Canada has selected German shipbuilder ThyssenKrupp Marine Systems (TKMS) as the preferred partner to build its new fleet of submarines, Prime Minister Mark Carney announced in Halifax on Monday. The procurement, which aims to replace the aging Victoria-class fleet with up to 12 new vessels, is expected to be the largest defence program in Canadian history, with potential costs reaching $100 billion including long-term maintenance.
Why the government chose the German-Norwegian bid
The federal government opted for the joint German-Norwegian proposal over the competing bid from South Korea’s Hanwha Ocean. Prime Minister Carney stated that the decision followed a “difficult, close” evaluation where both platforms met the Royal Canadian Navy’s requirements. According to the Prime Minister, the selection process focused on securing the best platform to meet Canada’s combined strategic, security, and economic interests.
While no final price tag was confirmed, a senior federal official indicated that contract negotiations are expected to conclude by next year. The government retains the right to pivot to Hanwha’s KSS-III, which remains the designated reserve supplier, should negotiations with TKMS fail to reach a successful conclusion.
The original proposal from TKMS aimed to deliver four submarines to Canada by 2036, but federal officials suggested on Monday that this timeline could potentially be accelerated to 2034.
What the submarine deal means for Canada
The procurement is intended to address the navy’s need for a modern, right-sized fleet for the first time in generations. Defence analyst Dave Perry, president of the Canadian Global Affairs Institute, noted that the move signals a shift in the government’s approach to military equipment, describing the pace of the procurement as “astonishing” for a project of this scale.
Beyond naval capacity, Prime Minister Carney emphasized the project’s role in building Canadian industrial capacity. The government expects the deal to generate “tens of billions in investment” that will impact every region of the country, fulfilling a campaign promise to reform chronic issues within the national defence procurement system.
The selection of a European partner carries significant geostrategic weight. By aligning with Germany and Norway, Canada is strengthening ties with European NATO allies at a time when the alliance faces pressure to bolster military capabilities. However, this shift away from an Indo-Pacific supplier may complicate Canada’s stated diplomatic ambitions in Asia, as noted by former diplomat and soldier Marius Grinius, who argued that the decision risks sidelining potential long-term economic and security interests in the region.
What happens next in the procurement process
The federal government will now enter a multi-month negotiation phase with TKMS to finalize a contract. Prime Minister Carney has confirmed that funds for the 12-submarine fleet have already been set aside within the government’s long-term fiscal framework.
The submarine program is expected to be a primary topic during the Prime Minister’s upcoming visit to the NATO summit in Ankara, Turkey. Alongside this purchase, the government plans to propose a new defence investment bank intended to provide NATO allies with easier access to capital for the arm-making industry.
Frequently Asked Questions
How many submarines does Canada plan to buy?
The government is negotiating to procure up to 12 submarines to replace the current Victoria-class fleet.
What happens if negotiations with TKMS fail?
Canada has designated South Korea’s Hanwha Ocean as the reserve supplier and retains the right to enter negotiations with them if a deal with TKMS cannot be reached.
What is the estimated cost of the program?
While the government has not revealed an official total, the procurement cost is believed to be approximately $24 billion, with total program costs including lifetime maintenance likely to exceed $100 billion.
How do you believe the shift toward a European naval partnership will influence Canada’s future security posture in the Indo-Pacific region?
