Canada has awarded German naval shipbuilder TKMS a historic multibillion-euro contract to build up to 12 submarines, Prime Minister Mark Carney said on Monday, handing Berlin a major defence industry win on the eve of a NATO summit in Turkey.
Carney announced the decision at the Canadian Forces Base in Halifax before departing for the two-day meeting in Ankara, where alliance leaders are expected to discuss further strengthening NATO's defence capabilities.
Germany, which faced competition from South Korean supplier Hanwha Ocean, had pushed hard for the Canadian order as allies seek to counter the growing threat posed by Russia, including in the Arctic and Atlantic.
"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. To that end, we are making the largest defence procurement in our nation's history with speed, ambition, and discipline," Carney said in a statement issued by his office.
"Together with our German and Norwegian Allies, we will build at speed and scale to expand our strategic capabilities and create greater strategic autonomy."
Under the deal, TKMS will supply Canada with up to 12 Type 212CD submarines, a new class jointly developed by Germany and Norway. The "CD" designation stands for "Common Design," a standardized platform intended to reduce costs and improve interoperability.
The order is the largest in TKMS's history and makes Canada the third major operator of the Type 212CD, alongside Germany and Norway.
The submarine agreement is intended as the centrepiece of a wider economic pact with Canada as Ottawa seeks to reduce its dependence on the United States.
Canada currently obtains around 80% of its military equipment from the US, but relations have been strained since President Donald Trump returned to office last year, imposing steep tariffs on the northern neighbour and repeatedly threatening to annex the world's second-largest country.
Neither Canada nor TKMS disclosed the value of the deal, but the submarines and related support are expected to be worth around €20 billion ($22.8 billion), according to information obtained by dpa.
Including maintenance and operation over the coming decades, the overall programme could reach about 100 billion Canadian dollars ($70.3 billion), Canadian media reported.
The submarines are to be built at TKMS shipyards in Kiel and Wismar in northern Germany, where the company plans to create up to 1,500 jobs. TKMS employs more than 9,100 people worldwide, including around 3,300 in Kiel.
Canada aims to bring the first submarines into service by 2035, though recent indications suggest deliveries could begin earlier.
"Today's decision will provide the Royal Canadian Navy a critical capability, ensuring we can defend and secure Canada's vast coastline," Canadian Defence Minister David McGuinty said.
"From coast to coast to coast, this historic investment in the Canadian Armed Forces will bring strong economic benefits and jobs across the country."
German Defence Minister Boris Pistorius welcomed Canada's decision, describing it as a milestone in efforts to strengthen trans-Atlantic security.
"Together, we will build the world's largest and most advanced conventional submarine fleet," Pistorius said. "The information gathered by our 24 submarines in the North Atlantic, the Arctic and the High North can be exchanged, analysed and used quickly among us."
German Chancellor Friedrich Merz said Canada's decision to procure the German-Norwegian-designed submarines sent "a strong signal" of strategic cooperation.
"Ahead of tomorrow's NATO summit, the Canadian government is sending a strong signal of trans-Atlantic and European cooperation in the defence industry," Merz said in a statement.
Germany, Canada and Norway entered into a maritime security partnership in July 2024 that also covers defence cooperation. Denmark has since joined the alliance.
