OTTAWA — Canada is nearing a decision on the procurement of up to 12 new submarines to replace its aging fleet, with an announcement expected shortly ahead of the July NATO summit. The multibillion-dollar contract has drawn significant international attention, setting the stage for one of the country’s largest defence acquisitions in recent history.
The contest features two primary bidders: South Korean manufacturer Hanwha and German firm TKMS. Each offers distinct submarine designs, though the federal government has indicated that either vessel would meet the Royal Canadian Navy’s operational requirements. Ottawa has maintained a tight lid on detailed bid information throughout the two-year procurement process, focusing more on associated economic benefits and delivery schedules than on technical capabilities.
Hanwha, seeking its first export submarine sale, has mounted an unprecedented public relations campaign across Canada. The company has launched widespread advertising in airports and on television, aiming to raise brand recognition and highlight its KSS-III submarine. With a reputation established within South Korea’s navy, Hanwha boasts a large shipyard and has proposed an accelerated delivery schedule, promising four vessels in service by 2035 and subsequent annual deliveries. The KSS-III design includes a larger hull than its German competitor and features vertical launch systems capable of firing ballistic or cruise missiles, a capability not present in the TKMS model.
By contrast, TKMS’s submission is the 212CD, an advanced variant of a model widely used by NATO allies including Germany and Norway. This submarine emphasizes stealth technology with a diamond-shaped hull to reduce sonar detection. TKMS’s strategy highlights interoperability advantages due to existing cooperation among NATO navies and English-language commonalities, factors considered important by some defence experts.
Observers have noted the unusual nature of the competition. Typically, submarine contracts are won through confidential, government-to-government negotiations focused on technical attributes and strategic fit. The public visibility of Hanwha’s marketing efforts surprised many, including TKMS CEO Oliver Burkhard, who described the approach as unorthodox for the sector. Nonetheless, analysts suggest that the bidding process reflects the increasing role of economic and industrial considerations in defence procurements. Industry Minister Mélanie Joly notably called for bidders to consider broader Canadian economic benefits, even encouraging offers involving the establishment of automotive manufacturing facilities.
Hanwha responded by proposing a potential joint venture to produce military vehicles domestically, a move seen as aligning with Ottawa’s interest in economic spinoffs from the deal. Experts observe that such industrial offsets are commonplace in large defence contracts and often influence final decisions.
Military analysts remain divided on which design or bidder holds the advantage. Paul Mitchell, a defence studies professor at the Canadian Forces College, commented that Hanwha’s aggressive marketing and delivery promises position them strongly, though no outcome is assured. Retired naval officers emphasize that both submarines fulfill similar roles with nuanced differences, suggesting the ultimate choice could hinge as much on strategic partnerships and economic impact as on the vessels themselves.
The expedited timeline and process changes implemented by the government have underscored the procurement’s strategic importance amid shifting geopolitical dynamics. The scale, complexity, and national significance of this submarine program mark it as a key milestone in Canada's maritime defence modernization agenda.