OTTAWA — The federal government has selected Germany’s Thyssenkrupp Marine Systems (TKMS) as its preferred bidder to build Canada’s next fleet of submarines, according to a report by The Globe and Mail citing two sources familiar with the decision.According to the report, Prime Minister Mark Carney is expected to formally announce the decision Monday in Halifax before departing for the NATO leaders’ summit in Turkey.The selection follows a competition between Germany’s TKMS and South Korea’s Hanwha Ocean to replace Canada’s aging Victoria-class submarines with a new fleet of 12 diesel-electric submarines.The Globe and Mail reported that the procurement is expected to be worth between $20 billion and $30 billion for the submarines themselves, with long-term operations, maintenance and upgrades potentially bringing the total value to between $40 billion and $50 billion.The newspaper reported the government will announce a preferred bidder rather than a finalized contract, with negotiations expected to continue before a formal agreement is signed..The submarine program forms part of Ottawa’s broader effort to modernize the Canadian Armed Forces and meet its commitment to increase defence spending to 5% of gross domestic product by 2035 under NATO targets.The Royal Canadian Navy currently operates four Victoria-class submarines acquired second-hand from the United Kingdom in the late 1990s, though typically only one is operational at any given time.The military has said a fleet of 12 submarines would allow Canada to maintain three deployable vessels while others undergo maintenance or training, significantly expanding its ability to patrol the Arctic and Canada’s Atlantic and Pacific coastlines.According to The Globe and Mail, Ottawa determined both Hanwha’s KSS-III Batch-II submarine and TKMS’s Type 212CD design met Canada’s operational requirements, with economic benefits becoming a key factor in the final decision.Hanwha had pledged more than $70 billion in trade and investment in Canada and said its proposal would support more than 25,000 jobs annually between 2026 and 2044.Germany, meanwhile, said its joint proposal with Norway would contribute an estimated $86 billion to Canada’s gross domestic product over the life of the project while creating more than 650,000 job-years of employment.The competition has been underway since 2025.
