Building navy ships at home more costly than buying offshore, says PBO

OTTAWA – The parliamentary budget office suggests the country could pay a significant premium for building the navy’s new supply ships in a Canadian shipyard.

A new analysis estimates that keeping the work at home could add as much as 21 per cent to final price tag, compared with building abroad.

In an earlier report, the budget watchdog pegged the construction cost of the two joint supply ships at a minimum of $3.2 billion, but now estimates that could drop as low as $2.5 billion if the vessels were built in U.S.

Both National Defence and Public Works have challenged the budget office’s previous analysis and insist that the ships — to be built at the Seaspan yards in Vancouver — will cost $2.6 billion.

The Harper government wants the navy’s new warships and planned coast guard vessels built at home to benefit Canadian workers and industry.

The country’s shipbuilding industry has struggled to stay afloat for years and while the government has tacitly acknowledged there’s a cost to buying domestically, there has been no public discussion about how much of a premium taxpayers will have to cover.