Canada is set to purchase up to twelve submarines from German shipbuilder ThyssenKrupp Marine Systems (TKMS), as announced by Prime Minister Mark Carney. This decision marks the conclusion of a fierce competition to replace Canada’s aging Victoria-Class submarine fleet.
The bids from South Korea’s Hanwha Ocean and the joint bid from Germany and Norway with TKMS included commitments beyond just providing submarines, with promises of substantial investments in Canada’s economy. TKMS offered to deliver four Type 212CD submarines to the Royal Canadian Navy by 2036, aligning closely with the South Korean bid’s timeline.
Carney emphasized the significance of this procurement, labeling it as “the most consequential defense procurement in Canadian history.” The deal with TKMS involves negotiations for up to twelve submarines, with a focus on generating economic benefits for Canada.
The agreement stipulates that 100% of the federal government’s investment must be matched with economic benefits for Canada. TKMS is expected to inject “tens of billions of dollars in investment” into various sectors such as space, munitions, autonomous technology, critical minerals, and research and development.
The TKMS contract is projected to create over 100,000 well-paying jobs across the country, with opportunities spanning roles from welders and engineers to researchers. The proposed investments by TKMS and the German government could result in an $86-billion boost to Canada’s GDP.
Germany’s bid includes plans for significant investments, such as establishing maintenance and manufacturing facilities in Canada. The proposal also involves utilizing Manitoba’s Port of Churchill as an export hub for Canadian liquefied natural gas and critical minerals, aligning with Canada’s economic objectives.
The TKMS submarines are designed to be compatible with NATO forces, enhancing Canada’s ties with the alliance. The deal with TKMS signifies deeper cooperation with Germany and NATO, ensuring interoperability and joint missions in Arctic waters.
Despite opting for the German bid, Canada remains committed to its Indo-Pacific strategy. Hanwha Ocean remains the backup supplier, ready to step in if negotiations with TKMS falter.
The announcement is expected to bring significant economic activity to Canadian coasts, particularly benefiting Halifax and the West Coast. Carney highlighted the long-term economic opportunities that this submarine procurement will bring to Canada.