As Canada gears up for one of the most significant military procurements in its history, the competition to secure a contract for 12 submarines has intensified. South Korea and Germany are making fervent final appeals, with both nations showcasing their maritime prowess in a bid to win over Ottawa. Prime Minister Mark Carney anticipates a decision by the end of June 2026, as the stakes rise in a procurement process projected to be worth between $60 billion and $120 billion over the entire lifecycle of the submarines.
The Contenders: Hanwha Ocean vs. TKMS
With the race narrowing to two strong contenders, South Korea’s Hanwha Ocean has put forth the KSS-III Batch-II submarine, while Germany’s ThyssenKrupp Marine Systems (TKMS) is offering the 212CD, part of a collaborative project with Norway. Both vessels are diesel-electric submarines, which are renowned for their stealth capabilities and operational endurance.
The South Korean navy’s Dosan Ahn Changho, a KSS-III submarine, has already set sail from Jinhae Naval Base, en route to Canadian Forces Base Esquimalt, where it is expected to arrive by late May. This submarine will participate in a joint naval exercise with Canada in June, showcasing its capabilities and fostering ties between the two nations’ naval forces. In a notable gesture, the submarine recently picked up two Royal Canadian Navy submariners during a stop in Hawaii, further solidifying the burgeoning military relationship.
Economic Partnerships and Strategic Interests
The decision regarding Canada’s new submarines transcends mere defence considerations; it is deeply entwined with foreign policy. Prime Minister Carney is keen to strengthen trade and diplomatic relations with both Europe and Asia, partly as a counterbalance to the fluctuating dynamics of its relationship with the United States. This procurement will not only enhance Canada’s military capabilities but also forge a long-lasting economic partnership with the winning bidder, likely extending for nearly 70 years.
Germany’s Defence Minister Boris Pistorius is scheduled to visit Canada in late May for the CANSEC defence trade show, coinciding with a previous visit from Vice-Chancellor Lars Klingbeil, who has been actively promoting the TKMS bid. Meanwhile, South Korea is reportedly dispatching a senior government delegation to Ottawa to reinforce its commitment to enhancing economic ties and potentially include high-ranking officials such as Kang Hoon-sik, Chief of Staff to President Lee Jae Myung.
Adjusting Bids to Secure the Deal
Recognising the competitive landscape, the Canadian government extended the bidding process, allowing both Hanwha and TKMS to bolster their proposals. This decision came in light of Ottawa’s dissatisfaction with the initial economic and industrial benefits outlined in their bids. Hanwha Ocean has since increased its promised economic contributions to Canada from over $60 billion to approximately $70 billion, pledging to establish manufacturing capabilities for military and industrial vehicles within Canadian borders.
On the other hand, TKMS is banking on its established partnerships with Canadian firms, including Bombardier Inc., to present a compelling case. They argue that their proposal offers substantial value aligned with Canada’s strategic interests, particularly in enhancing national sovereignty and military capabilities. They are expected to release more details soon regarding the benefits associated with their German-Norwegian submarine project.
Transformative Potential for Canada’s Naval Capabilities
The acquisition of new submarines will mark a pivotal transformation for the Royal Canadian Navy, elevating its underwater presence significantly. Historically, Canada has been limited to second-hand submarines, with only one of its current fleet of four operational. This new procurement represents a monumental shift, as it would be the first time Canada has ordered such a substantial fleet of submarines, a move not made since the Cold War era.
While South Korea has aimed for a robust defence industry, having ranked among the top ten defence exporters globally between 2020 and 2024, its track record in submarine exports remains modest. In contrast, Germany’s TKMS boasts an extensive history of submarine sales to numerous navies around the world, bringing considerable experience to the table.
Why it Matters
The outcome of this submarine procurement process is not merely a financial transaction; it represents a strategic pivot for Canada towards a more independent and robust military posture. With geopolitical tensions rising globally, and the need for countries to bolster their defence capabilities, the choice of submarine supplier could redefine Canada’s naval capabilities for generations to come. This deal not only promises to enhance military readiness but also serves as a catalyst for economic growth, innovation, and deeper international partnerships, all of which are essential in an increasingly complex global landscape.
