German-owned naval shipbuilding company made the bid with NATO ally Norway, beating out South Korea’s Hanwha Ocean.
Published On 6 Jul 2026
Canada has said it wants Germany’s TKMS to build up to 12 submarines to help replace its ageing fleet, the largest defence procurement in the country’s history.
“In a more dangerous and divided world, Canada must be prepared to defend our interests, protect our citizens, build our economy, and secure our future,” Prime Minister Mark Carney said on Monday before he was to head to Turkey for an upcoming North Atlantic Treaty Organization (NATO) leaders summit.
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“Together with our German and Norwegian Allies, we will build at speed and scale to expand our strategic capabilities and create greater strategic autonomy. We will build this fleet to build Canada strong,” Carney said.
Carney did not disclose the value of the deal.
TKMS is majority-owned by German conglomerate Thyssenkrupp. It made the bid jointly with Norway, beating South Korea’s Hanwha Ocean with which it had been in a fierce competition for the past several months.
Both Germany and Norway are NATO members, as is Canada.
Canada has said the contract will be finalised by end of next year at the latest and the first four submarines are expected to be delivered by 2034. TKMS CEO has said he would like to see the contract finalised by the end of this year, the Reuters news agency reported.
Canada currently owns four submarines.
Canada’s The Globe and Mail put the contract at 20 Canadian billion dollars ($14bn) to 30 Canadian billion dollars ($21bn) for the subs themselves, and as much as 40 Canadian billion dollars ($40bn) to 50 Canadian billion dollars ($35bn) for operations, maintenance and upgrades.
Canada, like other NATO allies, has been under pressure from United States President Donald Trump to increase defense spending and has now hit NATO’s military spending target of 2 percent of GDP earlier than originally planned. NATO countries have agreed to increase that to spend 5 percent of GDP on defense and security-related investments by 2035.
TKMS shares closed the day up 11 percent.