Canada is in negotiations to purchase around twelve submarines from German shipbuilder ThyssenKrupp Marine Systems (TKMS), according to an announcement by Prime Minister Mark Carney. This marks the conclusion of a competitive process to replace Canada’s aging Victoria-Class fleet. Both bids, one from South Korea with Hanwha Ocean and the other from Germany and Norway with TKMS, included commitments beyond submarine procurement, focusing on substantial investments in Canada’s economy.
TKMS proposed delivering four Type 212CD submarines to the Royal Canadian Navy by 2036, with the first expected by 2034. This aligns closely with the South Korean bid, which also offered to deliver four submarines by 2035. Notably, the timing is crucial as Canada’s current fleet is due for retirement in the mid-2030s, with only one operational submarine presently.
Prime Minister Carney emphasized the significance of this defense procurement decision, highlighting that both TKMS and Hanwha platforms meet the Royal Canadian Navy’s high standards. Canada’s selection of the TKMS bid initiates negotiations for up to twelve submarines.
The deal with TKMS includes a stipulation that the value of the government’s investment must be matched by economic benefits to Canada. Carney stated that TKMS’s investments across defense and industrial sectors, such as space, munitions, autonomous technology, critical minerals, and research and development, will amount to tens of billions of dollars for the Canadian economy. This contract is expected to create over 100,000 well-paying jobs in various regions of Canada.
The German bid aligns with Canada’s economic goals, including increasing LNG production to 50 million tonnes annually by 2030. TKMS proposed constructing a maintenance facility on a Canadian coast, establishing manufacturing centers for torpedoes and anti-torpedo systems, and developing a carbon capture facility in partnership with Alberta.
Further, the TKMS platform’s interoperability with NATO forces is a key advantage, enhancing Canada’s collaboration with NATO and Europe. The submarines are optimized for Arctic waters and designed to seamlessly communicate and conduct joint missions. This agreement deepens ties with Germany and NATO, in line with previous collaborations.
The announcement, made in Halifax, suggests significant economic benefits for Canadian coasts, particularly in shipbuilding and maintenance. Carney highlighted the potential for substantial economic activity in Halifax and the West Coast, with benefits extending nationwide. The decision to opt for the German bid does not divert Canada from its Indo-Pacific strategy, and Hanwha remains the reserve supplier pending successful negotiations with TKMS.