A look at the race to replace Canada’s rapidly aging fleet of submarines – National

The contest to supply Canada with its next fleet of submarines heated up this week, as Ottawa narrowed down the competition to just two suppliers: a Korean company and a German one.

Here’s a look at where the massive procurement project currently stands.

1. Why does Canada need to buy new submarines?

Canada is racing to replace its deteriorating fleet of Victoria-class submarines. The fleet, bought second-hand from the U.K. in 1998, is rapidly aging and are expensive to repair and replace parts.

Prime Minister Mark Carney has repeatedly pointed out that the country currently only has one working submarine.

The fleet will need to be retired in the mid-2030s. Ottawa set a deadline of getting its first new sub by 2035, when the Victorias will likely all have been decommissioned.

That, and other countries may also decide to purchase subs, which could send Canada to the back of the line and delay their arrival.

Former prime minister Justin Trudeau announced the massive sub procurement project at the NATO summit in Washington in 2024 amid intense pressure from allies for Canada to ramp up its defence spending and meet the alliance spending commitment it has never achieved.

A fleet of submarines would rocket Canada past its defence spending commitment of shelling out more than 2 per cent of GDP annually.

Suppliers have not been told how many submarines Ottawa is considering.

At the NATO summit a year ago, senior officials from the Prime Minister’s Office had emphasized Ottawa was looking for “up to” 12 subs. That still appears on official documents, but increasingly, government officials are dropping that qualifier when talking in public about purchasing a fleet of 12 subs.

2. Who is bidding to supply Canada?

Carney announced in Berlin on Aug. 25 that Ottawa has narrowed the competition, or “downselected,” to just two firms.

One of the two finalists is Hanwha Oceans, which makes the KSS-III submarine at a shipyard in Geoje, South Korea. It’s used by the Republic of Korea Navy and runs on lithium ion batteries. The company is vying to quickly become a top global defence supplier.

Hanwha’s hard sell is how quickly it can supply Canada with vessels. If it gets a contract by next year, the company has said it can deliver its first sub by 2032, a total of four subs by 2035 and then another sub each year. The company has yet to export one of these new subs to another nation.

Its competition is ThyssenKrupp Marine Systems, or TKMS, an established submarine maker that supplies the vast majority of NATO’s conventional submarine fleet.

It’s pitching Canada on the new 212CD subs which it is manufacturing for the German and Norwegian navies. They run on hydrogen fuel cells and diesel engines and are based on the older 212A, used by Germany and Italy.

TKMS’ hard sell: interoperability and resource-sharing with NATO allies, who will use the same subs.

Germany and Norway already have orders for 12 in the queue. If Canada joined it wouldn’t be stuck at the back of the line but would have to work out agreements with both the company and the other customers about delivery dates.

The company says it can meet Canada’s tight 2035 deadline for delivering the first of the subs. Its presentation this past week to Canadian officials showed first delivery in 2034 and a second one by 2037.

The model of sub it’s pitching Ottawa, however, has not yet been deployed in action.

3. What is Canada looking for from the purchases?

While the procurement comes with the decidedly unflashy name of the “Canadian Patrol Submarine Project,” government documents specify that stealth and lethality are key capabilities the Navy wants the subs to have.

Canada’s last major defence policy update “Our North, Strong and Free” singles out protecting the Arctic as a priority, as Russia builds up its military presence there and climate change creates new problems for national security.

The Royal Canadian Navy is looking for a fleet of subs with under-ice capabilities as it eyes stepped up presence in the Arctic and the ability to track and deter threats, and if needed engage in combat.

“In Canada, submarine means weeks under the sea ice, as well as in the Pacific,” Carney said in Berlin this past week. “We need to be able to have year-round fleets on all three coasts under quite demanding conditions, so that’s how the field narrows quite quickly.”

Carney has also said Canada needs to see a return to the domestic economy when the country opens up its wallet for such a large purchase.

Hanwha reportedly offered establishing maintenance facilities on both coasts, while TKMS has said it wants to involve all three major Canadian ship yards.

4. How much will the new subs cost?

This is expected to be the largest defence procurement project in decades. The government has not put a price tag on how much exactly it’s looking to spend on submarines, nor has it given potential suppliers a range or a price ceiling.

They could cost to the tune of tens of billions to acquire, depending on how many subs Canada ultimately decides it wants.

Ottawa has not answered questions in part because it plans to negotiate with suppliers.

But this procurement also follows the F-35s stealth jets purchase, which very recently embarrassed Ottawa when they came in at $27.7 billion — far more than initial estimates of $19 billion.

At one point last year, Trudeau had suggested Canada might shop around for nuclear subs, which can stay underwater for much longer periods of time. Experts expressed doubt and it quickly became obvious that Ottawa was not interested in that kind of commitment.

Nuclear subs are significantly more expensive — billions more — and can be demanding acquisitions with steep repair costs due to their complexity. They would also likely need to be serviced elsewhere, probably in the U.S.

5. What are the next steps?

Ottawa will enter into intense discussions with both competitors. It will have to choose whether to issue a formal request for proposal, or to go directly into negotiations.

Vice-Admiral Angus Topshee, head of the Royal Canadian Navy, has said it’s possible for Ottawa to decide on one by the end of the year, if it moves aggressively.