The South Korean Navy's Shin Chae-ho, KSS-III Dosan Ahn Changho class submarine in the waters off Busan, South Korea, September, 2025. A KSS-III sub will arrive at Canadian Forces Base Esquimalt in late May before taking part in a joint naval exercise with Canada in June.Kim Hong-Ji/Reuters
Both South Korea and Germany are making final pitches for a lucrative contract to build 12 submarines for Canada, with Berlin dispatching its defence minister for another visit to Ottawa and the Koreans sailing their offered vessel 14,000 kilometres for a ship visit to Victoria.
Prime Minister Mark Carney has said he expects to make a decision by the end of the second quarter of 2026 – which would mean the end of June – on what will be among the biggest military procurements in Canadian history.
Defence analysts have said the total value of the submarine contract could be $60-billion to $120-billion over the vessels’ full life cycle, including $24-billion to $30-billion for the acquisition itself.
The race is down to two bidders: South Korea’s Hanwha Ocean and Germany’s TKMS. Hanwha’s offer to Canada is the KSS-III Batch-II submarine, while TKMS, as part of a joint German-Norwegian project, is offering the 212CD. Both are diesel-electric submarines.
The South Korean navy’s Dosan Ahn Changho – a KSS-III sub – set sail from Jinhae Naval Base on March 25 and will arrive at Canadian Forces Base Esquimalt in late May before taking part in a joint naval exercise with Canada scheduled for June.
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The KSS-III submarine picked up two Royal Canadian Navy submariners when it stopped in Hawaii on May 7 while en route to CFB Esquimalt in Victoria.
A decision about the submarines is as much about foreign policy as defence, now that Mr. Carney is looking to greater trade and ties with Europe and Asia as a way to reduce reliance on the U.S., which has launched a damaging trade war on Canada.
The sheer size of the sub deal, and the long life cycle of the subs, will create a long-term partnership with the winning country spanning close to 70 years.
German Defence Minister Boris Pistorius is scheduled to visit Canada in the last week of May, when the defence trade show CANSEC takes place in Ottawa. His previous visit was 2025.
His trip comes shortly after Germany’s Vice-Chancellor and Federal Minister of Finance Lars Klingbeil visited Canada earlier this month and talked up the TKMS offer.
Korea is planning to send a senior government delegation to Canada in the weeks to come, two sources say, to promote the overall economic relationship between the two countries. One of the sources said this delegation might include Kang Hoon-sik, chief of staff to President Lee Jae Myung. The Globe is not identifying the sources because they were not authorized to speak publicly on the matter.
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The Canadian government last month extended the bidding process to pick a submarine builder so Hanwha and TKMS could sweeten their bids.
The move was an acknowledgment that Ottawa wasn’t satisfied with the economic and industrial benefits promised in the bids submitted ahead of the original March 2 deadline.
Hanwha, which had previously said its proposal would deliver more than $60-billion in economic benefits to Canada between 2026 and 2044, boosted pledged benefits to $70-billion in its final submission, one of the sources said.
One of the South Korean company’s latest pledges was to build industrial and military vehicles in this country with Canadian auto parts and workers.
Germany’s TKMS has said it’s confident its proposal delivers significant value for Canada’s industrial, economic and strategic priorities. The company said the bid is the product of effort it and Canadian partners have invested in collaboration agreements.
The TKMS proposal includes co-operation with Bombardier Inc., investments in raw materials and a partnership that spokesperson Nils Beyer has said “extends beyond traditional procurement models” to support “Canada’s long-term sovereignty and capability objects.”
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The Germans and TKMS are expected to release more information about the benefits flowing from the German-Norwegian submarine proposal in the coming weeks.
The submarine order is the centrepiece of an effort by Mr. Carney’s government to demonstrate it is boosting defence spending to meet the expectations of NATO allies – and, equally importantly, to demonstrate that Ottawa is using military procurement to expand Canada’s industrial base.
Seoul is putting on a full-court press to win what would be a milestone military contract for the Asian country, which has set itself the economic objective of building the fourth-largest defence industry in the world. It ranked among the top 10 defence exporters between 2020 and 2024, according to Stockholm International Peace Research Institute.
Canada’s planned submarine purchase will be transformative for this country’s military might, marking the first time in history the Royal Canadian Navy will have more than a token presence underwater. Canada hasn’t purchased unused submarines since the 1960s, during the Cold War, and has never ordered anywhere near 12 at once. Canada currently has four second-hand subs, but only one is operational.
Germany enters the Canadian submarine competition with the deepest export résumé in the conventional submarine business. TKMS has sold boats to dozens of navies.
South Korea’s record is thin by comparison. Hanwha Ocean has exported submarines to one country: Indonesia. Canada would be its first Western customer.