In a significant move for Canada’s defence sector, South Korean submarine manufacturer Hanwha Ocean has inked multiple partnership agreements with Canadian companies, including a notable pact with Algoma Steel, based in Sault Ste. Marie. The collaboration, announced on October 30, 2025, could reshape the landscape of Canada’s naval capabilities, particularly as the country seeks to modernise its submarine fleet.
A $275 Million Commitment
As part of the memorandum of understanding (MoU) with Algoma Steel, Hanwha Ocean has committed to a substantial investment of $275 million. This funding is earmarked for establishing a new structural steel beam mill in Canada, which is expected to create jobs and bolster local manufacturing. The agreement also outlines Hanwha’s intention to source steel products from Algoma for the construction and maintenance of Canada’s upcoming fleet of submarines.
This partnership is contingent upon Hanwha securing a lucrative, multi-billion-dollar contract from the Canadian government to supply the Royal Canadian Navy with up to 12 state-of-the-art submarines. The deal marks a pivotal moment in the ongoing procurement process and reflects a strategic shift towards enhancing defence capabilities through international collaboration.
Expanding Canadian Partnerships
In addition to its agreement with Algoma Steel, Hanwha Ocean has also established cooperation agreements with several other Canadian firms, including Telesat, MDA Space, Cohere, and PV Labs. These agreements were finalised during a visit by a South Korean delegation, comprised of government officials and business leaders, to Toronto. The focus of these partnerships extends beyond submarines, tapping into various sectors such as telecommunications and space technology.
This collaborative spirit aligns with Canada’s broader strategic initiative to strengthen ties with allies in the Indo-Pacific region. By working with South Korean companies, Canada aims to diversify its defence procurement and enhance its technological capabilities.
Competing Bids and Future Prospects
While Hanwha Ocean is making strides with its partnerships, it is important to note that competition in the submarine procurement process is fierce. German competitor TKMS has also been active, forming alliances with Canadian manufacturers like Quebec’s Marmen and the artificial intelligence firm Cohere. This rivalry underscores the urgency and importance of the upcoming contract, as Canada seeks not only to modernise its naval fleet but also to reinforce its industrial base.
The selection process will likely scrutinise not just the financial aspects but also the technological advancements each bidder can offer. Hanwha’s strategy of integrating local partnerships could provide a competitive edge, appealing to both economic and strategic considerations in Ottawa.
Why it Matters
The agreements between Hanwha Ocean and Canadian firms represent a crucial step in revitalising Canada’s defence infrastructure while fostering economic growth within local communities. As Canada navigates its defence procurement amid geopolitical shifts, the emphasis on collaboration with international partners like South Korea signals a proactive approach to meeting modern security challenges. This development not only promises to enhance Canada’s naval capabilities but also reinforces the nation’s commitment to building a resilient and technologically advanced defence sector, ensuring readiness for future challenges.
