Costs on the massive project have more than doubled from an initial CDN$21.5 million (£10.6 million) estimate to CDN$45 million (21.7 million), prompting Prime Minister Stephen Harper to order an urgent review.
Ian Wilson, head of Library and Archives Canada, confirmed the gallery was now unlikely to open its doors until 2008. Its original opening date was 2005.
The project, won by Dixon Jones in a 2003 competition, is a joint venture with Teeple Architects and Cole + Associates (Canada). It was originally promised in 2000 by former Canadian prime minister Jean Chretien.
Dixon Jones partner Edward Jones said the project was becoming a 'political football'.
He insisted the cost hikes were linked to administrative issues and not construction related.
'The only figure we can comment on is the construction budget - this was set in 2003 to be CDN$18.5 million. Since then the budget has increased to CDN$21.5 million. Where the other $20 million is a mystery.
'The trouble is people assume CDN$21.5 million is an all in one price. It does not take account of administrative and other non-construction related issues.
'It's absolute nonsense to say the construction costs has gone over budget. This is not a Scottish parliament.
'Where the other $20 million has come from I do not know. Our fee is 3 per cent and that is split with two other architects.'
The scheme involves adapting a distinguished 1932 Neo-Beaux-Arts building near Parliament Hill - designed by Cass Gilbert in 1931 and until recently a US embassy - and constructing an additional gallery space.
The project review comes at a time when the federal government is looking to shave $2 billion from its overall expenditures. According to Wilson, the government is reviewing a raft of municipal projects, including the gallery, to achieve the cost savings.
The existing Portrait Gallery holds around 20,000 Canadian portraits collected since the 1880s by the Library and Archives Canada.