Canada is in talks to purchase around twelve submarines from ThyssenKrupp Marine Systems (TKMS), a German shipbuilder, according to Prime Minister Mark Carney. This decision marks the end of a competitive process to replace Canada’s aging Victoria-Class submarine fleet. TKMS and Hanwha Ocean from South Korea, along with Germany and Norway, submitted bids that went beyond just submarine procurement, promising substantial investments in Canada’s economy.
TKMS proposed delivering four Type 212CD submarines to the Royal Canadian Navy by 2036. The initial submarine is expected by 2034, aligning closely with Hanwha’s offer to supply four submarines by 2035. This timing is crucial as Canada’s current fleet of four Victoria-Class submarines is due for retirement in the mid-2030s, with only one currently operational.
Carney highlighted that the selection of the TKMS bid initiates negotiations for up to twelve submarines. The deal includes a stipulation that 100% of the government’s investment value must translate into economic benefits for Canada, amounting to “tens of billions of dollars” in investments across defense and industrial sectors such as space, munitions, autonomous technology, critical minerals, and research and development.
The combined investments from TKMS and the German government are anticipated to boost Canada’s GDP by $86 billion. Carney emphasized that the TKMS contract will generate over 100,000 well-paying jobs in various sectors, including welding, engineering, and research.
TKMS’s proposal involves significant investments, such as establishing a maintenance facility and manufacturing centers for torpedoes and anti-torpedo systems. Manitoba’s Port of Churchill is slated for development into an export hub, supporting the transport of Canadian liquefied natural gas and critical minerals. Additionally, a carbon capture facility utilizing TKMS technology is planned in partnership with Alberta.
The bid from TKMS aligns with Canadian economic goals, including the aim to increase LNG production to 50 million tonnes annually by 2030. The submarines offered by TKMS are designed to be NATO-compatible, enhancing interoperability and joint missions. Carney emphasized that the deal with TKMS does not detract from Canada’s Indo-Pacific strategy, with Hanwha remaining the backup supplier for the submarine fleet replacement.
Carney highlighted the economic benefits for Canada’s coasts, particularly in Halifax and the West Coast, as a result of the German and Norwegian submarine contract. The opportunities for shipbuilding and maintenance are expected to create substantial economic activity in these regions. Carney emphasized that this deal signifies the beginning of long-term economic benefits for Canada.
Overall, the decision to proceed with the TKMS bid underscores a major step in Canada’s defense procurement history, with significant economic and strategic implications for the country.