**Canada Selects Germany's TKMS for Major Submarine Procurement**
**Date:** July 6, 2026
In a significant move to modernize its naval capabilities, Canada has announced that it will partner with Germany's Thyssenkrupp Marine Systems (TKMS) to construct up to 12 new submarines. This decision marks the largest defense procurement in Canadian history, aimed at replacing the nation's aging submarine fleet.
Prime Minister Mark Carney emphasized the necessity for Canada to bolster its defense capabilities in what he described as a "more dangerous and divided world." His remarks came ahead of a planned trip to Turkey for a NATO leaders summit, highlighting the importance of strategic military readiness. "Canada must be prepared to defend our interests, protect our citizens, build our economy, and secure our future," Carney stated.
The partnership with TKMS, which is majority-owned by the German conglomerate Thyssenkrupp, was established in collaboration with Norway. This joint bid successfully outpaced the competition from South Korea's Hanwha Ocean, which had been a strong contender in the bidding process over the past several months. Both Germany and Norway are NATO allies, alongside Canada, reinforcing the collaborative nature of this procurement.
While the exact financial details of the contract have not been disclosed, estimates from Canadian media suggest that the cost for the submarines alone could range between 20 to 30 billion Canadian dollars (approximately $14 billion to $21 billion). When factoring in operations, maintenance, and upgrades, the total expenditure could rise to between 40 to 50 billion Canadian dollars (around $28 billion to $35 billion).
The Canadian government has indicated that the contract is expected to be finalized by the end of 2027, with the first four submarines projected for delivery by 2034. TKMS's CEO has expressed a desire to expedite the finalization of the contract, aiming for completion by the end of this year.
Canada's current submarine fleet consists of four vessels, which have faced increasing scrutiny due to their age and operational limitations. The decision to invest in new submarines aligns with broader defense spending initiatives, particularly in light of pressure from the United States for NATO allies to enhance their military budgets. Canada has recently met NATO's target of allocating 2 percent of its gross domestic product (GDP) to defense spending, a goal it achieved ahead of schedule.
In a broader context, NATO member countries have agreed to increase their defense spending to 5 percent of GDP on defense and security-related investments by 2035, reflecting a collective commitment to strengthening military capabilities amidst evolving global security challenges.
Following the announcement, shares of TKMS rose by 11 percent, reflecting investor optimism regarding the contract and its potential impact on the company’s future.
As Canada prepares to embark on this ambitious submarine program, the government aims to enhance its strategic capabilities and ensure greater autonomy in defense matters. The collaboration with TKMS and Norway is seen as a critical step in achieving these objectives, as the nation seeks to modernize its military assets in response to contemporary threats.