Canada has officially chosen Germany’s ThyssenKrupp Marine Systems (TKMS) as the preferred supplier for its next fleet of submarines, marking the largest defence procurement in Canadian history. 

The deal, involving up to 12 advanced Type 212CD submarines, will strengthen Canada’s naval capabilities, create tens of thousands of jobs, and deepen trilateral cooperation with Germany and Norway.

Canadian Prime Minister Mark Carney announced the decision in Halifax before departing for the NATO summit in Ankara. He described the procurement as a landmark step for Canada’s sovereignty and defence readiness, emphasising that the project will deliver both strategic and economic benefits. 

Carney stated that Canada will build this fleet “at speed and scale” with its German and Norwegian allies, ensuring the Royal Canadian Navy is equipped to defend national interests in an increasingly dangerous world.

The German Chancellor Friedrich Merz welcomed the announcement, calling it a strong signal of transatlantic and European cooperation. He confirmed that Canada will procure German-Norwegian 212CD-class submarines, which are among the most advanced diesel-electric boats in NATO service. 

TKMS, majority-owned by Thyssenkrupp, submitted its bid jointly with Norway and was selected over South Korea’s Hanwha Ocean after months of competition. Carney noted that while Hanwha’s bid was strong, Canada retains the option to designate Hanwha as a reserve supplier if negotiations with TKMS falter.

The Canadian Patrol Submarine Project (CPSP) will replace Canada’s ageing Victoria-class submarines, only one of which is currently operational. The government expects to finalise the contract by the end of 2027, with the first four submarines delivered by 2034, ahead of the Victoria-class retirement. TKMS and Norway have agreed to adjust their production schedules to prioritise Canada’s needs, ensuring no gap in submarine capability.

The financial value of the deal has not been disclosed, but estimates suggest the acquisition could cost between 20 and 30 billion Canadian dollars (USD 14–21 billion), with lifetime costs reaching 40–50 billion Canadian dollars (USD 28–35 billion).

Carney confirmed that 100 per cent of the federal investment will be matched in economic benefits to Canada, including billions in industrial partnerships across defence, space, autonomous technology, critical minerals, and research. CBC News reported that the combined impact of TKMS and German government investments could contribute an 86-billion-dollar surge to Canada’s GDP, while sustaining over 100,000 well-paying jobs nationwide.

The submarines will feature advanced stealth technologies, diamond-shaped hulls to reduce sonar signatures, and air-independent propulsion systems using hydrogen fuel cells, enabling weeks-long submerged endurance. These capabilities will allow Canada to maintain a sustained presence in the Atlantic, Pacific, and Arctic oceans, supporting NORAD missions, NATO operations, and Arctic sovereignty patrols.

The announcement comes amid pressure from US President Donald Trump for NATO allies to increase defence spending. Canada has already met NATO’s 2 per cent GDP target ahead of schedule and is committed to reaching the new 5 per cent benchmark by 2035.

Carney confirmed that the submarine programme will help Canada spend the equivalent of 4 per cent of GDP on defence by 2030, moving closer to NATO’s pledge.

Shares of TKMS surged 11 per cent following the announcement, reflecting investor confidence in the company’s largest-ever order. TKMS CEO Oliver Burkhard described the CPSP as “the foundation of a long-term strategic partnership between trusted allies,” promising delivery of a world-class submarine capability that will strengthen security and generate lasting benefits for future generations.

ANI