Ottawa advanced to the next step in the Canadian Patrol Submarine Project (CPSP) procurement by down-selecting Germany’s Thyssenkrupp Marine Systems (TkMS) and South Korea’s Hanwha Ocean Co., Ltd. The news comes after TkMS suffered a big setback in the Australian warship deal.
The announcement was made by Canadian Prime Minister Mark Carney on August 26 in Berlin, Germany.
The move has been characterised as a significant leap in Canada’s efforts to replace the Royal Canadian Navy’s (RCN) aging Victoria-class submarines with a new fleet of up to 12 diesel-electric submarines with under-ice capability.
Carney said that it was the process that helped determine that the two consortia met the exacting standards of the Canadian Navy.
“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 consortia, that they qualify,” he was quoted as saying by the Canadian media.
Five industrial designs were considered before the final decision was made. The other designs in the fray were Saab’s oceanic/extended-range A26, Navantia’s S-80 Plus, and Naval Group’s Blackfin Barracuda.
According to the official statement published by the Canadian government, the decision was based on an evaluation of the CPSP criteria, which included the new submarine flotilla’s construction and delivery schedules.
Canada also engaged with other governments and militaries to exchange lessons learned and to gain insights into their respective submarine acquisitions, infrastructure, and sustainment programs, the statement added.
The new submarines will “ensure that Canada can detect, track, deter and, if necessary, defeat adversaries in all 3 of Canada’s oceans,” read a government news release.
Established in 2021, the submarine acquisition project aims to maintain maritime sovereignty—particularly in the Arctic—and enhance the RCN’s capability to detect, track, deter, and defeat adversaries across Canada’s three oceans: Pacific, Atlantic, and Arctic.
This was also highlighted in the country’s defense strategy paper, ‘Our North, Strong and Free: a Renewed Vision for Canada’s Defence,’ which was released in 2024.
With the acquisition of 12 new submarines, the RCN would have one vessel available for deployment in each of the world’s oceans at any given time.
The statement further underscored the need to strengthen security in the Arctic region, which is rapidly becoming navigable due to global warming and the melting of glaciers.
The RCN must secure Canada’s vast coastline and offer “superior underwater surveillance capability” to safeguard the nation’s Arctic sovereignty, it added.
The development comes as Ottawa is rethinking its historically close defense and security relationship with the US in the wake of burgeoning tensions between the two allies.
Trump has openly called upon Canada to become the 51st state of the United States of America—an assertion seen as humiliating by officials in Ottawa. In addition to this, the US President launched a tariff war against its closest northern ally, upsetting their relationship.
Needless to say, the German and South Korean firms have seen an opportunity to exploit.
Notably, the German TkMS and Hanhwa were earlier in the running for India’s Project-75I submarine program. However, the South Korean giant later withdrew from the project, leaving Germany’s TkMS and Spain’s Navantia as the leading candidates. According to reports, TkMS appears to have been selected for the Indian program.
Recently, TkMS suffered a massive setback when Australia decided to acquire 11 Mogami-class frigates from Japan’s Mitsubishi Heavy Industries. It was touted as Japan’s largest defense export deal since World War II, amounting to $6.5 billion.
Japan Beats Germany To Win Australia’s $6.5B Warship Deal; Mitsubishi Hands Tokyo Biggest Defense Contract Since WW-2
A Fierce Contest To Unfold
Right after making the announcement in Berlin, Canadian Prime Minister Mark Carney flew north in a helicopter to Kiel to get a close-up view of one of the company’s manufacturing facilities, as reported by The Globe and Mail, a Canadian publication.
The Prime Minister reportedly spent fifteen minutes in a German-built 212-A class submarine that was being maintained while suspended on scaffolding.
He witnessed the construction of parts of one submarine and the completion of long-term maintenance of an older model that Canada has been offered.
As he emerged from the submarine tour, he said, “Sign me up,” as a joke with the navy officer who was with him. He was accompanied on the tour by Canadian Industry Minister Mélanie Joly and Defence Minister David McGuinty, as well as top security officials and advisers. Thus, indicating the importance accorded to the procurement.
Germany has launched a targeted campaign to win the contract, as evidenced by pitches made by TKMS leadership, as well as by German Chancellor Friedrich Merz.
The Chief Executive of TkMS, Oliver Burkhard, stated that the company is striving to be a good partner for Canada and that, should it be chosen, some of the manufacturing may occur in Canadian facilities. “The assumption is we build it here, but I mean, the customer is always right, right?” he said.
On the other hand, Merz said he had encouraged Carney to come see the TKMS facility. Pitching interoperability, he suggested that military allies should aim to procure the same submarines to enhance 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.”
Last March, Hanwha submitted a thorough, unsolicited offer to Canada for review. Hanwha Ocean and Hyundai Heavy Industries submitted a detailed, joint presentation worth US$20 billion to US$24 billion, promising to deliver not one but four KSS-III submarines by 2035, as previously reported by the EurAsian Times.
The KSS-III, a 3,700-ton diesel-electric vessel designed for stealth and endurance, is recognized for its advanced air-independent propulsion system, which enables extended submerged operations of up to three weeks.
Meanwhile, TkMS stated in an interview with CBS News that it had only responded to the federal government’s request for information, but had done so thoroughly.
From what we know, the Type 212CD design is a diesel-electric submarine with fuel-cell Air Independent Propulsion (AIP), which enables it to stay submerged for longer periods.
This submarine features a vertical launch system (VLS) for missiles, is capable of under-ice operations, boasts a non-magnetic hull for enhanced stealth, and has been proven in NATO operations, among other notable features. The acquisition of this submarine will offer the RCN an open architecture for integration with NATO.
Notably, the South Korean proposal had a price tag of $20 billion to $24 billion, depending on the federal government’s request.
In contrast, the TkMS’s Burkhard said he wouldn’t discuss dollar figures, but has not ruled out setting a manufacturing facility in Canada.
“If they want to demand for special, let’s say reasons to build them in Canada, we would also be able to do that because this is one of our success stories as TKMS,” he said. “We’re used to this model.” Additionally, he mentioned the possibility of technology transfer.
However, despite visiting the TkMS facility first, Carney emphasized that he intends to visit the Hanwha yard in South Korea this autumn and that he is dedicated to a fair and open contest. The contest, according to reports, is set to be fierce.
Earlier, the federal government was considering the acquisition of a nuclear submarine, which could have allowed the RCN to operate underwater for months. However, the government decided against it due to the very high cost.
Regarding the latest contest, the government has not provided a cost estimate for the acquisition, partly because the final supplier will be chosen through negotiations that include pricing and economic benefits to Canada.
