Another day, another little controversy. As I am in Ottawa, I am admittedly a bit late to this today, but wanted to get something out, even if a bit small.
Anywho, Papa Brewster today put out a new article on the negotiations between Canada and TKMS on the Type 212CD. More specifically, the article claimed that Canada was looking to split the proposed order of 12 subs into two batches, the first comprising eight submarines with an option for four more.
“Canadian negotiators have proposed to break up the purchase of Type 212CD submarines from Germany into two batches with a guaranteed upfront buy of eight boats and a proposal to acquire another four in the future, CBC News has learned.
The proposal was made during a series of meetings that took place last week in Ottawa between federal officials — led by the Defence Investment Agency — and representatives of German submarine-maker TKMS and Norwegian defence giant Kongsberg.
Three confidential sources tell CBC News that the Canadian side has been talking for several weeks — since a round of meetings in Europe in September — about breaking up the order.”
Now, a personal note. This is not the first time that a split has come up. On the federal side, the idea has always, always been there. I will give that. There has also always been the caveat of “up to twelve” language being utilized. Publicly, the federal government has never once committed to twelve submarines.
I had not heard about this specifically going around until today. I had not heard of the controversy, so to say. Murray is getting this basically as it has happened, so I have also not had a whole bunch of time to reach out to folks. That does, though, lead into another important thing I wanna lead on right out the gate, to get it out of the way.
In no way are talks breaking down. I have not heard of either side pulling back in any way. In fact, as I know it, a lot of discussions have been really good and progressing really well on a lot of key areas. I feel like that needs to be said among the first, because it is very easy for news like this to get conflated into something more than it is.
I will also say I am not privy to negotiations. I don't know what is happening or what details have been discussed. I only know what I hear. Nor will I say how someone like TKMS feels about things beyond my limited understanding.
Yes, eight submarines is still a massive order, the largest order placed for the 212CD at a single time. It would still make Canada, for now, the largest operator of the Type 212CD. No one will complain about that specifically, as if eight is a bad number in itself.
Batching is not a novelty to anyone. Many modern naval procurements, including the River-class, have a commitment to a certain number of vessels but break that down into individual contracts. See also the Multipurpose Icebreakers as another ongoing example. For large, double-digit orders, it is something that does happen a lot, not always, but enough to make it a trend.
Now, to the issue at hand with all this, and it is important to make note. While twelve submarines has not been set federally in policy, in practice it becomes a lot more of a problem. Since the start of CPSP, from that first RFI, industry has not just decided but been instructed to use twelve submarines as a baseline figure.
See, the expectation has always been we would end up with twelve. That is the Navy’s desired number, and if you believe RAdm Armstrong, the number they actually need could be as high as 22 by their own assessment.
That one is a bit more out there, but it gets the point across that eight submarines can provide persistent coverage of the Atlantic and Pacific, but do not provide persistent cover for the Arctic, or really persistent three-ocean coverage along with the ability to be expeditionary in our undersea capability.
This is a number we have known about for over sixty years now. It was twelve when RAdm Jeffry Brock put out his report. It was twelve through a large chunk of the sixties. It was eight to twelve with CASAP, then ten to twelve in ‘87.
Time and time again we keep landing on twelve. That is the seemingly magic number that has been passed from generation to generation, only to be cut and cut and cut. This doesn’t come from nowhere. It doesn’t come from the Navy pushing its luck. Persistent coverage of our three oceans with the flexibility to deploy submarines abroad requires that we have twelve subs available.
I firmly believe in twelve submarines from a capability standpoint alone, before we talk about the industrial. I firmly believe that is the magic number we need, and eight would be, at best, a barebones, barely-enough-to-pass number that could provide the minimum level of coverage that Canada needs.
But at the same time, the industrial is important here and can’t be understated. There is no reality where the proposed economic and industrial package set out in CPSP, a package built by demand on twelve submarines, survives cutting a third of that out, even as an option.
Every agreement that either side made, be it Hanwha or TKMS, was based off of twelve submarines and the assumption that was what we would get. Both companies were working with the idea we would land on twelve. That messaging, even if not in policy, is still messaging that was presented to both companies, as I know it.
And it’s not just offsets and such that are affected here. Many companies who chose to participate and have developed plans around CPSP have also done it with an expectation of twelve submarines. Without it, I’m not certain that some companies would keep participating in the program on our side.
Industry takes on risk in these programs when they retool and invest in projects with certain expectations. That is their risk to take, yes, but it also creates a situation where, no matter what, even if we could negotiate some agreement with Germany, we risk losing Canadian suppliers who deem that eight boats is not worth the risk or investment.
That’s before we talk about the fact that this deal is also positioned as a catalyst for a lot of other investments being made by Germany and German industry under the guise that CPSP would serve as a foundation of a wider strategic partnership.
It isn’t just defence we could lose out on. It’s LNG, steel, critical minerals, technology investments, etc. that are all tied into CPSP and a wider partnership that now risks being scaled back due to cutting a large chunk of the expected fleet. For TKMS, this not only means having to go back to their chosen partners and realigning goals and expectations, but also needing to figure out the wider-scale pullback of certain non-defence investments tied into CPSP, investments that could represent not just significant economic activity, but also support building out Canada’s Defence Industrial Base.
This is billions, tens of billions potentially, being thrown out the side not just in offsets but through future collaborations and their long-term effects. To me, it is counter to the policy we have mandated to utilize defence as an economic engine, and risks losing a once-in-a-lifetime opportunity to forge a new trans-Atlantic partnership.
This is the biggest defence program in Canada’s history, and the one we need to work. It’s the one that we have put a lot of our power and effort into over the last year, and to throw that away would be a permanent stain on future procurements, who will see this pullback as a sign that Canada might too easily get cold feet and pull back on expectations.
I fully, 100% support twelve submarines. I think it is the best choice we have. I think less would be a mistake, even with options, which, let’s be real, are very unlikely to be executed on. I also wanna make note, I dont know all the reasons for why eight. I don't assign blame to any individual right now nor will I speculate on whats leading to this in detail. That helps no one.
Of course, I feel this deserves a full post. This is just me ranting and such while I have some free time. This is absolutely not the direction we need CPSP to go. We need big, bold, and to show that Canada is willing, when the bill comes in, to support the defence ecosystem.
I am still confident we can get there. I have fsith in people and have hope that we can find a pathway to twelve. I don't think we are near a stage to say we can't, and usually I would not be so blunt and direct, but for this one I feel I have to be a bit, to show some real support to the idea.