Mark Carney said Canada has chosen ThyssenKrupp Marine Systems to build 12 submarine boats after a tight contest with Hanwha Ocean. He announced the decision on Monday, setting up negotiations that must still turn the selection into a final contract.
The order is estimated at more than US$12bn and could climb past US$70bn once roughly half a century of maintenance is included. For the Royal Canadian Navy, it means replacing four Victoria-class submarines bought secondhand from Britain in 1998, three of which are now undergoing maintenance.
Carney in Kiel and Geoje
Carney visited TKMS's building facility in Kiel, Germany, last year and toured a newly built submarine at Hanwha's facility in Geoje, South Korea. The two bids had already been identified as suitable for Canada's military needs, with the TKMS 212CD model and Hanwha Ocean's KSS-III Batch-II submarine each under review before Monday's decision.
Canada and TKMS still have to negotiate and finalize the contract, and the process could take years. A reader watching the program today knows the winner, the size of the order, and the company that lost the race — but not yet the exact terms that will govern construction, maintenance, and delivery.
Victoria-class and the Arctic
The new boats are meant to replace an aging fleet and strengthen Canada's reach in the Arctic and the Northwest Passage. German officials had repeatedly pointed to Nato compatibility during the bidding, while Hanwha promoted its offer with millions spent on an ad campaign that included a voiceover from Peter Mansbridge.
Canada has also said it is open to making larger purchases from European contractors, and Carney's Liberal party has committed to increasing government defence spending to 5% of GDP by 2035 after Canada recently said it had reached 2% of GDP in defence spending. For the Royal Canadian Navy, the immediate question is no longer which bidder won, but how long the next stage of negotiation will take before the first steel is cut.
