A newly rebuilt HMCS Chicoutimi is set to return to Canada's naval fleet nearly 10 years after a deadly fire aboard the second-hand warship effectively crippled the Canadian navy's submarine program.

The resurrection of the British-built vessel, which became emblematic of the sorry state of Canadian military equipment in 2004, has the Department of National Defence contemplating for the first time how best to employ its controversial subs.

One internal defence proposal foresees deploying the undersea warships to far-flung oceans, patrolling trouble spots the way the navy's frigates do today.

Chicoutimi has been fully repaired and upgraded, says the navy's top commander.

It entered the water in late November after three years of work at Victoria Shipyards Co. Ltd., a return that is about two years behind the navy's original schedule.

The submarine is in the process of being turned over to the military and the crew is expected to begin sea trial in waters off Esquimalt, B.C. over the next few weeks, Vice-Admiral Mark Norman told The Canadian Press in a recent interview.

"We're on the cusp of achieving what we laid out," said Norman, who noted the original goal of the program was to have three of the navy's four submarines operational at all times.

Shallow-water restrictions

Chicoutimi will, however, be restricted to shallow-water diving for the foreseeable future, according to a series of defence documents obtained by The Canadian Press under the Access to Information Act.

It's been a long, excruciating journey since Jean Chretien's Liberal government announced in 1998 it would buy four surplus diesel-electric boats from the Royal Navy in what was heralded at the time as a great bargain for Canadian taxpayers.

The poor condition of the mothballed submarines — they were rusty, prone to flooding and one had a dented hull — tarnished the reputation of the boats. But it was the fire aboard Chicoutimi in October 2004, which killed Lt. Chris Saunders and sent two other sailors to hospital, that nearly scuttled the program entirely.

A subsequent military board of inquiry found that an open hatch allowed sea water from a rogue wave to wash down the conning tower and inundate poorly insulated high-voltage wires, triggering the fire. Still, the 700-page report blamed no one for the tragedy, which occurred off Ireland during the ship's voyage to Halifax.

Many millions spent on repairs

The initial estimate to repair the boat was pegged at $15 million in 2005. It quickly increased to $20 million in 2006, but internal documents suggest the price tag could run to more than $125 million, including removal of all fire-damaged components.

Originally commissioned as HMS Upholder, the ship has spent the bulk of its nearly 28-year existence either in dry-dock or tied up to a wharf.

HMCS Victoria is the Canadian navy's only fully operational submarine, having completed the test firing of a live torpedo. A third submarine, HMCS Windsor, is operational but has not gone through process of certification to fire its weapons and remains under dive restrictions.

HMCS Corner Brook is currently in dry-dock for life extension and repairs after slamming into the ocean floor off Vancouver Island.

Despite the trials, senior brass have been thinking ahead and want to see the subs play a meaningful role, possibly in extended deployments in waters off the world's trouble spots in much the same way the Dutch have utilized their fleet.

Former chief of defence staff, general Walt Natynczyk, directed before he retired that the navy develop a deployment plan that would "accelerate the strategic reach of the submarines."

Since the boats are slow and have limited range, Natynczyk envisioned the navy using a piggyback ship to whisk the submarines to support ongoing international operations, such as anti-piracy patrols off the Horn of Africa.

"The immense effort this has required, and the massive investment it represents, must now begin to yield a visible and defensible return on your investment," the former top commander wrote in a directive dated March 5, 2012.

Norman says the navy isn't quite ready for such an operation, but concedes it is a goal.

"We see this as a viable deployment possibility, looking into the near future," he said.

A number of factors would have to be considered, including the cost of transport, sustaining the submarine once it's on station, and the climate, since the boats were designed during the Cold War for operations in the frigid North Atlantic.

"Those boats are more comfortable in cold war than warm water," Norman said.

But it would be in Canada's national interest to conduct such far-flung patrols in addition to keeping tabs on the country's coastline, he added.

"If you can pre-position them in whatever area of strategic interest you may have, they become all that more useful."