Canada to buy 12 hi-tech German submarines after bidding war
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- TKMS beat South Korea's Hanwha Ocean to win Canada's submarine contract, offering its 212CD diesel-electric model after both firms pitched tech-heavy vessels and spillover economic benefits for months.
- The Royal Canadian Navy will receive 12 submarines—its first-ever purchase of new vessels—replacing four second-hand Victoria-class boats bought from Britain in 1998, three of which are currently undergoing maintenance.
- Mark Carney announced the winner Monday, but Ottawa and TKMS must still complete lengthy negotiations that could take years; the sub order alone is estimated at US$12bn, though roughly 50 years of maintenance could push the total past US$70bn.
- The new submarines are built for Arctic stealth operations and lengthy surveillance missions in contested areas including the Northwest Passage, giving Canada a stronger foothold in the region.
- German officials repeatedly pushed NATO compatibility during their pitch, with TKMS reportedly hoping to expand the contract into rare earths, mining, AI, and battery production for the automotive sector.
- The deal lands as Carney's Liberals push toward 5% of GDP on defence by 2035; Canada recently hit the 2% NATO target and is also weighing 72 Saab Gripen warplanes alongside its existing 18-aircraft F-35 order.
- NATO Secretary General Mark Rutte told reporters Monday that alliance members were about to announce billions in new contracts, calling it the "crucial kit we need to deter and defend."
Why it matters: TKMS and the German defence industry land one of Canada's largest-ever procurement contracts, worth US$12bn upfront and potentially US$70bn+ over five decades, while Ottawa deepens its shift toward European suppliers and away from US vendors amid political friction—reinforcing Carney's pledge to hit 5% of GDP on defence by 2035.
