Canada’s Submarine Deal: Korea and Germany in Final Showdown
Canada is poised to produce a decision on a multi-billion dollar contract to replace its aging Victoria-class submarines, with bids from South Korea’s Hanwha Ocean and Germany’s TKMS (ThyssenKrupp Marine Systems) under intense scrutiny. The competition, valued at over $20 billion , will determine Canada’s naval capabilities and industrial partnerships for decades to arrive.
The Bids: Hanwha Ocean vs. TKMS
Both Hanwha Ocean and TKMS submitted their final proposals on March 2, 2026, with a decision expected as early as June . The Canadian government plans to acquire up to 12 submarines to modernize the Royal Canadian Navy’s undersea fleet.
Hanwha Ocean is offering the KSS-III CPS, a submarine based on the KSS-III Batch II currently in operation with the South Korean Navy . TKMS, formerly ThyssenKrupp Marine Systems, is proposing its Type 212CD class submarines, slated for deployment to the Norwegian and German navies starting in 2029 .
Hanwha Ocean’s Accelerated Timeline and Industrial Benefits
Hanwha Ocean has proposed delivering the first submarine in 2032, with four vessels delivered by 2035 . This timeline is approximately two years faster than Germany’s projected delivery schedule of at least two submarines by 2034 .
The Hanwha Ocean-led consortium, including HD Hyundai Heavy Industries, has as well presented an investment plan linked to the order, projecting an average of 25,000 jobs per year from 2026 to 2044, with investments spanning steel, artificial intelligence, and space industries . Hanwha Ocean has already established partnerships with several Canadian companies to collaborate on submarine-related work, regardless of the bid outcome .
Project Scope and Background
The Canadian Patrol Submarine Project (CPSP) aims to replace Canada’s four Victoria-class submarines, originally acquired from the British Navy in 1998 . The project envisions the introduction of 8 to 12 fresh, state-of-the-art 3,000-ton diesel-powered submarines capable of long-range patrols in the Atlantic, Pacific, and Arctic oceans . The total cost of the project is estimated to be up to 60 trillion won (approximately $44 billion) .
Both Germany’s TKMS and South Korea’s Hanwha submitted their final bids to win the contract before the March 2 deadline .