Canada's biggest-ever military procurement at 'very high risk,' documents suggest

Two Canadian navy frigates in Halifax on Nov. 17, 2006. (Andrew Vaughan / CP)

Documents obtained by CTV News suggest that the Conservative government's plan to overhaul the Royal Canadian Navy with a multi-billion dollar procurement to replace frigates and destroyers may be in trouble.

According to internal documents obtained by CTV News' Mercedes Stephenson, the "Canadian Surface Combatant" program is at "very high risk" of running over budget, behind schedule, lacking skilled manpower, and producing inadequate capabilities.

The documents warn there is a risk the project, "may be unable to deliver the optimal number of ships with the capabilities necessary to meet operational requirements" and that may, in turn, lead to the navy's "inability to deliver operational effect and/or a failed procurement."

With its $26B price tag, the program is considered the "crown jewel" in the government's National Shipbuilding Procurement Strategy.

Sources tell CTV News that a fixed budget, combined with increasing costs and procurement delays, mean the navy has likely already lost one or two of the promised 15 ships.

Consequences of failing to deliver the ships on time include the potential inability to protect Canadian coastlines and engage in such international operations as tracking drug smugglers or terrorists at sea.

With files from CTV News' Mercedes Stephenson