Canada has selected German defence company TKMS to construct the country’s next generation of naval submarines in what has been described as the largest military procurement project in Canadian history.
Prime Minister Mark Carney announced on Monday that the German firm had been chosen for the multi-billion-dollar contract to deliver 12 new submarines for the Royal Canadian Navy.
The announcement comes ahead of Carney’s trip to a NATO summit in Turkey, where member countries are expected to face increased pressure to demonstrate stronger commitments to defence spending.
Since assuming office, Carney’s administration has increased Canada’s defence spending to 2 percent of GDP and pledged to raise it further to 5 percent by 2035.
The Canadian government said the country’s current submarine fleet faces serious limitations, with only one out of every four existing submarines considered operational. Officials said the replacement programme is essential for protecting Canada’s vast coastline, especially as climate change opens up new opportunities for activity in Arctic waters.
Carney said the new submarine project would strengthen national security, protect Canadian interests and create opportunities for domestic industry.
The government has not disclosed the total value of the agreement but said negotiations with TKMS will now begin and could take several months before a final contract is completed.
TKMS, recognised as the world’s largest non-nuclear submarine manufacturer, defeated competition from South Korea’s Hanwha Ocean in the selection process.
The submarine acquisition forms part of Canada’s broader effort to expand military capabilities and strengthen maritime sovereignty, particularly in the Arctic region.
The move also comes amid pressure from United States President Donald Trump on NATO members to increase defence investment.
Canada began searching for a contractor for the submarine replacement programme in 2024 as it sought to replace its ageing Victoria-class submarines, which entered service after being acquired in 1998.
Defence analysts said the decision gives Carney greater credibility in his commitment to rapidly increase defence spending. David Perry, president of the Canadian Global Affairs Institute, described the timeline for the project as unusually fast by Canadian standards.
TKMS said its proposal, developed in partnership with Norway, would provide Canada with a NATO-aligned solution while supporting shared maintenance, repairs, training, logistics and operational cooperation.
The new conventionally powered submarines will feature under-ice capabilities and are expected to significantly improve Canada’s naval readiness by allowing more vessels to remain operational at any given time.
