12 Submarines: Why Canada Is Turning to Germany's TKMS
Last updated: July 6, 2026, 2:33 p.m.
12 submarines could reshape the Royal Canadian Navy for decades. Prime Minister Mark Carney is expected to name Germany's TKMS as Canada's preferred bidder, putting a German-Norwegian partnership ahead of South Korea's Hanwha Ocean in one of the country's largest defence procurements. The decision is not a signed contract: it opens negotiations over a fleet whose lifetime cost could exceed $100 billion.
The Bottom Line
- Canada is expected to choose TKMS as the preferred bidder for a fleet of up to 12 submarines.
- The German Type 212CD proposal beat South Korea's KSS-III bid in the reported selection.
- Negotiations must still produce a final contract; a preferred bidder does not guarantee a completed deal.
- TKMS says it can deliver four submarines between 2032 and 2036, while Canada's current Victoria-class boats are due to leave service by 2035.
- The choice strengthens defence ties with Germany and Norway but removes a proposed $345 million Hanwha investment tied to Algoma Steel.
Breaking It Down
Ottawa narrowed the competition to two qualified bidders in August 2025: TKMS with its Type 212CD and Hanwha Ocean with the KSS-III. Both were judged capable of meeting the navy's high-level requirements, so the contest increasingly turned on delivery schedules, industrial benefits and the wider strategic relationships attached to each offer.
Hanwha made the louder public pitch. It promoted an aggressive delivery schedule, sent a submarine to Canada and tied its proposal to major Canadian investments. Its commitments included $345 million for a new structural steel beam mill at Algoma Steel in Sault Ste. Marie, where about 1,000 workers had been laid off. Ottawa had previously said a new mill could help rehire up to 500 workers by the end of 2026.
TKMS built its case around NATO interoperability and a common fleet with Germany and Norway. The same 212CD model is being purchased by those two allies, creating the possibility of shared training, maintenance and future development. The German-Norwegian bid also carried large economic promises, including estimates of $86 billion in Canadian GDP benefits and more than 650,000 job-years over the life of the project.
The speed of the process has also drawn attention. Defence analyst Dave Perry described the reported selection as a major step toward rebuilding Canada's underwater capability and said the procurement had moved unusually fast for a project of this size.
The selection today of TKMS as the preferred bidder is a huge step forward to acquire Canadian naval capability.
Why This Matters
Canada currently owns four Victoria-class submarines, but only one is considered fully operational. The boats are expected to retire by 2035, creating a narrow window to prevent a gap in submarine capability. TKMS has said it can deliver four submarines by 2036, with other reporting placing the first deliveries between 2032 and 2036.
A 12-boat fleet would give the navy a far larger underwater presence than Canada has historically maintained. Military planning cited in the source material assumes only one of every three or four submarines is available for active deployment while others undergo maintenance or training. With 12 boats, Canada could keep roughly three submarines ready to operate across its Atlantic, Pacific and Arctic approaches.
For Canadians, the consequences are both strategic and economic. The procurement would shape defence spending, naval staffing and industrial policy for decades. The reported TKMS choice also creates immediate regional losers: Sault Ste. Marie no longer has the Hanwha submarine bid as the pathway to the proposed steel mill and related rehiring.
The Hanwha bid had a clear northern Ontario benefit to it in terms of the money that was going to go to Algoma Steel. That's unfortunate for the region for sure.
What Comes Next
Carney is expected to announce the decision in Halifax before travelling to a NATO leaders' summit in Turkey. Stephen Fuhr, the secretary of state for defence procurement, is also expected to make an announcement in Esquimalt, B.C.
After that, Ottawa and TKMS are expected to enter months of negotiations covering price, delivery, maintenance and industrial benefits. Until those talks conclude, the final contract value, exact delivery schedule and detailed Canadian work package are not settled.
FAQ
Has Canada officially signed a submarine contract with TKMS?
No. TKMS is expected to be named the preferred bidder, which starts final negotiations rather than guaranteeing a signed contract.
How many submarines does Canada plan to buy?
Canada plans to acquire up to 12 new submarines to replace its four Victoria-class boats.
Which submarine is TKMS offering Canada?
TKMS is offering the Type 212CD, the same model being purchased by Germany and Norway.
How much could Canada's submarine program cost?
Estimates in the source material range from roughly $20 billion to $30 billion for the submarines themselves, while lifetime support could push total costs above $100 billion.
When could the first new submarines arrive?
TKMS has said four submarines could be delivered between 2032 and 2036. Canada's current fleet is expected to be retired by 2035.
Why did the German bid matter for NATO cooperation?
Germany and Norway are buying the same 212CD model, which could support shared training, repairs and other forms of military interoperability.
Resources
Sources and references cited in this article.