Canada selects German-led consortium to build 12 submarines in major defence deal
Canada has selected a German-led consortium to build 12 new submarines in one of the country's largest defence contracts. Prime Minister Mark Carney announced the decision on Monday after a closely fought competition between ThyssenKrupp Marine Systems and South Korea's Hanwha Ocean. The deal is intended to replace Canada's ageing submarine fleet and strengthen the Royal Canadian Navy's capabilities.
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The winning bid comes from ThyssenKrupp Marine Systems, which is described as the largest manufacturer of non-nuclear submarines and a key supplier to NATO's fleet. Canada had previously said both the German 212CD model and Hanwha's KSS-III Batch-II submarine met its military requirements. The order is for 12 vessels, marking the first time Canada has bought brand-new submarines rather than second-hand ones.
The current fleet consists of four Victoria-class submarines bought from Britain in 1998, and three of them are undergoing maintenance. The new submarines are expected to improve Canada's ability to operate in the Arctic, including on surveillance missions along key routes such as the Northwest Passage. The German vessels are designed with stealth technology for use in contested areas with reduced detection, while the South Korean design was said to offer greater size and weapons capacity.
The contract is estimated to be worth more than US$12bn, but the full cost could rise above US$70bn once roughly half a century of maintenance is included. That makes it one of Canada's most expensive defence procurements and a significant long-term commitment for the federal government. The decision also comes ahead of a crucial NATO summit this week, underlining the alliance dimension of the purchase.
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The procurement has been closely watched because it combines military, industrial and strategic considerations. Canada has been seeking to modernise a submarine fleet that has long relied on older vessels, while also weighing the economic benefits promised by the competing bidders. Carney previously visited TKMS's facility in Kiel and toured a newly built submarine at Hanwha's site in Geoje during the bidding process.
The government and TKMS still need to negotiate the final contract, and that process could take years. It remains unclear how quickly the submarines will be delivered and how the maintenance arrangements will be structured over the coming decades. What happens next will depend on those negotiations, as well as on how the deal is framed within Canada's wider defence and Arctic policy.
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