Canada is in talks to purchase up to twelve submarines from German shipbuilder ThyssenKrupp Marine Systems (TKMS), as revealed by Prime Minister Mark Carney. This decision marks the conclusion of a competitive process to replace Canada’s aging Victoria-Class fleet of submarines.
Both proposals, one from South Korea with Hanwha Ocean and the other from Germany and Norway with TKMS, included commitments beyond submarine procurement, focusing on substantial investments and contributions to Canada’s economy.
While specific details remain confidential due to ongoing negotiations, Prime Minister Carney highlighted five key takeaways from what he described as a significant defense procurement in Canadian history.
TKMS has proposed delivering four Type 212CD submarines to the Royal Canadian Navy by 2036, with the first submarine expected to be ready by 2034. This aligns closely with the South Korean bid, which also offered to supply four submarines by 2035, aiming to replace the retiring Victoria-Class submarines by the mid-2030s.
Emphasizing the importance of timing, Carney stated that only one of the existing Victoria-Class submarines is currently operational, underscoring the urgency of the replacement process.
In his announcement in Halifax, Carney acknowledged the difficult decision in selecting the TKMS bid, leading to negotiations for the potential acquisition of up to twelve submarines.
Furthermore, Carney confirmed that the deal stipulates that the investment’s value must be matched by economic benefits to Canada, with TKMS poised to inject “tens of billions of dollars” into key defense and industrial sectors, including space, munitions, autonomous technology, critical minerals, and research and development.
The potential economic impact of the TKMS investment, combined with the German government’s contributions, could provide an $86 billion boost to Canada’s GDP, creating over 100,000 well-paying jobs across various regions.
The German bid aligns with Canada’s economic goals, including the expansion of LNG production, and proposes significant investments, such as establishing maintenance facilities and manufacturing centers for torpedoes and anti-torpedo systems.
Moreover, the agreement with TKMS enhances Canada’s ties with NATO and Europe, leveraging TKMS’s existing NATO compatibility and expertise in Arctic operations.
Looking ahead, the deal promises substantial economic benefits for Canadian coasts, particularly in shipbuilding and maintenance activities in Halifax and economic opportunities on the West Coast, with benefits extending nationwide.
Carney emphasized that while opting for the German bid, Canada remains committed to its Indo-Pacific strategy. However, Hanwha remains the backup supplier for the submarine fleet replacement, ready to step in if negotiations with TKMS falter.
The announcement underscores the beginning of a new chapter in Canada’s defense capabilities and economic growth, with significant implications for the country’s maritime industry and national security.
