Canada has selected German defence company TKMS to build 12 new submarines in the largest military procurement deal in Canadian history. Prime Minister Mark Carney announced the multi-billion dollar contract on Monday, just ahead of a NATO summit in Turkey, as part of a broader push to boost Canada’s defence spending and Arctic sovereignty.
This is huge news—and not just for Canada’s military! Prime Minister Mark Carney dropped a major announcement on Monday: Canada has signed on with German company TKMS, the world’s largest non-nuclear submarine manufacturer, to build 12 brand-new submarines for the Royal Canadian Navy. The deal is officially the largest defence procurement in Canadian history, and the timing couldn’t be more deliberate.
Carney made the announcement in Halifax, Nova Scotia, just hours before departing for a NATO summit in Turkey, where member nations are widely expected to face pressure to demonstrate serious commitments to defence investment. The optics? Pretty powerful. The message? Canada is back in the business of defending itself—and it means it.
So why submarines, and why now? Here’s the thing: Canada has the longest coastline in the world, and right now, only one in four of its existing submarines is seaworthy. That’s a pretty alarming statistic for a country growing increasingly concerned about Arctic security. As climate change warms Arctic waters, new maritime routes are opening up—and with them, new vulnerabilities. The new fleet will be conventionally-powered and equipped with under-ice capabilities, making them purpose-built for exactly the kind of threats Canada is watching closely.
TKMS beat out South Korea’s Hanwha Ocean for the contract, offering what it described as a “NATO-aligned and economically transformative solution” through a joint partnership with Norway. That partnership includes shared maintenance, training, logistics, and operations—a genuinely collaborative arrangement that goes well beyond just selling ships.
Carney has been clear that the deal is about more than hardware. “This project is about much more than acquiring submarines,” he said. “It builds Canadian industrial capacity.” That framing matters. Canada has been actively strengthening its economic and security ties with Europe amid ongoing trade tensions with the United States, and choosing a European partner for its most significant military contract in history sends a clear signal about where Ottawa is looking for long-term alliances.
David Perry, president of the Canadian Global Affairs Institute, called the contract a major credibility win for Carney. “He committed to move the project on a very expedited schedule—astonishingly fast by Canadian standards—and appears to have delivered,” Perry said. He added that the new submarines should allow for three vessels to be reliably operational at any given time, which he described as a “massive increase” in capability over Canada’s current reality of occasionally having just one submarine operational.
Since taking office, Carney has raised Canada’s defence spending to 2% of GDP, with a commitment to reach 5% by 2035. The submarine contract is the most concrete and dramatic expression of that commitment yet. Formal contract negotiations with TKMS are expected to take several months, and the government has not yet released an estimated cost for the deal.
Watch this space this story is just getting started!