Canada has revealed plans to purchase up to twelve submarines from German shipbuilder ThyssenKrupp Marine Systems (TKMS), marking the end of a competitive process to replace the country’s aging fleet of Victoria-Class submarines. Both South Korea with Hanwha Ocean and Germany and Norway with TKMS offered comprehensive bids that went beyond just submarine procurement, promising significant investments in Canada’s economy.
TKMS has proposed delivering four Type 212CD submarines to the Royal Canadian Navy by 2036, with the first submarine expected by 2034. This aligns closely with the timeline offered by the South Korean bid. The replacement of the current Victoria-Class submarines, which are set for retirement in the mid-2030s, is crucial as only one is currently operational.
Prime Minister Mark Carney emphasized the strategic significance of the decision, highlighting that Canada is now engaged in negotiations to procure up to 12 submarines. The deal with TKMS includes a condition that 100% of the federal government’s investment value should be matched in economic benefits to Canada.
The TKMS contract is anticipated to generate tens of billions of dollars in investments across various sectors such as space, munitions, autonomous technology, critical minerals, and research and development. This investment is projected to create over 100,000 well-paying jobs in Canada, with a focus on roles like welders, pipefitters, engineers, machinists, and researchers.
Furthermore, the German proposal includes major investments in Canada, including the construction of a maintenance facility, manufacturing centers for torpedoes and anti-torpedo systems, and the transformation of Manitoba’s Port of Churchill into a key export hub for Canadian liquefied natural gas and critical minerals.
The TKMS platform’s compatibility with NATO forces was highlighted as a significant advantage, as the submarines are designed to operate in Arctic waters and seamlessly communicate with NATO allies. The deal with Germany is expected to deepen Canada’s ties with NATO and Europe.
The agreement with TKMS aligns with several of Canada’s economic goals, including the aim to increase LNG production to 50 million tonnes per year by 2030. The benefits of the submarine contract are expected to extend to various regions in Canada, with Halifax and the West Coast anticipated to see significant economic activity related to shipbuilding and maintenance.
While the decision to go with the German bid signifies a strong move for Canada, the option from Hanwha Ocean remains as the reserve supplier, ready to step in if negotiations with TKMS do not reach a satisfactory conclusion.
