Canada has chosen a German consortium led by ThyssenKrupp Marine Systems (TKMS) to manufacture 12 advanced diesel-electric submarines, marking a major step in modernizing the Royal Canadian Navy and securing Arctic borders.
The multibillion-dollar project represents Canada's first purchase of brand-new naval vessels, according to the official announcement. TKMS defeated South Korean competitor Hanwha Ocean to secure the contract.
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The initial submarine acquisition is estimated to cost more than US$12 billion, as reported by the Guardian.
However, the comprehensive contract includes approximately 50 years of maintenance services, potentially pushing the final total past US$70 billion.
The new TKMS vessels feature advanced stealth technologies designed for operations in contested waters with minimal detection.
These capabilities will enable prolonged surveillance across critical Arctic shipping lanes, including the Northwest Passage.
Canada currently operates four Victoria-class submarines purchased secondhand from Britain in 1998. Three of those four vessels are offline for maintenance, underscoring the urgency of the modernization program.
Prior to the selection, Prime Minister Mark Carney and senior officials visited both the TKMS facility in Kiel, Germany, and Hanwha's plant in Geoje, South Korea.
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German representatives highlighted alignment with transatlantic defense systems, while Hanwha ran an advertising campaign promoting local economic benefits.
The procurement aligns with the Liberal party administration's push to escalate national defense spending to 5% of GDP by 2035.
Ottawa recently met the 2% GDP defense spending target for alliance members.
Beyond the naval fleet expansion, the federal government is exploring additional defense purchases from European contractors, including 72 Saab-made Gripen warplanes and six GlobalEye surveillance aircraft from Sweden.
The contract award comes ahead of a critical summit where international defense spending is expected to dominate discussions.
NATO Secretary General Mark Rutte described the submarines as "crucial kit we need to deter and defend."
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The federal government and TKMS will now enter formal legal negotiations to finalize specific terms, a process projected to take several years.
