Prime Minister Mark Carney climbs down a ladder into a submarine during a tour of the Hanwha Ocean Shipyard in Geoje Island, South Korea, in October.Adrian Wyld/The Canadian Press
Stephen Fuhr, Secretary of State for Defence Procurement, says Ottawa is still planning to select a single bidder to replace Canada’s aging fleet of submarines.
However, Mr. Fuhr said it’s possible that the government could split the contract once it has an opportunity to evaluate the bids from a German-Norwegian consortium and South Korea’s shipbuilding giant.
The Globe and Mail reported Monday that Ottawa is considering splitting the multibillion-dollar contract for 12 diesel-electric submarines by buying an equal number from Germany’s ThyssenKrupp Marine Systems (TKMS), in partnership with its Norwegian partner Kongsberg Defence & Aerospace, and Seoul-based Hanwha Oceans.
“Right now, our position is we’re buying 12 subs, and we’ve got two companies, really good companies,” he told the Conference of Defence Associations Institute on Thursday. “We’re going to evaluate those and based on the evaluation that the public service does on those, we’ll make a decision on how we move forward.”
Opinion: Canada’s submarine conundrum: Buying a few boats is harder than it looks
Mr. Fuhr added that “things can change,” but “right now, I’m aware of one partner [getting the contract].”
The companies bidding for the contract, worth up to $24-billion, told The Globe on Tuesday that they would support any decision by Ottawa to split the contract.
Final proposals for the contract were submitted to the federal government on Monday. A decision is expected later this year.
Mr. Fuhr would not be pinned down on whether the decision will be made by June, a timeframe that has been widely mentioned. The decision is a test case for how quickly the government can approve large defence-equipment purchases.
“The political arm is removed at this stage. So, the bureaucracy is going to go through those procurement returns, and they’ll take as long as they take,” he said.
The Commander of the Royal Canadian Navy, Vice-Admiral Angus Topshee, told the same audience that it would be more efficient to have a fleet from one provider.
Submarine bidders open to Ottawa splitting contract, say procurement speed setting new standard
The final bids submitted by the two contenders range from around 1,000 to 1,500 pages each. Over the next four to six weeks, federal government officials will be busy reading them and returning to the companies with questions.
The new modern fleet of submarines would replace the navy’s current aging fleet of second-hand Victoria-class boats.
Two senior government sources told The Globe that one option under consideration is for Ottawa to buy six Type-212CD submarines to be built by Germany’s TKMS. Those submarines would patrol the Atlantic Coast, the sources said. Ottawa would also acquire six Hanwha KSS-III Batch-II submarines. The sources say those submarines would be located on the Pacific coast and could be deployed to the Indo-Pacific region.
The Globe is not identifying the two government sources, who were not authorized to discuss details of the competition.
Part of Hanwha’s pitch is that some of its submarines are already built and in the water. Additional submarines are currently being built. The TKMS submarines are not yet in the water, although construction has started.
Hanwha said it could deliver the first boat by 2032 and four additional boats by 2035. TKMS has said the company could deliver its first submarine well in advance of 2035.
Defence experts have raised concerns that splitting Ottawa’s submarine contract could complicate supply chains and parts inventories. In September, Prime Minister Mark Carney also raised doubts about a mixed fleet, saying you get “many efficiencies in economies of having one fleet.”
The two government sources said Ottawa will assess the bids, including whether to split the contract, on the basis of what best serves the country’s economic and military needs.
Canada’s submarine choice could break tradition, embrace South Korea in Indo-Pacific shift
A final decision will involve more than just acquiring new submarines. Mr. Carney is looking for greater trade and economic ties with Europe and Asia as a way to reduce reliance on the United States.
The sources say the benefit of splitting the contract is that Canada would reap industrial benefits from both bidders, including possible investments in this country’s auto industry. Canada’s auto sector has been hit hard by U.S. President Donald Trump’s tariffs, as have the country’s steel and aluminum industries.
Both Hanwha and Germany’s TKMS are trying to make their proposals more attractive by increasing their commitments to benefit Canada, including local jobs and manufacturing and supply contracts.