The federal government is "streamlining" the multibillion-dollar project to replace the Royal Canadian Navy's aging warships by buying and modifying an off-the-shelf design, the Trudeau government announced Monday.

At a news conference at Irving Shipbuilding in Halifax, Public Services and Procurement Minister Judy Foote said the government will be able to save money and time by using existing designs.

She estimated that holding a competitive bid for an existing ship design will knock about two years off the process.

"The new approach significantly reduces the design and technical integration time," Foote said.

When the Harper government first began discussions about replacing the navy's 12 patrol frigates with 15 modern warships, the construction cost was estimated at $26.2 billion. However, internal documents and reports published last fall suggest the bill could run as high $40 billion.

'Really unrealistic number'

Foote called that $26.2-billion figure "a really unrealistic number that we have to deal with — and we will."

In terms of what it will cost to build up to 15 replacement warships for the navy's aging Iroquois and Halifax-class warships, Foote said that estimating cost savings before a request for proposals was issued would be "unfair and irresponsible."

Royal Canadian Navy personnel watches over HMCS Protecteur before it leaves CFB Esquimalt. Original projections put the cost of building 15 new vessels at $26 billion, but internal documents and reports published last fall suggest the bill could run as high $40 billion. (Chad Hipolito/Canadian Press)

Last month, Foote indicated the government would stop making public cost projections to allow for wiggle room as the project evolves.

However Kevin McCoy, president of Irving Shipbuilding, said regardless of the price, there will be a 10 per cent savings for every two-year reduction in the time it will take to build the ships.

"Two years is a long time. Shipbuilding inflation is somewhere around four to five per cent a year," he said.

"Just from the design standpoint alone — and the time, value of money — this is a significant savings for the Canadian taxpayer."

No commitment on number of frigates

While Foote wouldn't say what the minimum number of warships would be, she said Canada may be able to fill the need with fewer than the 15 expected.

Foote said construction on the first warships — or Canadian Surface Combatants — will start after the Irving-owned Halifax Shipyard finishes its six Arctic offshore patrol vessels.

The first Arctic offshore patrol ship, the Harry DeWolf, is currently under construction. Foote said she expects the shipyard to start cutting steel on the second ship later this year.