Statement by the Department of National Defence on the Parliamentary Budget Officer’s Report on the Canadian Surface Combatant
June 21, 2019 – Ottawa (Ontario) – National Defence / Canadian Armed Forces
The Department of National Defence (DND) welcomes the report of the Parliamentary Budget Officer (PBO) on the Canadian Surface Combatant (CSC).
As the PBO uses similar tools to our own analysts, their report represents a valuable and independent corroboration of our work. Since selecting a design for the CSC earlier this year, we have recalculated our cost estimates based on certain weapons and support systems which are now known to be part of the CSC design.
After an initial review of the PBO report, we find that the vast majority of the difference comes from their decision to include taxes in their costing. DND’s practice is to not include taxes in our budget or cost estimates because DND is not required to request funding for taxes from Parliament. Essentially taxes flow immediately back into federal coffers at no cost to Canadian taxpayers.
If you remove taxes from the PBO’s costing, our estimates are within 10% of each other. This variation is normal and expected when comparing independent cost estimates on a complex multi-decade project. Cost estimates from other allied navies building ships based on the Type 26 design are also within a similar range, which helps to validate our approach.
In conclusion, while we remain confident in our estimate of $56 to $60 billion for the CSC project budget, we also recognize that even small differences in a project of this size represent hundreds of millions of dollars of taxpayer money. As we work to finalize the CSC’s design, we remain focused on ensuring we provide the right ships to the Royal Canadian Navy at the right price for Canadian taxpayers.
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Office of the Minister of National Defence
Department of National Defence
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