Defense industry: Canada orders submarines from German manufacturer TKMS

The Thyssenkrupp armaments subsidiary TKMS has been awarded a contract by Canada to build up to twelve Submarines receive. Canadian Prime Minister Mark Carney announced this during a visit to a military base in Halifax, eastern Canada. TKMS thus prevailed against the South Korean company Hanwha Ocean. Carney did not provide any information about the costs. The dpa news agency reported that the order volume for the submarines, including service, is expected to amount to around 20 billion euros.

About the possible deal between Canada and TKMS had already been consistently reported by several media outlets. The company’s shares temporarily climbed by almost 13 percent to their highest level in almost four months. For TKMS, it is the largest submarine order in the company’s history.

Merz sees the decision as “a strong sign”

Chancellor Friedrich Merz (CDU) welcomed Canada’s decision. In doing so, the Canadian government is sending “a strong signal of transatlantic and European cooperation in the defense industry.” The order is an “expression of our long-term partnership, which extends far beyond security and defense policy,” said Merz. Foreign Minister Johann ​Wadephul (CDU) spoke on Platform X of a strong signal of cohesion in the transatlantic alliance. Canada has chosen the best conventional submarines in the world.

Defense Minister Boris Pistorius (SPD) also made positive comments. The future submarine fleet, which will also be operated by Norway, is an essential pillar in NATO’s strategy to secure the Far North and a visible contribution to burden sharing within the alliance. At the same time, you shouldn’t sit back. “Now it’s about getting the contracts ready and getting the submarines into the water as quickly as possible,” said Pistorius.

The business with TKMS can still fail. Canada reserves the right to hold talks again with the South Korean manufacturer Hanwha if an agreement cannot be reached with TKMS, said Prime Minister Carney.

The German federal government had intensively promoted the business in recent months. During his visit to Canada in May, Pistorius praised TKMS’s “many years of expertise in submarines and submarine operations” as well as the “outstanding quality of its submarines.” The federal government had lured Canada with numerous other economic projects if the decision fell in favor of the German company. These ‌range from collaborations on raw materials to ‌approving a merger between two AI companies.

Submarines are to be built in Kiel and Wismar

Canada currently sources around 80 percent of its military supplies from the USA. However, the relationship has been heavily strained since US President Donald Trump’s second term in office. In addition to tariffs, Trump’s demand for Canada’s integration into the USA is also straining relations between the countries. Cooperation in a defense council between the two countries was suspended last May.

Canada receives Type 212CD submarines from TKMS. Germany and Norway developed this model for joint use. The identical design of the submarines is intended to reduce costs and enable easy cooperation, which Canada now joins as the third major partner. TKMS spoke of the “beginning of a new chapter in defense cooperation between three close NATO allies, bringing together common expertise and common security interests.”

The submarines are to be built at the TKMS headquarters in Kiel and in the second shipyard in Wismar. The company wants to create up to 1,500 jobs there. The first submarine from the deal should be delivered by 2033, TKMS said.