Four second-hand diesel submarines the country's Liberal government bought from the British navy in 1998 for $750 million are awash in red ink and out of service for major repairs, the Canadian Broadcasting Corp. reported Friday.
They have spent almost all of their time in naval repair yards, costing Canadian taxpayers more than $1 billion, the CBC said.
Now Prime Minister Stephen Harper's government is actively considering cutting its losses on the submarines and mothballing some if not all of them, sources told CBC News.
Defense Minister Peter MacKay is hinting they might be replaced with nuclear submarines that could patrol under Arctic ice, something the existing diesel-electric subs are incapable of.
MacKay said the government is still anxious to have its submarine fleet fully operational as soon as possible, providing a "very important capability for the Canadian Forces."
"But you know, in an ideal world, I know nuclear subs are what's needed under deep water, deep ice," he said.
Critics say the history of the diesel subs suggests Canada could get by without them.
"When you look at the cost of trying to get these things seaworthy again, it just doesn't make sense," said Steven Staples, president of the Rideau Institute on defense issues.
"The fact that all four submarines are sitting tied up at a dry dock right now doesn't mean that Canada is in any great danger. It makes no difference to our security."
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