Canada has selected German defence manufacturer Thyssenkrupp Marine Systems (TKMS) to build its next-generation submarine fleet, choosing the European company over South Korea’s Hanwha Ocean in a multibillion-dollar defence programme aimed at modernising the Royal Canadian Navy.
Prime Minister Mark Carney announced the decision in Halifax on Monday before departing for the NATO summit in Ankara, Turkey.
“As part of our commitments to defend Canada and support our allies, I am pleased to announce that Canada has selected TKMS,” Carney said, adding that Canada would continue to pursue broader cooperation with South Korea in other areas.
The procurement forms part of Canada’s plan to replace its ageing Victoria-class submarines, which are expected to retire in the mid-2030s.
Canada first announced in 2024 that it intended to acquire 12 new submarines, although Carney indicated the final number could still change.
The decision comes as Canada seeks to strengthen its military capabilities, particularly in the Arctic, while expanding defence partnerships with NATO allies amid growing geopolitical uncertainty.
South Korea’s Hanwha Ocean had offered four customised KSS-III diesel-electric submarines by 2035, highlighting the advantage of its active production line and lower estimated costs.
Germany’s TKMS proposed its new 212CD submarines, featuring advanced stealth technology, fuel-cell propulsion and a redesigned hull intended to reduce sonar detection. The company projected delivery of the first vessels by 2036.
While Hanwha estimated its package at approximately CAD$24 billion for construction and about CAD$100 billion over 50 years for maintenance, TKMS argued that long-term operating costs would be reduced because the submarines are also being procured by Germany and Norway, allowing maintenance and software costs to be shared among allied operators.
Both companies pledged significant economic benefits for Canada.
Hanwha estimated its proposal would generate at least CAD$70 billion in economic value and approximately 430,000 job-years, while TKMS projected at least CAD$160 billion in economic value and about 650,000 job-years.
The decision also reflects Canada’s broader effort to deepen defence cooperation with European allies as uncertainty grows over future United States security commitments.
Prime Minister Carney has repeatedly called for Canada to reduce its dependence on the United States in areas such as defence, trade and critical infrastructure while strengthening partnerships with NATO members and other like-minded countries.
The announcement comes ahead of the NATO summit, where alliance members are expected to discuss defence spending, the war in Ukraine and long-term European security.
