Canada shortlists German, South Korean companies for major submarines purchase

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Prime Minister Mark Carney announced Tuesday in Berlin that Canada has shortlisted two companies to compete on a multi-billion dollar contract to build up to 12 new submarines for the Royal Canadian Navy.

He then immediately took a helicopter ride north to Kiel for a first hand look at one of the company’s manufacturing facilities, where he spent 15 minutes in a German-made 212-A class submarine that was suspended in scaffolding for maintenance.

Germany’s ThyssenKrupp Marine Systems, or TKMS, makes the 212CD submarine, which is being developed for the Norwegian and German navies.

The company’s chief executive Oliver Burkhard said Tuesday that it is looking to be a good partner for Canada and opened the door to having some of the manufacturing take place at Canadian facilities, should it be selected.

“The assumption is we build it here, but I mean, the customer is always right, right?” he said.

The second shortlisted company is Hanwha Ocean Co., Ltd. of South Korea. Mr. Carney said he plans to visit their facilities in October.

The Prime Minister announced the shortlisting during a news conference with German Chancellor Friedrich Merz.

The Canadian government initially released an expression of interest process in September, 2024, asking companies to submit assessments of their ability to provide up to 12 submarines.

Mr. Carney said that process led the government to determine that two consortiums met what he said are the Canadian Navy’s demanding requirements.

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“Because in Canada, submarine means weeks under the sea ice, as well as in the Pacific at the same time. So we need to be able to have year-round fleets in all three coasts under quite demanding conditions. So that’s how the field narrows quite quickly. So it’s a testament to both of these companies, both of these consortiums, that they qualify,” he said.

In a news release, the government said the new submarines will “ensure that Canada can detect, track, deter and, if necessary, defeat adversaries in all 3 of Canada’s oceans.”

Mr. Merz told reporters that he had urged Mr. Carney to visit the TKMS facility. He also said military allies should aim to buy the same submarines as a way of increasing efficiency and interoperability.

“I campaigned for this, not necessarily from the point of view of German industry, but also from a perspective that we need to harmonize standards,” he said. “We have one sphere we want to secure and make safe, which is the northern Atlantic.”

The federal government previously ruled out buying nuclear-powered submarines that would have allowed Canada to operate for months underwater, but would have been considerably more expensive.

The Canadian military has said it needs 12 submarines to properly defend the country, based on the assumption that for high readiness, only one of four submarines would be fit to deploy, with others under maintenance or used for training.

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The government has not provided a cost estimate for the purchase, in part because price and economic benefits to Canada will be part of the negotiation process that will lead to the final selection of a supplier.

Defence analyst David Perry, president of the Canadian Global Affairs Institute, welcomed the government’s shortlist announcement. He said the need to replace Canada’s submarines is urgent, and a more traditional procurement process would have taken longer.

“The government obviously felt it already had enough information to take this step, so good to see them be willing to move ahead expeditiously,” he said in an e-mail.

Canada currently has a fleet of four Victoria-class submarines that were purchased from the British government in 1998, and delivered to Canada over a four-year period from 2000 to 2004. They will need to be replaced in the 2030s.

After his visit to Germany, Mr. Carney went to Riga, Latvia for the last stop of a four-country European tour that began in Kiev to mark Ukraine’s independence day.

There was also a light hearted exchange between the Canadian and Latvian leaders.

“You’ve had a very busy European tour. We are the fourth country,” said Latvian Prime Minister Evika Siliņa, during a joint news conference. “The Prime Minister has flown by plane, went by train, went by car, and the only mode of transport that he hasn’t used is a ship.”

Mr. Carney later pointed out that he was in fact in a ship a few hours earlier.

“I was on a ship today. Actually, I didn’t go anywhere. It was a sub that was stationary. But at least I’ve made it on a ship.”

With reports from Steven Chase and Nathan VanderKlippe