Canada Narrows Submarine Deal to German and South Korean Firms
Canada has taken a major step forward in replacing its aging submarine fleet, and the announcement was made in dramatic fashion during Prime Minister Mark Carney’s visit to Berlin. Speaking alongside German Chancellor Friedrich Merz, Carney confirmed that only two companies remain in the running for what could become one of the country’s largest military procurement projects in decades.
The finalists are Germany’s Thyssen Krupp Marine Systems, widely known as TKMS, and South Korea’s Hanwha Ocean Co. Both are seen as capable of meeting the very specific and challenging requirements set out by the Royal Canadian Navy. To underline the seriousness of the process, Carney even traveled to Kiel, Germany, to personally tour TKMS’s submarine production facility. He will later visit Hanwha’s shipyards in South Korea this October.
Canada is planning to purchase up to 12 submarines—far more than its current fleet of four Victoria-class subs, which have long been criticized for reliability issues and limited availability. The new fleet, officials said, must be able to operate year-round under the Arctic sea ice, in the vast Pacific, and along the Atlantic coast. That level of demand narrowed the field quickly, Carney explained, leaving only these two international suppliers as viable contenders.
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While the final price tag has not yet been made public, the project is widely expected to cost many billions of dollars. Government officials stressed that negotiations will weigh not just the cost of the submarines themselves, but also the potential economic benefits for Canada. TKMS, for instance, has already signaled openness to shifting parts of its manufacturing or maintenance work to Canadian facilities if chosen, which could provide significant domestic jobs and industry growth.
For Germany, Chancellor Merz emphasized that commonality among allied navies could strengthen defense cooperation. He urged Canada to consider the benefits of interoperability, noting that shared submarine platforms would make training and joint operations far more efficient. From his perspective, this was not simply about securing contracts for German industry but about strengthening NATO’s collective security in the North Atlantic.
Canada, meanwhile, has ruled out acquiring nuclear-powered submarines, which could have provided much longer underwater endurance but at a prohibitive cost. Military planners have said that 12 conventional submarines are needed so that at least a few are always operational while others are undergoing maintenance or training duties.
The first of the new submarines is not expected to arrive until 2035, but the decision on a supplier will shape Canada’s naval capabilities for decades. Alongside this defense project, Carney also announced new steps in economic cooperation with Germany, particularly in critical minerals and energy, further underlining how security and economic strategy are being tied together in Canada’s international partnerships.
This submarine procurement project is more than just a military upgrade. It is being framed as a cornerstone of Canada’s defense readiness, a boost to its global alliances, and a potential economic driver at home. The decision between Germany and South Korea, when it comes, will signal not only who builds Canada’s next fleet, but also where the country places its trust in shaping the future of its naval power.
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