Prime Minister Mark Carney is set to announce the outcome of a closely contested competition between Germany and South Korea to secure a contract to build 12 submarines for Canada, according to sources familiar with the matter. The announcement is expected Monday in Halifax, ahead of Carney’s departure for the NATO leaders’ summit in Turkey.

The contract, valued between $20 billion and $30 billion for the submarines alone, represents a major investment in the Royal Canadian Navy’s capabilities. When factoring in long-term operations, maintenance, and upgrades, the total expenditure could reach $40 billion to $50 billion. The submarines are anticipated to significantly enhance Canada's ability to monitor and patrol its coastal waters undetected.

The two finalists in the competition are Germany’s ThyssenKrupp Marine Systems (TKMS) and South Korea’s Hanwha. The decision will designate a preferred bidder but will not necessarily result in an immediate signed agreement. According to Philippe Lagassé, a defence policy professor at Carleton University, further negotiations are expected with the chosen bidder, and the finalization of the contract could take several years.

The procurement program is part of the federal government’s broader initiative to bolster defence spending to levels not seen since the Cold War era. Canada has pledged to increase its defence budget to 5 percent of gross domestic product by 2035, aligning with targets set by the North Atlantic Treaty Organization (NATO).

The Prime Minister’s Office declined to comment on the announcement plans when approached on Sunday. The submarine procurement is a key component of Canada's effort to modernize its military assets amid evolving global security challenges.