As Canada prepares to make one of its most significant military investments in decades, the race to secure a contract for the construction of 12 submarines has intensified. South Korea and Germany are vying for this lucrative deal, with both nations ramping up their efforts to showcase their offerings. Prime Minister Mark Carney has indicated that a decision will be reached by the end of June 2026, marking a pivotal moment in the future of the Royal Canadian Navy.
The Contenders: Hanwha Ocean and TKMS
The competition has boiled down to two formidable contenders: South Korea’s Hanwha Ocean and Germany’s ThyssenKrupp Marine Systems (TKMS). Each company is proposing a diesel-electric submarine model designed to meet Canada’s specific needs. Hanwha has put forward its KSS-III Batch-II submarine, while TKMS is promoting the 212CD, a product of a collaborative German-Norwegian initiative.
To highlight its commitment, the South Korean navy’s Dosan Ahn Changho, a KSS-III submarine, set sail from Jinhae Naval Base on March 25 and is expected to dock at Canadian Forces Base Esquimalt in late May. This vessel will participate in joint naval exercises with Canada in June, cementing its presence ahead of the procurement decision.
Meanwhile, TKMS is not sitting idle. German Defence Minister Boris Pistorius is scheduled to visit Canada in late May, coinciding with the CANSEC defence trade show. This visit follows a recent trip by Germany’s Vice-Chancellor and Finance Minister Lars Klingbeil, who has been actively promoting the TKMS bid.
Economic Ties and Strategic Partnerships
The stakes extend far beyond mere military capabilities; the outcome of this procurement will have significant implications for Canada’s economic landscape. This submarine project, with a potential lifetime value estimated between $60 billion and $120 billion, is seen as a critical opportunity for enhancing Canada’s industrial base and reducing reliance on U.S. supply chains, especially in light of recent trade tensions.
In a recent adjustment to its proposal, Hanwha has pledged to increase the economic benefits to Canada from $60 billion to $70 billion, promising to build military and industrial vehicles in Canada using local resources. This move underscores the strategic importance of fostering long-term partnerships that will benefit both nations economically.
On the other hand, TKMS emphasises its existing collaborations with Canadian firms, including Bombardier Inc., and is expected to outline additional benefits in the coming weeks. The German firm asserts that its proposal not only meets Canada’s military needs but also aligns with the nation’s economic and strategic priorities.
A Transformative Military Decision
The decision regarding the submarine procurement is set against a backdrop of shifting geopolitical dynamics, as Prime Minister Carney seeks to bolster trade relations with Europe and Asia. This procurement represents a crucial step in expanding Canada’s military capabilities, representing a historic shift for the Royal Canadian Navy, which has not substantially updated its submarine fleet since the Cold War.
Currently, Canada operates four second-hand submarines, of which only one is fully operational. The introduction of 12 new submarines would mark a significant enhancement of Canada’s naval power, establishing a stronger underwater presence that has been largely absent from the Royal Canadian Navy’s capabilities.
Why it Matters
The outcome of this submarine procurement is more than just a military upgrade; it signals Canada’s strategic reorientation towards bolstering its defence ties with allies in Europe and Asia. As the nation navigates an increasingly complex global landscape, the decision will likely shape not only its military readiness but also its economic partnerships on the world stage. The bid from South Korea and Germany is emblematic of a broader ambition, as both nations seek to solidify their positions in the global defence market, with Canada at the centre of this high-stakes competition.
