Canada has selected ThyssenKrupp Marine Systems as the preferred supplier for up to 12 new submarines. The multibillion-dollar project is militarily, economically and geopolitically significant: Ottawa wants to better protect its Arctic, strengthen NATO and become less dependent on the United States.
Canada’s Largest-Ever Defense Procurement
Canada is reshaping its defense policy. Prime Minister Mark Carney has selected ThyssenKrupp Marine Systems as the preferred supplier to build up to 12 new submarines. It would be the largest military procurement in the country’s history.
The deal has not yet been finalized. Canada and TKMS must now negotiate the final contract. But the direction is clear: the new submarines are intended to replace the aging Victoria class, which Canada acquired second-hand from the United Kingdom in the late 1990s. Of the four existing submarines, several are regularly in maintenance. For a country with coastlines on the Atlantic, the Pacific and the Arctic, that is a strategic problem.
According to international media reports, the project is worth tens of billions of dollars. The procurement value alone is estimated at more than 12 billion U.S. dollars, while long-term maintenance and operating costs could increase the total bill significantly over several decades. Carney himself spoke of »tens of billions of dollars«.
Why German Submarines Won the Race
TKMS prevailed over South Korea’s Hanwha Ocean. The two contenders were the German-Norwegian Type 212CD submarine and South Korea’s KSS-III model. Both were considered technically suitable. In the end, however, Canada’s decision was likely shaped not only by hardware, but also by strategic alignment.
The German submarines are conventionally powered, not nuclear-powered. That was one of Canada’s requirements. U.S. suppliers were therefore not part of the competition, as the United States primarily builds nuclear-powered submarines. TKMS, by contrast, can provide modern non-nuclear submarines designed to operate quietly and effectively in demanding waters.
NATO compatibility was also crucial for Canada. TKMS already supplies several NATO countries. Germany and Norway are jointly developing the Type 212CD. With Canada, this could become a broader transatlantic submarine family. That would make training, maintenance, spare parts, operational planning and joint missions easier.
The Arctic Becomes a Security Zone
The real core of the decision lies in the north. Canada must control a region that is becoming increasingly strategic because of climate change: the Arctic. Melting ice is making sea routes seasonally more accessible, including the Northwest Passage. At the same time, interest is growing in resources, infrastructure, surveillance and military presence.
Russia has expanded its military infrastructure in the Arctic in recent years. China describes itself as a »near-Arctic state« and is seeking a stronger economic, scientific and logistical role in the region. For Canada, this means the Arctic is no longer merely a remote natural landscape. It is becoming a security frontier.
Submarines are particularly relevant in this context because they can patrol covertly, monitor sea routes and observe hostile activity. In cold, vast and difficult-to-control waters, they are a tool of strategic presence. For Canada, the issue is therefore not only replacing old equipment. It is about becoming credibly capable under water again.
A Signal Ahead of the NATO Summit
The decision comes shortly before the NATO summit, which makes it politically charged. Canada has long faced pressure within NATO because it failed to meet the alliance’s two percent defense spending target. Under Carney, Ottawa now wants to invest significantly more. According to AP, Canada aims to spend four percent of GDP on defense by 2030 and five percent by 2035.
That is a major shift. Canada is no longer presenting itself as a laggard, but as a country redefining its security role. The submarine deal fits this new direction: higher defense spending, stronger Arctic presence and greater NATO interoperability.
For Germany, the project is also significant. TKMS is one of Europe’s most important submarine builders. A major Canadian order would strengthen German shipbuilding, secure jobs and expand Europe’s role in the defense industry. At a time when Europe is trying to build more of its own defense capabilities, this is politically more than an industrial contract.
Less Dependence on the United States
The broader strategic context is especially interesting. Canada is not moving away from the Western alliance. But Ottawa is trying to reduce its dependence on the United States. That applies to trade, energy, critical minerals and now also defense procurement.
Relations with Washington are strained. U.S. President Donald Trump’s approach to NATO, defense spending and Greenland has deepened doubts about the reliability of the United States as a security guarantor. For Canada, this is particularly sensitive because the country is geographically, economically and militarily closely tied to the U.S.
Carney’s course therefore looks like a response to a new reality: Canada remains part of the West, but is seeking more room for maneuver. The possible submarine purchase from TKMS is a symbol of that shift. Ottawa is choosing a European NATO system, not a U.S. solution. At the same time, according to media reports, Canada is also considering alternatives to additional U.S. systems in fighter jets.
A Defense Deal With Geopolitical Echoes
The case shows how much defense policy has changed. In the past, a submarine order would mainly have been treated as a procurement story. Today, it sends a signal about alliances, supply chains, sovereignty and industrial power.
Canada wants to secure its Arctic. Germany has a chance to win a historic naval contract. NATO strengthens its presence in the High North. And the United States can see that close partners are beginning to build alternatives when Washington is viewed as too unpredictable.
That is why this story is bigger than it first appears. It is not only about 12 submarines. It is about the Arctic moving to the center of the new world order – and about even traditional U.S. partners beginning to think about security more broadly.
SK
