Prime Minister Mark Carney has announced that Canada is in negotiations to purchase up to twelve submarines from German shipbuilder ThyssenKrupp Marine Systems (TKMS), bringing an end to a competitive process to replace Canada’s aging Victoria-Class submarine fleet. Both competing bids, one from South Korea’s Hanwha Ocean and the other from TKMS in partnership with Germany and Norway, went beyond just submarine procurement by promising significant investments in Canada’s economy.
TKMS has proposed delivering four Type 212CD submarines to the Royal Canadian Navy by 2036, with the first scheduled for delivery by 2034. This offer aligns closely with Hanwha Ocean’s proposal to provide four submarines by 2035. The timing is crucial as Canada’s current fleet of Victoria-Class submarines is set for retirement in the mid-2030s, with only one currently operational.
In his announcement in Halifax, Carney emphasized the difficulty of the decision between the two highly qualified suppliers, praising both platforms for meeting the Royal Canadian Navy’s high standards. Canada’s selection of the TKMS bid initiates negotiations for the potential procurement of up to twelve submarines.
Under the terms of the agreement, TKMS must match 100% of the federal government’s investment with economic benefits to Canada. Carney highlighted that TKMS’s investments across defense and industrial sectors, including space, munitions, autonomous technology, critical minerals, and research and development, could amount to tens of billions of dollars and create over 100,000 well-paying jobs in Canada.
The German bid aligns with several of Canada’s economic objectives, including the goal to increase LNG production to 50 million tonnes annually by 2030. Additionally, TKMS proposed various investments, such as constructing a maintenance facility on one of Canada’s coasts, manufacturing torpedoes and anti-torpedo systems, and developing a carbon capture facility in partnership with Alberta.
The TKMS platform’s compatibility with NATO forces, its optimization for Arctic waters, and its full NATO interoperability were highlighted by Carney as significant factors in the bid. The deal with TKMS further integrates Canada with Germany, following a previous agreement to sell LNG from a terminal in northern B.C. Carney clarified that while Germany was chosen, Canada’s Indo-Pacific strategy remains unchanged, with Hanwha Ocean remaining the reserve supplier if negotiations with TKMS fall through.
Carney emphasized the potential economic benefits for both coasts of Canada, particularly in Halifax for shipbuilding and maintenance activities. He anticipates substantial economic activity in Halifax and on the West Coast as a result of the German and Norwegian contract, with benefits extending throughout the country.