Prime Minister Mark Carney announces that Canada has picked Germany’s TKMS to build 12 submarines for its navy, at HMC Dockyard in Halifax, on Monday.Ingrid Bulmer/Reuters
The South Korean bidder, Hanwha, backed by its government, promised to put money into a Canadian steel plant and put commercials on TV. Germany’s TKMS proposed later subproduction in Canada and lined up Canadian subcontractors.
Somewhere in there, on top of the bidding war for highly exaggerated “economic benefits,” was a choice between two top-notch diesel submarines, a key future platform for the Royal Canadian Navy. The rest was geopolitics.
This wasn’t just about the kit. It was the most public and overt you-scratch-my-back competition for industrial partnership and geostrategic alliances in modern Canadian history.
And that’s increasingly the way Canada’s big military-procurement decisions are going to be made. Major military purchases are – and will be – assets to be used in bargaining for economic deals and forging new defence-industrial partnerships.
You don’t have to look too far to see it. It took the feds an unusually short two years to choose a European supplier for up to a dozen subs – billed as the biggest military procurement in Canadian history. That’s at a time when the purchase of American-made F-35s – first identified as Canada’s next fighter jet in 2010 – is under a pretend “review” because of U.S. tariffs. It’s a good thing the U.S doesn’t make diesel subs, or the decision might have been tied up in trade talks.
Canada picks Germany’s TKMS over South Korea’s Hanwha to build submarine fleet
For those who have followed Prime Minister Mark Carney’s foreign policy, it shouldn’t come as a surprise that when it came time for the federal government to choose a submarine supplier, it chose the European bidder.
Mr. Carney has gone around the world looking for trade and investment. But his geopolitical leanings have tilted heavily to Europe.
He often joins leaders of major European countries in foreign-policy statements on issues such as Ukraine and the Middle East, and has signed Canada up for the European Union’s SAFE military-procurement financing mechanism. Canada is also slated to host the proposed Defence, Security and Resilience Bank for North Atlantic Treaty Organization allies.
After all that, it would have seemed strange to choose the non-European, non-NATO bidder for one of Canada’s biggest military purchases. Particularly when Mr. Carney is on his way to this week’s NATO leaders’ summit in Ankara, Turkey.
Most of the European leaders he will see there are dealing with some shared problems – the demand from U.S. President Donald Trump that they beef up military spending, even as he imposes trade tariffs and threatens more. They all need other allies and defence-equipment suppliers and customers.
On Monday, Mr. Carney talked about the need for middle powers such as Canada to build “strategic autonomy through partnerships amongst the like-minded” – in other words, non-U.S. democratic allies.
Canada has chosen Germany's TKMS for its submarine fleet. Here are its existing partnerships
The Canadian government could have looked elsewhere. Choosing Hanwha would have symbolized a look to a Pacific future and promoted a security partnership with South Korea, which was keen to break into the market of NATO militaries.
But when it comes to diversifying security partnerships, Mr. Carney’s first instinct is to look to Europe, to the other non-U.S. NATO allies.
When he sang the praises of the TKMS submarines, the Prime Minister emphasized that they are “maximized” for the Arctic – which he referred to as NATO’s western flank – and that they are “fully NATO interoperable.”
Carleton University professor Philippe Lagassé said there are already existing structures for NATO allies to work together, and working with a South Korean submarine supplier would have novel complications. Working with familiar allies might have been a factor, he said.
“Is it that Carney’s an Atlanticist? I’m sure he is,” Prof. Lagassé said. “It’s also so much easier.”
One way or another, this was quite visibly a procurement that wasn’t just about the submarines. The two bidders, and their governments, lobbied hard. Mr. Carney talked a lot about the deal supporting jobs and investment in Canada, as well as the country’s strategic autonomy.
Economics and geopolitics are explicitly part of the calculus of military procurements. Mr. Lagassé said the military procurement system is being rewired to support that.
That’s international politics. Big military contracts are an asset that can be leveraged. But it will cause tension with other priorities, namely getting the best equipment for the Canadian Armed Forces at the best price. Mr. Lagassé suspects the senior military officers aren’t going to like it.
“I think that’s going to be the big struggle between the CAF and the government in coming years,” he said.