CBC News has learned there is more trouble for Canada's fleet of used British submarines.

The Royal Canadian Navy has confirmed that HMCS Windsor – fresh from a $209 million refit – is unable to perform as expected because of a broken mission-critical diesel generator.

"We have restricted her in range of operations and her endurance," Captain Luc Cassivi, director of Canada's submarine force told CBC in an interview.

That means that the Windsor will only be able to operate in Canadian coastal waters until the diesel generator – a huge 16 cylinder engine – is removed from the submarine and replaced.

The Windsor has a second diesel generator which is still working. The diesel generators are used to charge the batteries that allow the submarine to operate under water.

Restrictions in place

A source has told CBC that the submarine's diving depth is severely restricted and the navy has been forced to withdraw the sub from planned exercises off the southern U.S. coast.

Capt. Cassivi said he is unable to provide exact details of the restrictions because they are "classified and linked to operational capabilities," but he denies that any exercises have been cancelled.

"It's an unexpected defect, and that is why we are going through the investigative process," said Capt. Cassivi.

The Halifax–based Windsor went back in the water in April, 2012 after a five-year refit designed to bring the submarine up to Canadian standards. The refit was three years behind schedule and until now, the navy has refused to say exactly how much it cost.

Capt. Cassivi confirmed to CBC that the Windsor's five-year refit totalled $209 million. The cost of removing and replacing the diesel generator is not included in the refit price.

"We have a plan for rectification as soon as the parts are available," said Capt. Cassivi.

The submarine should be hauled out of the water in Halifax in late summer and it could take a "few months" to replace the engine, he said.

One operational submarine

Canada purchased the four Victoria-class submarines in 1998 after the British navy declared them surplus. At $750 million, the deal was hailed as a bargain, and at a price far less than buying new submarines.

HMCS Victoria completed its refit last year at about the same $209 million cost as the Windsor, said Capt. Cassivi.

HMCS Chicoutimi's refit is more complicated and expensive because of damage done to the submarine by a fire that killed one sailor on the boat's first voyage under a Canadian flag. The Chicoutimi has been sidelined ever since the 2004 fire but may become operational by the end of the year.

Also, the refit to HMCS Corner Brook is expected to exceed the $200 million-plus price tag because of damage done to the sub's bow when it slammed into the seafloor off British Columbia. The Corner Brook has not gone to sea since its grounding in June 2011.

The unexpected repairs to the Windsor and the resulting restrictions means that the navy has only one fully operational submarine in service. The west coast-based HMCS Victoria – which was discovered to have a large dent in its hull after delivery – is the only submarine capable of firing torpedoes, unrestricted diving and movement.