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Seven years after announcing a plan to buy Arctic patrol ships for the navy, the Conservative government announced Friday it has signed a contract guaranteeing delivery of five of the vessels, with the possibility of a sixth, if the shipyard can pull it off.

The announcement put an end — finally — to the pretext the government could buy as many as eight ships within the $3.1-billion budget set in 2007 for the Arctic/Offshore Patrol Ship program.

The questions of cost and quantity have been alive for years, and doubts about the program's ability to produce the required number of vessels without blowing the budget have featured in reports by the Parliamentary Budget Officer and the auditor general.

• Irving reaches shipbuilding deal with federal government

Friday, the government effectively bowed to those criticisms, announcing the program's $3.1-billion cap had recently been expanded to $3.5-billion to ensure a cash buffer for at least five, if not six, ships.

At a technical briefing, a senior government official said the contract marked a milestone in the government's high-stakes, $35-billion National Shipbuilding Procurement Strategy.

Rebuilding industry to rebuild the fleet

The strategy was launched in 2010 as a co-operative program with industry to provide access to qualified Canadian shipbuilding in rebuilding the fleet.

The government says it will create 15,000 jobs over 30 years.

The program includes new supply ships and warships for the navy, new patrol vessels and an icebreaker for the Coast Guard, and the Arctic/Offshore Patrol Ships to be built by Irving Shipbuilding in Halifax.

Observers have paid close attention to this program, seeing it as a barometer of success for the government's strategy.