{"id":783900,"date":"2026-07-06T13:27:09","date_gmt":"2026-07-06T13:27:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/783900\/"},"modified":"2026-07-06T13:27:09","modified_gmt":"2026-07-06T13:27:09","slug":"ottawa-picks-germanys-tkms-to-build-canadas-new-submarines-sources-say","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/783900\/","title":{"rendered":"Ottawa picks Germany\u2019s TKMS to build Canada\u2019s new submarines, sources say"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Prime Minister Mark Carney holds up a model submarine at Thyssenkrupp Marine Systems (TKMS), a submarine building facility in Kiel, Germany, on Aug. 26, 2025.Christinne Muschi\/The Canadian Press<\/p>\n

The Canadian government has selected Germany\u2019s TKMS to build a fleet of submarines for this country, two sources say.<\/p>\n

The Globe and Mail is not identifying the sources because they were not authorized to speak publicly about the matter. <\/p>\n

Prime Minister Mark Carney will announce the government\u2019s decision in Halifax Monday \u2014 the outcome of a high-stakes competition between Germany and South Korea for a lucrative contract to build 12 submarines for Canada.<\/p>\n

The purchase will give this country an unprecedented ability to patrol its coastal waters undetected. Mr. Carney had previously said the government would make its decision by the end of June, but didn\u2019t specify an exact date.<\/p>\n

The announcement, which the Prime Minister will unveil before jetting to the NATO leaders\u2019 summit in Turkey, will bring an end to a closely fought campaign by Germany\u2019s TKMS and South Korea\u2019s Hanwha, rivals in a contest that will shape the Royal Canadian Navy for decades.<\/p>\n

As with the process for most major procurements, the sub announcement will likely name a preferred bidder, not guarantee a signed contract. <\/p>\n

Negotiations will continue with the nominal winner, and it could take years to finalize a deal, said Philippe Lagass\u00e9, a professor at Carleton University who researches defence<\/a> policy. <\/p>\n

Canada\u2019s historic submarine procurement incites fierce industrial benefits competition<\/a><\/p>\n

The procurement is ultimately expected to be worth $20-billion to $30-billion for the subs themselves, and as much as $40-billion to $50-billion for operations, maintenance and upgrades.<\/p>\n

The Prime Minister\u2019s Office declined comment Sunday when asked about Mr. Carney\u2019s Monday plans.<\/p>\n

Both the German and the South Korean embassy in Ottawa declined comment.<\/p>\n

The costly submarine contract is part of the federal government\u2019s efforts to lift defence spending to levels not seen since the Cold War. Canada has committed to increasing this spending to 5 per cent of gross domestic product by 2035, to meet the North Atlantic Treaty Organization\u2019s target.<\/p>\n

Ottawa said early on that both models of diesel-electric sub would suit its purposes \u2212 Hanwha\u2019s KSS-III Batch-II submarine or TKMS\u2019s 212CD model \u2013 and that its decision would turn instead on the economic benefits the companies could deliver for Canada.<\/p>\n<\/p>\n

Hanwha has promised more than $70-billion in trade and investment in Canada, and more than 25,000 jobs annually between 2026 and 2044.<\/p>\n

German Defence Minister Boris Pistorius said in May that the TKMS bid, a joint proposal with Norway, would add $86-billion to Canada\u2019s GDP in terms of economic benefits over the life of the deal. The proposal is expected to create more than 650,000 job years of employment in Canada over the term of the agreement, the Germans said. A job-year means one job for one year. <\/p>\n

Submarine facility plans in Halifax spark friction over shipyard labour pool<\/a><\/p>\n

There had been reports that Ottawa was considering splitting the contract between Hanwha and TKMS, but government ministers have in recent months played down this scenario.<\/p>\n

Canada\u2019s planned submarine purchase will be transformative for this country\u2019s military might, making this the first time in history that the Royal Canadian Navy will have more than a token presence underwater. <\/p>\n

Canada hasn\u2019t purchased unused submarines since the 1960s, during the Cold War, and has never ordered anywhere near 12 at once. Canada currently owns four subs, all of which were purchased second-hand, and only one of which is typically operational.<\/p>\n

The Canadian military has said that it needs 12 subs to properly defend the country, based on the assumption that for high readiness only one of every four vessels would be fit to deploy, with others under maintenance or used for training.<\/p>\n

The purchase will give Canada three submarines to deploy at any time \u2013 stealth machines that will create an ability to deter hostile or rival countries from prowling around the country\u2019s Arctic or Pacific and Atlantic coastlines.<\/p>\n

