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Canada Picks Germany's TKMS to Build Its New Submarine Fleet

  • Jul 5
  • 2 min read

Prime Minister Mark Carney has chosen Germany's ThyssenKrupp Marine Systems (TKMS), bid jointly with Norway, to build Canada's new fleet of 12 submarines. Carney called it the "best platform and partnership" for Canada, closing out a competition that had come down to TKMS and South Korea's Hanwha Ocean. The decision is one of the largest defence procurements in Canadian history.


The deal


TKMS will supply Type 212CD submarines, with Germany and Norway reportedly reallocating production slots from their own orders to get Canada four boats by 2036, matching a delivery timeline South Korea had also promised. TKMS is the world's largest builder of non-nuclear submarines and already supplies roughly 70 percent of NATO's submarine fleet, an edge the German-Norwegian consortium leaned on heavily during the bidding process: South Korea is not a NATO member, and TKMS argued Hanwha couldn't match its interoperability with alliance partners.


The numbers are significant. The submarine order itself is estimated at more than US$12 billion, and the full program, which includes 30 to 50 years of maintenance, is projected to exceed $100 billion over its lifespan. The new submarines are meant to replace Canada's four British-made Victoria-class boats, in service since 1998 and dogged by reliability problems for most of that run.


How it played out


The preferred-bidder decision was first reported in early July, ahead of Carney's announcement in Halifax and a NATO leaders' summit in Turkiye. Carney formalized the choice in a trilateral meeting with the leaders of Germany and Norway, thanking both countries for their bid. He also met briefly with South Korea's president on the summit's margins, an apparent effort to soften the blow for Hanwha Ocean, which finishes as runner-up after a bid that included its own aggressive delivery pitch and heavy lobbying in Ottawa.


Government officials have framed the pick as a NATO alignment win as much as a procurement decision. Carney's government has committed to hitting NATO's new defence spending target of 5 percent of GDP, after clearing the alliance's previous 2 percent benchmark earlier this year.


What's next


A preferred-bidder announcement isn't a signed contract. The Globe and Mail has reported that negotiations between Canada and TKMS will continue to finalize terms, so there's still room for the deal to shift before ink hits paper. Worth watching: how much of the build and maintenance work lands with Canadian shipyards and suppliers, since domestic industrial participation has been a running theme across this government's recent defence procurements.


 
 
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