OTTAWA — Canada is expected to choose between German and South Korean bids to build a fleet of 12 conventionally powered submarines by July 6, 2026. The contract for these submarines is valued at tens of billions of dollars.

Prime Minister Mark Carney is scheduled to tour a Canadian Armed Forces base in Nova Scotia on Monday and is anticipated to announce "new measures to make Canada more secure, resilient, and prosperous." A spokesperson for the Prime Minister declined to confirm if the submarine announcement would be made on Monday. Carney said in May that a decision would be announced within weeks.

ThyssenKrupp Marine Systems, a German-Norwegian consortium, and Hanwha Ocean are competing for the contract. ThyssenKrupp Marine Systems has supplied much of NATO's conventional submarine fleet. Last month, Hanwha Ocean showcased its KSS-III diesel-electric submarine in British Columbia. The KSS-III submarine completed the South Korean navy's first trans-Pacific crossing.

The proposals from both ThyssenKrupp Marine Systems and Hanwha Ocean state they would generate jobs and investment within Canada. Canada's current fleet comprises four Victoria-class submarines, which have limited operational capacity.

The Canadian government reached NATO's 2% defense spending benchmark this year and has committed to spending 5% of Canada's gross domestic product on defense by 2035. Following the scheduled events on Monday, Prime Minister Carney is set to depart for the NATO summit in Turkey.

Why It Matters

The pending decision on Canada's submarine fleet marks a major defense procurement for the nation, as it selects a partner for a multi-billion dollar contract to build 12 new conventionally powered submarines. This initiative aligns with Canada's increased defense spending, having recently achieved NATO's 2% defense spending benchmark and committing to raise it to 5% of GDP by 2035 to enhance security and resilience.