Canada’s decision to engage in talks with German shipbuilder ThyssenKrupp Marine Systems (TKMS) for the potential acquisition of up to twelve submarines was announced by Prime Minister Mark Carney. This move concludes a competitive process to replace Canada’s aging Victoria-Class submarine fleet, with bids from South Korea’s Hanwha Ocean and a joint bid from Germany and Norway alongside TKMS.
TKMS proposed to supply 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 bid, which also offered to deliver four submarines by 2035. The timing is crucial as Canada’s current fleet is due for retirement in the mid-2030s, with only one operational submarine at present.
Highlighting the significance of the decision, Carney emphasized that TKMS and Hanwha Ocean both met the high standards required by the Royal Canadian Navy. By selecting the TKMS bid, Canada is now moving forward with negotiations for the potential purchase of up to twelve submarines.
In terms of economic benefits, Carney revealed that the deal with TKMS requires a full match of the federal government’s investment value in economic gains for Canada. The agreement is projected to bring in “tens of billions of dollars in investment” from TKMS across various defense and industrial sectors, including space, munitions, autonomous technology, critical minerals, and research and development.
Additionally, the TKMS contract is expected to generate over 100,000 well-paying jobs across Canada, with the initial phase focusing on submarine construction and requiring skilled workers such as welders, engineers, and machinists.
Germany’s proposal includes significant investments, such as the construction of a maintenance facility on Canadian coasts and manufacturing centers for torpedoes and anti-torpedo systems. Furthermore, the Germans have plans to repurpose Manitoba’s Port of Churchill into a major export hub for Canadian liquefied natural gas and critical minerals, aligning with Canada’s goal to increase LNG production to 50 million tonnes annually by 2030.
The TKMS platform’s NATO compatibility is a key aspect of the bid, as it allows seamless communication with NATO forces and supports joint missions. This integration with Germany further strengthens Canada’s ties with NATO and Europe, complementing previous agreements, such as the LNG export deal with Ksi Lisims in northern B.C.
Carney emphasized that opting for the German bid does not signify a shift away from Canada’s Indo-Pacific strategy. Despite selecting TKMS, Hanwha Ocean remains the backup supplier for the Navy’s submarine fleet replacement if negotiations with TKMS do not proceed as planned.
The announcement, made in Halifax, suggests substantial economic benefits for regions like Nova Scotia and the West Coast due to increased shipbuilding and maintenance activities. Carney anticipates significant long-term economic activity in Halifax as a result of the submarine deal, with benefits extending throughout Canada.