Canada is in talks to purchase up to twelve submarines from ThyssenKrupp Marine Systems (TKMS), a German shipbuilder, as announced by Prime Minister Mark Carney. This decision concludes a competitive process to replace Canada’s aging Victoria-Class submarine fleet, with bids also coming in from South Korea with Hanwha Ocean and a joint bid from Germany and Norway with TKMS. Both offers included commitments beyond just submarine procurement, highlighting substantial investments and contributions to the Canadian economy.
TKMS proposed delivering four Type 212CD submarines to the Royal Canadian Navy by 2036, with the first expected by 2034. This aligns closely with the South Korean bid, which also offered to supply four submarines by 2035. The timing of the procurement is crucial as Canada’s current Victoria-Class submarines are due for retirement in the mid-2030s, with only one currently operational.
Prime Minister Carney, after careful consideration, selected the TKMS bid, initiating negotiations for the potential acquisition of up to twelve submarines. The deal includes a stipulation that the full value of the government’s investment must be matched by economic benefits to Canada, with TKMS committing to bring tens of billions of dollars in investments across various defense and industrial sectors.
Furthermore, the TKMS contract is projected to generate over 100,000 well-paying jobs in Canada, especially in fields like welding, engineering, and research. The proposed investments from TKMS and the German government could result in an $86-billion boost to Canada’s GDP, with significant job creation potential.
Additionally, the German bid aligns with Canada’s economic goals, including plans to increase LNG production. The proposal includes investments in various sectors, such as the construction of a maintenance facility, manufacturing centers for torpedoes, and a carbon capture facility in partnership with Alberta.
The TKMS submarines are designed to be compatible with NATO forces, enhancing Canada’s ties with NATO and Europe. The submarines’ interoperability with NATO capabilities and optimized performance in Arctic waters were key considerations in the selection process. The deal also signifies a deepening partnership with Germany, following a previous LNG export agreement.
While the German bid promises substantial economic benefits for Canada, Carney emphasized that the country remains committed to its Indo-Pacific strategy. The potential benefits of the contract are expected to extend to various regions in Canada, with Halifax and the West Coast likely to experience significant economic activity related to shipbuilding and maintenance.
In summary, the decision to pursue the TKMS submarine bid reflects a significant milestone in Canadian defense procurement history, with profound economic implications and job creation opportunities for the country.