Canada selects German firm for 12-submarine fleet contract

The Canadian government selected German defense company TKMS to build a new fleet of 12 conventionally powered submarines with under-ice capabilities. The government will now enter contract negotiations that could take several months.

Contract details The multi-billion-dollar procurement is one of Canada's largest military acquisitions. TKMS competed against South Korea's Hanwha Ocean for the contract. The new submarines are intended to replace the country's Victoria-class vessels, purchased in 1998. Officials said the fleet will support maritime sovereignty, particularly in Arctic waters.

Spending commitments Canada has raised defense spending to 2 percent of GDP since Carney took office and has set a target of 5 percent by 2035. The submarine project forms part of that broader increase. Carney said the contract will also build Canadian industrial capacity.

TKMS described its bid, developed with Norway, as a low-risk, NATO-aligned solution that includes shared maintenance and training. David Perry, president of the Canadian Global Affairs Institute, said the award gives Carney credibility on defense spending and will allow three submarines to be reliably operational at any time, compared with one occasionally operational vessel in recent years.