In 1987, amid the final years of the Cold War, the Canadian government embarked on an ambitious plan to build a fleet of 10 nuclear-powered submarines. The program, however, was abruptly cancelled just two years later in 1989, without a single submarine ever being constructed, much less launched. Today, Australia's AUKUS submarine project raises striking parallels, providing a timely opportunity to heed lessons from Canada's failed experiment over three decades ago.
Lessons from Canada's Costly Misadventure
One of the most prominent reasons behind the Canadian submarine program's collapse was its daunting price tag: $8 billion at the time, roughly equivalent to $19 billion today. While that may sound modest compared to the projected $45 billion per submarine cost under the AUKUS agreement, Canada ultimately concluded that the funds could be put to better use on other national priorities.
However, it wasn’t just about the cost. The Canadian project was marred by a series of internal conflicts among government departments, exacerbated by a broader economic crisis and intense public scrutiny. The secretive and rushed choice of submarine design faced sharp criticism from the Treasury, which warned that the total costs could balloon to as much as $30 billion ($70 billion in today's terms). Public support dwindled, with 71% of Canadians opposing the project by the time it was cancelled.
For Australia, the parallels are hard to ignore. With a similar mix of escalating costs, internal governmental tensions, and increasing public concern, there’s a real sense of déjà vu — but also an opportunity to avoid repeating Canada's mistakes.
The US Congressional Report: A Game-Changer?
A recent document from the U.S. Congressional Research Service, titled Navy Virginia-Class Submarine Program and AUKUS Submarine (Pillar 1) Project: Background and Issues for Congress, has added a new twist to the unfolding AUKUS story. The report outlines a three-step process for the AUKUS submarine deal: first, establishing a rotational U.S.-UK submarine force in Western Australia; second, the sale of three to five Virginia-class nuclear submarines to Australia; and third, the UK’s assistance in building an Australian AUKUS-class nuclear submarine fleet.
However, the report also suggests a potential alternative: instead of proceeding with steps two and three, it might be more beneficial for the U.S. to simply operate more of its own submarines out of Western Australia. Specifically, it proposes "procuring up to eight additional Virginia-class SSNs that would be retained in U.S. Navy service and operated out of Australia."
In essence, the report questions the value of Australia's direct involvement in building its own fleet, suggesting instead that the U.S. could achieve its strategic aims more efficiently by deploying its own submarines from Australian bases.
The Implications for Australia
This shift in U.S. thinking could have profound implications for Australia. If the second and third stages of the AUKUS plan were abandoned, it could potentially free up an estimated $400 billion — a sum that could be redirected to other national projects, such as a comprehensive housing program or a high-speed rail network along Australia’s east coast. However, the U.S. report hints at a different use for those funds: investing in "other military capabilities," like long-range missiles and bombers, to bolster both U.S. and Australian defense objectives.
Such a reallocation would effectively transform Australia into a support hub for U.S. military operations, rather than an equal partner in a shared submarine-building endeavor. The Congressional report’s failure to consider Australia’s perspective on becoming a "life support" for a U.S. submarine base underscores a fundamental asymmetry in the relationship.
A Vassal State in the Making?
The U.S. report’s framing — which exclusively considers the "potential benefits, costs, and risks" from an American viewpoint — suggests a future where Australia is relegated to the role of a subordinate, existing largely to serve U.S. strategic interests. The absence of any consideration for how this arrangement might be viewed from Canberra, or the Australian public at large, paints a stark picture of the current dynamics within the AUKUS alliance.
While Australia’s government appears content with the arrangement, it raises the question of whether due diligence has been conducted on the long-term implications of this deal. Meanwhile, the U.S. has already begun evaluating other ways to allocate the funds initially earmarked for the submarines — ways that align with its own defense priorities, with little regard for Australia’s broader national interests.
Conclusion: A Call for Clarity and Sovereignty
As Australia stands at a critical juncture in its defense policy, the lessons from Canada’s abandoned nuclear submarine program offer a cautionary tale. With the AUKUS agreement under growing scrutiny and new questions emerging about the strategic benefits, costs, and sovereignty implications, it is essential for the Australian government to transparently evaluate whether this path truly serves the nation’s best interests.
Otherwise, Australia may find itself not only repeating Canada’s mistakes, but doing so on an even grander, more costly scale.
No doubt the US Venture Capitalists and those profiting from the military industrial complex are currently laughing.
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