Canada has revealed its intention to purchase potentially up to twelve submarines from German shipbuilder ThyssenKrupp Marine Systems (TKMS), marking the conclusion of a fierce competition to replace the aging Victoria-Class submarine fleet. The bids, presented by South Korea in collaboration with Hanwha Ocean and by Germany and Norway through TKMS, included commitments beyond submarine procurement, focusing on significant investments in the Canadian economy.
TKMS proposed to supply four Type 212CD submarines to the Royal Canadian Navy by 2036, with the first submarine expected to be delivered by 2034. This closely matched the South Korean bid, which also offered to deliver four submarines by 2035. The timely delivery aligns with the retirement schedule of Canada’s current fleet, with only one operational submarine at present.
Prime Minister Mark Carney, in announcing the selection of the TKMS bid, highlighted the potential for the procurement of up to twelve submarines through ongoing negotiations. The deal mandates that the value of the federal investment must be matched with economic benefits to Canada, amounting to “tens of billions of dollars” in investments across various defense and industrial sectors.
The TKMS contract is projected to generate over 100,000 well-paying jobs throughout Canada, with a particular focus on roles such as welders, pipefitters, engineers, machinists, and researchers. The proposed investments by TKMS and the German government could stimulate an $86-billion boost to Canada’s GDP, with the creation of up to 50,000 jobs in the next five years and over 654,695 job years of employment in the project’s lifespan.
Germany’s proposal includes establishing a maintenance facility on Canadian coasts, manufacturing centers for torpedoes, and anti-torpedo systems. Additionally, plans to transform Manitoba’s Port of Churchill into an LNG and critical minerals export hub align with Canada’s economic objectives. The bid also includes the development of a carbon capture facility in partnership with Alberta.
The TKMS platform’s compatibility with NATO forces is a significant aspect of the bid, offering seamless communication and joint mission capabilities. This deal further strengthens Canada’s ties with NATO and Europe, enhancing interoperability in Arctic waters. While the German bid aligns with Canada’s economic objectives, Carney emphasized that the country remains committed to its Indo-Pacific strategy.
The announcement is expected to bring substantial economic benefits to Canadian coasts, particularly in Halifax and on the West Coast, with opportunities for shipbuilding and maintenance activities. Carney anticipates long-term economic activity in these regions and across Canada as a result of this significant defense procurement.
Canada’s decision to opt for the German bid does not preclude the possibility of negotiations with Hanwha if discussions with TKMS do not progress as planned. This strategic move underscores Canada’s commitment to enhancing its defense capabilities while stimulating economic growth and job creation across the country.