Ottawa is poised to prioritize the proposal that generates the most jobs in Canada when determining whether to award a contract for twelve new submarines to either a German or South Korean consortium, according to the government’s lead official for military procurement. Liberal MP Stephen Fuhr’s remarks underscore the government’s efforts to strengthen the Canadian industrial sector while increasing defense expenditures to unprecedented levels.
The goal is for the investment to safeguard existing jobs, particularly in industries like steel and aluminum affected by U.S. tariffs, and to create new employment opportunities domestically. Fuhr mentioned that both submarine proposals have received approval from the Royal Canadian Navy, with the final decision to be based on factors such as cost, delivery timeline, and the potential economic benefits for Canada by the foreign companies.
“They meet the military requirements,” Fuhr, the secretary of state for defense procurement, stated in an interview, emphasizing the importance of stimulating the economy through defense spending. Prime Minister Mark Carney announced the choice between Germany’s ThyssenKrupp Marine Systems and South Korea’s Hanwha Ocean Ltd. for the submarine contract worth over $20 billion, with new vessels expected to be operational in Canada by the mid-2030s.
Carney has committed to meeting NATO’s defense spending target of two percent of GDP with a $9 billion boost to the Canadian Armed Forces this year. Fuhr emphasized a continued focus on economic benefits with other significant military acquisitions, aiming to create manufacturing jobs and encourage investments in civilian production within the country.
The upcoming surge in military spending comes with challenges due to a centralized procurement process involving multiple government departments, leading to delays and inefficiencies. Fuhr acknowledged the need for a more agile system to meet the government’s objectives promptly, with plans for a new defense procurement agency and industrial policy underway.
Both the South Korean and German consortiums have proposed building submarine maintenance facilities in Canada, contingent on government direction. The two submarine models differ significantly in size and capabilities, with both designed as diesel-electric attack submarines featuring lithium batteries for enhanced performance.
The South Korean proposal is estimated to cost between $20 billion to $24 billion for 12 submarines, with delivery of four vessels by 2035. In contrast, the cost of the German-Norwegian proposal remains undisclosed, but there is a possibility of one submarine being ready for Canada within the specified timeframe.