Canada picks German firm for record submarine deal ahead of Nato summit

Canada picked Thyssenkrupp Marine Systems as the preferred supplier for up to 12 submarines on Sunday, beginning negotiations for what Canada called the largest defence procurement in Canadian history. The announcement at Canadian Forces Base Halifax came as Mark Carney prepared to leave for the NATO summit in Ankara, Turkey.

Canada expects to conclude contracting no later than the end of 2027, with the first four submarines scheduled for delivery in 2034. If talks with TKMS break down, Canada can turn to Hanwha Ocean as the reserve supplier, ending a competition that had narrowed to Germany’s Type 212CD design and South Korea’s KSS-III.

The decision reflects a harsher security environment, not just a fleet replacement. Canada reached 2% of defence spending for the first time since the fall of the Berlin Wall and secured more than 20 defence and security partnerships in a year. The Arctic is warming nearly three times faster than the global average, a trend adversaries are seeking to exploit.

Only one of the Royal Canadian Navy’s four Victoria-class boats is seaworthy. The new submarines will give Canada surveillance and sovereignty coverage across the Arctic, Atlantic Ocean and Pacific Ocean, with added capacity for undersea surveillance, special forces deployment and NATO interoperability. The TKMS 212CD design is one of the stealthiest submarines in the world because of its ultra-low acoustic and magnetic signatures.

The project is being advanced by the Defence Investment Agency and fits within Canada’s Defence Industrial Strategy under the Build-Partner-Buy framework, aimed at producing economic and industrial benefits at home while working with trusted allies. A Stimson Center brief valued the bid at more than CA$60 billion before lifecycle and related costs, while broader estimates put the 30-year total at above $100 billion. Germany pledged to deliver four Type 212-CD submarines by 2036, and the German offer included billions in proposed industrial investment.