Prime Minister Mark Carney has revealed that Canada is in talks to purchase up to twelve submarines from ThyssenKrupp Marine Systems (TKMS), a German shipbuilder. This decision concludes a fierce competition to replace Canada’s aging Victoria-Class fleet of submarines. Both contenders, South Korea with Hanwha Ocean and a joint bid from Germany and Norway with TKMS, offered comprehensive packages that included not just the submarines but also significant investments in the Canadian economy.
TKMS proposed delivering four Type 212CD submarines to the Royal Canadian Navy by 2036, with the first one expected by 2034. This aligns with the retirement timeline of Canada’s existing submarines, as only one is currently operational. The selection of TKMS for the submarine procurement signifies Canada’s intent to enter negotiations for acquiring up to twelve submarines.
One condition of the deal stipulates that the economic benefits to Canada must match 100% of the federal government’s investment. TKMS has committed to injecting “tens of billions of dollars in investment” into various sectors like space, munitions, autonomous technology, critical minerals, and research and development, creating over 100,000 jobs nationwide.
The German bid also includes proposals for major investments, such as constructing a maintenance facility and manufacturing centers for torpedoes and anti-torpedo systems in Canada. Furthermore, the bid aligns with Canada’s economic objectives, including the goal of boosting LNG production to 50 million tonnes annually by 2030.
The selection of TKMS for the submarine procurement also enhances Canada’s ties with NATO and Europe, as TKMS is already a supplier to NATO forces. The submarines offered are optimized for Arctic conditions and are fully interoperable with NATO standards, enabling seamless communication and collaboration on joint missions.
While the German bid promises significant benefits for Canada’s coasts, particularly in shipbuilding and maintenance activities, the decision does not signal a shift away from Canada’s Indo-Pacific strategy. Hanwha remains the backup supplier, ready to take over the contract if negotiations with TKMS do not reach a successful conclusion. The economic impact of the submarine procurement is expected to extend throughout Canada, with Halifax and the West Coast poised to see substantial economic activity in the coming years.