In a significant announcement, Prime Minister Mark Carney revealed that Canada is in negotiations to purchase a potential dozen submarines from German shipbuilder ThyssenKrupp Marine Systems (TKMS), marking the conclusion of a competitive process to replace the aging Victoria-Class fleet.
Both competing bids, one from South Korea with Hanwha Ocean and the other from Germany and Norway with TKMS, included commitments that extended beyond just the procurement of submarines, promising substantial investments in Canada’s economy.
Although specific details remain confidential due to ongoing negotiations, here are five key points from what Carney described as “the most significant defense procurement in Canadian history.”
TKMS proposed to supply four Type 212CD submarines to the Royal Canadian Navy by 2036, with the first submarine scheduled for delivery by 2034, aligning closely with the South Korean bid’s timeline. This timing is crucial as Canada’s current fleet of four Victoria-Class submarines is set to retire in the mid-2030s, with only one operational at present.
Carney emphasized the difficulty in choosing between the two highly qualified suppliers, ultimately selecting the TKMS bid and initiating negotiations for up to 12 submarines.
The deal stipulates that 100% of the federal government’s investment must be matched by economic benefits to Canada, with TKMS committing to “tens of billions of dollars in investment” across various defense and industrial sectors, creating over 100,000 jobs nationwide.
Prior to the announcement, projections indicated that the combined investments from TKMS and the German government could boost Canada’s GDP by $86 billion, with the potential to generate up to 50,000 jobs in the next five years.
Germany’s bid included significant investments such as establishing a maintenance facility and manufacturing centers for torpedoes in Canada, aligning with the country’s economic goals, including increasing LNG production.
The selected TKMS platform offers compatibility with NATO forces, enhancing Canada’s ties with NATO and Europe, and fostering interoperability for joint missions in Arctic waters.
Carney highlighted the potential benefits for Canada’s coasts, particularly in Halifax and the West Coast, where shipbuilding and maintenance activities are expected to thrive for years to come, indicating broader economic benefits throughout the country.
