The Polar Icebreaker Project: A Fiscal Analysis

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Communications

Quotes

• 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.

• 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.

News Release

{"id":24,"created_at":"2021-12-15T12:44:46-05:00","updated_at":"2021-12-16T08:59:07-05:00","slug":"pbo-pegs-the-total-cost-of-the-polar-icebreaker-project-at-725-billion-le-dpb-fixe-a-725-milliards-de-dollars-le-cout-total-du-projet-de-brise-glaces-polaires","title_en":"PBO pegs the total cost of the Polar Icebreaker Project at $7.25 billion","title_fr":"Le DPB fixe \u00e0 7,25 milliards de dollars le co\u00fbt total du projet de brise-glaces polaires","body_en":"The Parliamentary Budget Officer (PBO) today released his fiscal analysis of an independent cost estimate of the Government of Canada\u2019s procurement of two new heavy icebreakers.\n\nThe Polar Icebreaker Project, initially launched by the Government of Canada in 2008, aims to replace the Canadian Coast Guard\u2019s existing fleet of heavy icebreakers with two new heavy icebreakers built to modern specifications.\n\nThe 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.\n\n\u201cWe 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\u201d, says Yves Giroux, PBO.\n\nBased on the recent experience of the Government of Canada\u2019s 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.\n\n\u201cA 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\u201d, added Mr. Giroux.","body_fr":"Le directeur parlementaire du budget (DPB) a publi\u00e9 aujourd\u2019hui son analyse financi\u00e8re d\u2019une estimation ind\u00e9pendante du co\u00fbt d\u2019achat par le gouvernement du Canada de deux nouveaux brise-glaces lourds.\n\nLe projet de brise-glaces polaires, lanc\u00e9 par le gouvernement du Canada en 2008, vise \u00e0 remplacer la flotte actuelle de brise-glaces lourds de la Garde c\u00f4ti\u00e8re canadienne par deux nouveaux brise-glaces lourds construits selon des sp\u00e9cifications modernes.\n\nL\u2019estimation la plus r\u00e9cente du Gouvernement date de 2013 et portait sur l\u2019acquisition d\u2019un seul navire, dont le co\u00fbt \u00e9tait estim\u00e9 \u00e0 1,3 milliard de dollars. Le gouvernement du Canada n\u2019a pas publi\u00e9 d\u2019estimation depuis ce temps.\n\n\u00ab Nous estimons le co\u00fbt total du projet de brise-glaces \u00e0 7,25 milliards de dollars, soit des co\u00fbts de gestion de projet de 346 millions de dollars, des co\u00fbts de conception de 820 millions de dollars et des co\u00fbts d\u2019acquisition de 6,1 milliards de dollars \u00bb, a d\u00e9clar\u00e9 Yves Giroux, DPB.\n\nLes r\u00e9centes initiatives d\u2019approvisionnement en navires du gouvernement du Canada et les priorit\u00e9s concurrentes des chantiers navals partenaires portent le DPB \u00e0 croire que la construction du premier des deux navires commencera au cours de l\u2019exercice 2023-2024 et que le second navire sera mis en chantier durant l\u2019exercice suivant. La livraison de ces navires est attendue pour 2029-2030 et 2030-2031, respectivement.\n\n\u00ab Selon une analyse de sensibilit\u00e9, si le d\u00e9but de la construction des deux navires dans chacun des chantiers navals partenaires est retard\u00e9 d\u2019un an ou deux, le co\u00fbt total du projet pourrait augmenter de 235 millions de dollars ou de 472 millions de dollars, respectivement \u00bb, a ajout\u00e9 M. Giroux.","release_date":"2021-12-16T09:00:00-05:00","is_published":"2021-12-16T08:59:07-05:00","internal_id":"COM-2122-024","permalinks":{"en":{"website":"https:\/\/www.pbo-dpb.ca\/en\/blog\/news-releases--communiques-de-presse\/pbo-pegs-the-total-cost-of-the-polar-icebreaker-project-at-725-billion-le-dpb-fixe-a-725-milliards-de-dollars-le-cout-total-du-projet-de-brise-glaces-polaires"},"fr":{"website":"https:\/\/www.pbo-dpb.ca\/fr\/blog\/news-releases--communiques-de-presse\/pbo-pegs-the-total-cost-of-the-polar-icebreaker-project-at-725-billion-le-dpb-fixe-a-725-milliards-de-dollars-le-cout-total-du-projet-de-brise-glaces-polaires"}},"pivot":{"publication_id":639,"news_release_id":24}}