Canada’s plan to purchase up to a dozen submarines from German shipbuilder ThyssenKrupp Marine Systems (TKMS) has been revealed by Prime Minister Mark Carney. This decision concludes a rigorous competition to replace Canada’s aging Victoria-Class submarine fleet, with bids from South Korea’s Hanwha Ocean and a joint bid from Germany and Norway with TKMS.
TKMS proposed delivering four Type 212CD submarines to the Royal Canadian Navy by 2036, aligning closely with the South Korean bid, which also offered to provide four submarines by 2035. The replacement timing is crucial as Canada’s current Victoria-Class submarines are set for retirement in the mid-2030s, with only one currently operational.
In his announcement in Halifax, Carney emphasized the significant economic benefits of the deal, stating that TKMS’s investments would amount to “tens of billions of dollars” across various sectors such as space, munitions, autonomous technology, critical minerals, and research and development. The agreement also mandates that 100% of the federal government’s investment value must be matched with economic benefits for Canada.
The TKMS contract is expected to generate over 100,000 well-paying jobs in Canada, with initial phases involving tasks like submarine construction, requiring skilled workers such as welders, pipefitters, engineers, machinists, and researchers. The combined impact of TKMS and the German government’s proposed investments could potentially contribute an $86-billion boost to Canada’s GDP.
Germany’s bid includes plans for establishing a maintenance facility on one of Canada’s coasts, manufacturing centers for torpedoes and anti-torpedo systems, and turning Manitoba’s Port of Churchill into a significant export hub for Canadian LNG and critical minerals. Additionally, the German government proposed a carbon capture facility in partnership with Alberta.
The TKMS platform offers compatibility with NATO forces, as the company already supplies the alliance with submarines. This alignment enhances communication and joint mission capabilities within NATO. The deal further strengthens ties between Canada and Germany, building on a previous agreement to export LNG from an Indigenous-owned terminal in northern British Columbia.
While the German bid has been selected, Hanwha remains the reserve supplier for Canada’s submarine fleet replacement. Carney assured that the decision does not signify a shift away from Canada’s Indo-Pacific strategy. The economic benefits from the submarine contract are expected to extend to Halifax and the West Coast, fostering long-term economic activity in shipbuilding and maintenance sectors.