Mark Carney Names ThyssenKrupp Marine Systems Preferred To Build Canada’s Submarine Fleet

Prime Minister Mark Carney announced dockside in Halifax on Monday that German shipbuilder ThyssenKrupp Marine Systems (TKMS) is Canada’s preferred choice to build the navy’s new fleet of submarines, a multibillion-dollar defence program expected to be the largest in the country’s history.

“German shipbuilder ThyssenKrupp Marine Systems (TKMS) is Canada's preferred choice to build the navy's new fleet of submarines — a multibillion-dollar defence program that is expected to be the largest in the country's history”

CBC

Carney said the federal government will enter into negotiations with TKMS to sign a contract, a process that will take several months, and he framed the decision as industrial capacity, saying, "This project is about much more than acquiring submarines. It builds Canadian industrial capacity,".

CBC

The decision ends long-running speculation about the highly contested program, with the joint German-Norwegian bid chosen over South Korea’s Hanwha Ocean, and Carney said there was hard bargaining ahead.

A senior federal official speaking on background aboard the prime minister’s plane en route to Halifax said they hope to conclude a contract by next year, while Carney added that if negotiations with TKMS are unsuccessful, Canada retains the right to designate Hanwha’s KSS-III as the preferred supplier and enter negotiations with them.

The submarine deal is expected to be one of the highlights of Canada’s presentation at the NATO summit in Ankara, Turkey, where Secretary General Mark Rutte told allies they are expected to show up with a plan to meet the defence spending benchmark and military capabilities.

The Associated Press story carried by The Seattle Times said Canada named TKMS as the preferred supplier for up to 12 submarines, with Carney calling the procurement “the largest in Canadian history” and saying the TKMS platform is optimal for Arctic waters and for NATO.

Carney said the procurement will involve “tens of billions of dollars” in investment, and he declined to disclose the price, while Germany Chancellor Friedrich Merz said, "This is a strong signal for our transatlantic and European partnership,".

Infodefensa

The Seattle Times reported that Carney pledged to raise defense spending to 5% of gross domestic product by 2035 after Canada reached NATO’s previous 2% spending target this year, and that his fiscal plan already provides for defense spending to reach 4% of gross domestic product by 2030.

Carney also said Germany and Norway will free up production slots to speed deliveries, allowing Canada to receive four submarines by 2034—two years earlier than TKMS had publicly projected—while the new fleet will replace Canada’s four aging Victoria-class submarines purchased secondhand from the United Kingdom in the late 1990s.

In the same AP account, Carney said, “The sovereignty of our country, bounded by the three oceans and the world’s longest coastline, depends on our maritime capabilities,” linking the submarine choice to Canada’s ability to operate in its maritime environment.

While the preferred-supplier decision moves Canada into negotiations, the Globe and Mail’s opinion piece said the contract is expected to be worth tens of billions and could reach up to $100-billion once operations, maintenance and upgrades are included, as Ottawa seeks submarines that will operate well into the second half of this century.

“Perhaps inspired by last November's visit by the Swedish delegation that came to sing the praises of Saab's Gripen fighters, the national flagship, a sizable South Korean delegation was in Canada this week to sign several industrial agreements and try to woo Ottawa”

Le Devoir

The Globe and Mail said the new fleet will replace the Royal Canadian Navy’s four aging submarines bought second-hand from Britain almost three decades ago, and it described Ottawa’s choice of TKMS as emphasizing NATO interoperability and strengthening long-term defence and industrial relationships with Europe.

The same analysis stressed that selecting TKMS as preferred bidder does not guarantee a final contract, and it warned that Ottawa and Berlin must negotiate contractual, financial, and industrial arrangements before the acquisition is formally confirmed.

In parallel, CBC reported that Carney signalled he’s committed to buy all 12 boats and said he set aside money in the federal government’s long-term fiscal framework, while also noting the possibility of switching to Hanwha’s KSS-III if negotiations with TKMS fail.

The Globe and Mail also framed the stakes as broader economic and strategic considerations, stating that the contest between South Korea and Germany for the submarine contract may yet resume if Canada sees an opportunity to get a better offer.