\u201cIt will give us much more of an ability to independently know what\u2019s happening around our own Canadian coastal waters,\u201d said David Perry, president of the Canadian Global Affairs Institute, a think tank.<\/p>\n

Since August, 2025, Hanwha and TKMS \u2013 and the countries backing them \u2013 have waged a very public campaign to buy their way into Ottawa\u2019s heart.<\/p>\n

Opinion: Canada\u2019s submarine conundrum: Buying a few boats is harder than it looks<\/a><\/p>\n

The Carney government, for its part, has taken advantage of this heated rivalry to extract spending promises from bidders that would benefit its Canada-first industrial policy, which seeks to preserve and expand industrial capacity as a defence against U.S. protectionism.<\/p>\n

Seoul-based Hanwha and TKMS, headquartered in Kiel, Germany, have pledged industrial benefits to Canada and lined up Canadian business partners who would benefit from the submarine contract.<\/p>\n

Hanwha, for instance, in January pledged to spend US$200-million to help struggling steelmaker Algoma build a steel-beam mill in Ontario if it wins the contract. And as part of this it vowed to buy up US$50-million worth of steel from Algoma for construction under the submarine project.<\/p>\n

\u201cThe public campaign by Hanwha and South Korea has been more visible and assertive than what we typically see in Canadian military procurements,\u201d Prof. Lagass\u00e9 said.<\/p>\n

\u201cTKMS and the German and Norwegian governments were slow to match South Korea\u2019s gusto but have since been working to match it.\u201d<\/p>\n

Politicians and senior officials from South Korea as well as from Germany and Norway have travelled to Canada to make their pitches. The South Koreans dispatched a submarine to Canada this spring to show off their technology.<\/p>\n

Algoma to supply metals for Hanwha combat vehicles if South Korean company wins sub contract<\/a><\/p>\n

Germany has underlined its long-standing relationship with Canada, including through NATO, as well as TKMS\u2019s record of building submarines for international customers.<\/p>\n

\u201cTogether, Canada, Germany and Norway can build the biggest, most modern and low-risk conventional submarine fleet: building, training and maintaining together, three NATO allies, two Arctic nations,\u201d Tjorven Bellmann, the German ambassador to Canada, said last week before the decision was made.<\/p>\n

\u201cOver the last 75 years, our two countries have developed a special relationship because of our partnerships and shared values, but also because we keep our promises to each other.\u201d<\/p>\n

Industrial benefits are a key component of many defence contract bids. Canada expects suppliers to spend in this country in fulfilment of their contracts.<\/p>\n

But defence experts say this submarine contract competition is different from other past bidding wars for other major weapons systems, such as Canada\u2019s last fighter-jet competition. <\/p>\n

In 2022, Canada selected the U.S.-made F-35 over the runner-up Saab Gripen from Sweden. (The F-35 contract is currently under review by Ottawa).<\/p>\n

\u201cThere was never any real question, I think, about what the Air Force\u2019s preferred option would be,\u201d Mr. Perry said of the competition that picked the F-35.<\/p>\n

Opinion: Let\u2019s just buy the F-35s and not cut off our nose to spite our face<\/a><\/p>\n

In this contest, it\u2019s unusual that there is no U.S. defence contractor bidding for the submarines. Canada ruled out nuclear submarines, and the United States no longer makes conventional diesel-electric subs. This also means there is less pressure from Canada\u2019s most powerful ally to pick one submarine over the other. <\/p>\n

Finally, South Korea, the underdog in this fight, has poured tremendous effort into the contract as the country tries to expand its military industry. TKMS on the other hand has an established reputation as an exporter of submarines: it has sold boats to 20 navies around the world, while Hanwha\u2019s customer list for subs is far shorter: South Korea and Indonesia.<\/p>\n

Seoul has put on a full-court press to win what would be a milestone military contract for the Asian country, which has set itself the economic objective of building the fourth-largest defence industry in the world. It ranked among the top 10 defence exporters between 2020 to 2024, according to the Stockholm International Peace Research Institute. <\/p>\n

\u201cThe Koreans have a lot at stake and that explains why they pumped so much into the advertising and the public diplomacy side of it,\u201d Prof. Lagass\u00e9 said.<\/p>\n

\u201cTo break into the Canadian market, a major NATO ally, with a submarine \u2013 for them that\u2019s a much bigger deal,\u201d Prof. Lagass\u00e9 said.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Prime Minister Mark Carney holds up a model submarine at Thyssenkrupp Marine Systems…\n","protected":false},"author":2,"featured_media":783901,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[49,48,44,714],"class_list":["post-783900","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-ca","tag-canada","tag-news","tag-politics"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/783900","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=783900"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/783900\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/783901"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=783900"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=783900"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=783900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}