The Canadian government will prioritize the submarine contract bid that generates the most jobs within Canada, according to the official overseeing military procurement. Liberal MP Stephen Fuhr emphasized the government’s focus on boosting the Canadian industrial sector while increasing defense spending significantly.
Both the German and South Korean submarine proposals have received approval from the Royal Canadian Navy. The final decision will be based on factors such as cost, delivery schedule, and the potential economic benefits each bidder can offer domestically.
Fuhr, who serves as the secretary of state for defense procurement, stressed the importance of stimulating the Canadian economy through defense spending. The government aims to safeguard existing jobs, particularly in industries impacted by U.S. tariffs, and create new employment opportunities.
Prime Minister Mark Carney announced that Canada will choose between ThyssenKrupp Marine Systems from Germany and Hanwha Ocean Ltd. from South Korea for the submarine contract, valued at over $20 billion. The new submarines are expected to be delivered in the mid-2030s, impacting Canada’s military and industrial relationships in Europe and Asia for years to come.
Carney has committed to meeting NATO’s defense spending target, with a significant investment in the Canadian Armed Forces. Fuhr emphasized that future defense acquisitions, including munitions, surveillance aircraft, drones, and naval vessels, will also prioritize economic benefits for Canada.
The planned increase in military spending poses challenges due to the current centralized procurement process, which involves multiple government departments. Fuhr acknowledged the need for reforms to ensure efficient and timely decision-making in defense procurement.
Both the German and South Korean consortiums have proposed building submarine maintenance facilities in Canada, contingent upon government direction and additional investment. The submarine proposals differ significantly in size and capabilities, with both bidders offering advanced diesel-electric attack submarines designed for extended underwater operations.
The South Korean proposal is estimated to cost between $20 billion and $24 billion for 12 submarines, with a delivery timeline that aligns with the retirement of Canada’s existing submarines. The Germans have also indicated their readiness to supply submarines within the specified timeframe, highlighting the competitive nature of the bidding process.