Canada selects German shipbuilder TKMS for 12-submarine fleet, reports say
ThyssenKrupp Marine Systems has been chosen as the preferred bidder to build Canada's next-generation submarine fleet, according to reports, with an official announcement expected Monday before Prime Minister Mark Carney departs for the NATO summit in Ankara.
The selection
Canada has selected German shipbuilder ThyssenKrupp Marine Systems (TKMS) as the preferred bidder for a contract to build 12 conventionally powered submarines, the Globe and Mail reported on Monday. TKMS, a partnership between Germany and Norway, beat out South Korea's Hanwha Ocean in the competition. Prime Minister Mark Carney is expected to announce the decision later on Monday during a visit to a Canadian Armed Forces base in Nova Scotia, before heading to the NATO leaders' summit in Turkey.
Contract value and scope
The submarine construction contract alone is valued at more than €10 billion, according to industry estimates. With decades of maintenance and operation included, the total deal could reach around €100 billion, dpa reported. TKMS shares jumped as much as 11% on the news, reaching their highest level since mid-March. Both bidders had promised to generate jobs and investment in Canada, with TKMS offering a broader industrial package covering rare earths, mining, artificial intelligence and battery production for the automotive sector.
NATO context and spending targets
The announcement comes as NATO allies push to raise defense spending. Canada, under pressure from the United States, has already met the alliance's 2% of GDP target earlier than planned. NATO leaders have agreed to spend 5% of GDP on defense and security-related investments by 2035. Canada is also expected to announce around 10 founding nations for a global defense bank at the Ankara summit.
German government's strategic hopes
Berlin had hoped to seal the submarine deal in time for the NATO gathering, viewing it as a cornerstone of long-term strategic cooperation.
If it succeeds, then Canada will be tied to us for decades. That would be a very good starting point for strategic cooperation.
A German official described the TKMS offer as "unbeatable" ahead of the decision.
Next steps
With the preferred bidder now identified, Ottawa will enter detailed negotiations with TKMS. Professor Philipp Lagassé of Carleton University told the Globe and Mail that finalizing the contract could take years. Hanwha Ocean had mounted an aggressive campaign, including showcasing its KSS-III submarine in British Columbia after the vessel's first trans-Pacific crossing by the South Korean navy.
