Canada Commences Next-Generation Naval Build with Major Domestic Contract Award

Canada Commences Next-Generation Naval Build with Major Domestic Contract Award

(IN BRIEF) BAE Systems and Irving Shipbuilding Inc. have signed a CAD 8 billion contract to begin the next phase of Canada’s River‐class destroyer programme. This contract, part of the Government’s Our North, Strong and Free defence policy, covers the construction of the first three vessels and includes provisions for training, spare parts, and maintenance support. The overall cost to build and deliver these ships is estimated at around CAD 22.2 billion (excluding taxes), making this the most complex shipbuilding project in Canada since World War II. Based on the modern Type 26 design, the new vessels—named HMCS Fraser, HMCS Saint-Laurent, and HMCS Mackenzie—are intended to replace older warships and will be outfitted with advanced sensor, radar, and weapon systems. The initiative is expected to have a significant economic impact by contributing over CAD 700 million per year to the national GDP and creating or sustaining over 5,000 jobs annually between 2025 and 2039. In addition, the project includes plans for a land-based testing facility in Halifax to ensure effective support throughout the ships’ operational lifespan. Government and industry leaders alike have underscored the dual benefits of modernising Canada’s naval capabilities and revitalizing the domestic shipbuilding sector.

(PRESS RELEASE) FARNBOROUGH, 17-Mar-2025 — /EuropaWire/ — BAE Systems and Irving Shipbuilding Inc. have entered into a major contract agreement that marks the next phase in the River‐class destroyer programme for Canada. This new arrangement is a cornerstone of the Government’s initiative—Our North, Strong and Free—to equip the Royal Canadian Navy with state‐of‐the‐art warships capable of executing both maritime and joint-force operations well into the future.

Under the terms of the contract, valued at an initial CAD 8 billion over the first six years, the award covers not only the construction of the first three vessels but also the comprehensive provision of training, spare parts, and maintenance support. The entire project, estimated to reach approximately CAD 22.2 billion (excluding taxes) for the first trio of ships, stands as the most extensive and intricate shipbuilding effort undertaken in Canada since World War II.

The new warships—derived from BAE Systems’ modern Type 26 design—are set to replace the retiring capabilities of the Iroquois-class destroyers and Halifax-class frigates. Each vessel will be equipped with advanced underwater sensors, cutting-edge radar systems, and modern weaponry to perform a diverse array of missions ranging from counter-piracy and counter-terrorism to intelligence, surveillance, and humanitarian assistance. The ships will carry the names HMCS Fraser, HMCS Saint-Laurent, and HMCS Mackenzie, paying homage to Canada’s most significant waterways connecting the Pacific, Atlantic, and Arctic regions.

Government leaders emphasize that this contract not only reinforces Canada’s commitment to a robust national defence but also stimulates the domestic maritime industry. The project is forecast to inject over CAD 700 million annually into the nation’s GDP and create or sustain more than 5,000 jobs each year between 2025 and 2039. Moreover, the initiative will pave the way for long-term investments in skills, technology, and innovation within Canada’s shipbuilding sector.

“Investing in our homegrown industry means we are building not just a fleet for today, but a legacy for the future,” stated a senior government official. “This contract will empower the Navy with versatile and modern capabilities while also bolstering local economies across the nation.” Similarly, industry representatives have hailed the deal as validation of more than a decade of collaborative effort between government and industry partners, promising long-term stability and growth for Canada’s defence sector.

A supplementary land-based testing facility will also be constructed in Halifax to support the lifecycle management of these vessels, ensuring that every element—from the initial build to ongoing maintenance—is executed to the highest standard.

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Matthew Knowles
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BAE Systems PLC
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SOURCE: BAE Systems PLC