Canada has revealed plans to purchase up to twelve submarines from German shipbuilder ThyssenKrupp Marine Systems (TKMS), ending a competitive process to replace the country’s aging fleet of Victoria-Class submarines. Both the South Korean bid with Hanwha Ocean and the joint bid from Germany and Norway with TKMS included promises of significant investments in Canada’s economy beyond just submarine procurement.
TKMS has offered to deliver four Type 212CD submarines to the Royal Canadian Navy by 2036, with the first one expected by 2034. This aligns closely with the South Korean proposal to deliver four submarines by 2035. The timing of the delivery is crucial as the current Victoria-Class submarines are set to retire in the mid-2030s, with only one operational at present.
Prime Minister Mark Carney, while acknowledging the tough decision between the two competitive bids, highlighted that both TKMS and Hanwha platforms met the Royal Canadian Navy’s high standards. Canada has chosen the TKMS bid and is now in negotiations to procure up to twelve submarines.
The agreement stipulates that the value of Canada’s investment must be matched by economic benefits to the country. TKMS has committed to investing “tens of billions of dollars” across various defense and industrial sectors, creating over 100,000 well-paying jobs in Canada.
Before the official announcement, it was estimated that the proposed investments could contribute an $86-billion boost to Canada’s GDP. TKMS’s offer aligns with Canada’s economic goals, including increasing LNG production to 50 million tonnes per year by 2030.
In addition to economic benefits, TKMS’s platform is designed to be interoperable with NATO forces, enhancing cooperation and joint missions. This deal with TKMS further solidifies ties with Germany, following a previous agreement to sell LNG from a terminal in northern B.C.
Prime Minister Carney emphasized that selecting the German bid does not signal a shift away from Canada’s Indo-Pacific strategy. While TKMS has been chosen as the primary supplier, Hanwha remains the reserve supplier should negotiations with TKMS fall through.
The announcement was made in Halifax, hinting at significant economic activity in shipbuilding and maintenance in Nova Scotia and other coastal regions of Canada. Carney emphasized that the benefits of the submarine procurement would extend throughout the country, marking the beginning of a long-term economic impact.