched by the Government of Canada in 2008, aims to replace the Canadian Coast Guard’s existing fleet of heavy icebreakers with two new heavy icebreakers built to modern specifications.

The last Government estimate dates to 2013, at which time the cost of procurement for one ship was estimated at $1.3 billion. The Government of Canada has not yet released an updated cost estimate.

“We estimate the total cost of the icebreaker project at $7.25 billion, inclusive of project management costs of $346 million, design costs of $820 million, and acquisition costs of $6.1 billion”, says Yves Giroux, PBO.

Based on the recent experience of the Government of Canada’s shipbuilding procurement initiatives to date, as well as competing priorities at the partner shipyards, PBO assumes that construction activities for the first of the two ships will begin within the 2023-2024 fiscal year, with the second beginning in the following fiscal year. Deliveries of these vessels are anticipated for 2029-2030 and 2030-2031, respectively.

“A sensitivity analysis suggests that delays of either one or two years in the start of the construction for both vessels at each partner shipyard would increase total project costs by $235 million or $472 million, respectively”, added Mr. Giroux.