Prime Minister Carney announces the preferred supplier for the Canadian Patrol Submarine Project – the largest defence procurement in Canadian history
Press Release + 3000 Word Noah Note
The assumptions that shaped decades of Canadian defence and security are being upended. Climate change is causing our Arctic region to warm nearly three times faster than the global average – a shift that adversaries are actively looking to exploit. In this increasingly dangerous and divided world, Canada must be prepared to defend ourselves and our Allies. To that end, Canada’s new government has reached 2% of defence spending for the first time since the fall of the Berlin Wall, transformed defence procurement, and secured over 20 defence and security partnerships in a year.
Key to this mission is the Canadian Patrol Submarine Project (CPSP). Submarines enable the Royal Canadian Navy (RCN) to defend threats near and far from Canada’s shores. Yet, our current fleet is aging, with only one of four submarines seaworthy. With the longest coastline in the world, Canada’s ability to deploy underwater surveillance capability is critical. Our security and sovereignty depend on them.
Today, at Canadian Forces Base Halifax, the Prime Minister, Mark Carney, announced that Thyssenkrupp Marine Systems (TKMS) has been selected as the preferred supplier to begin negotiations for delivering Canada’s next fleet of submarines to the RCN. This will be the largest defence procurement in Canadian history, and it will equip the RCN with the capabilities they need to keep Canadians safe.
With ultra-low acoustic and magnetic signatures, TKMS’ 212CD is one of the stealthiest submarines in the world. It is capable of Arctic patrol, undersea surveillance, special forces deployment, and it is fully NATO-interoperable. These submarines provide an unparalleled combination of advanced technology and lethality that will enable the RCN to detect, track, deter and, if necessary, defeat adversaries in all three oceans bordering Canada. This procurement will bolster Canadian security through a platform shared by Germany and Norway, two of Canada’s closest Allies.
The Government of Canada and TKMS will now enter into negotiations to finalise the contracts and all arrangements required to deliver the requirements of the CPSP. Canada will conclude contracting no later than the end of 2027, with the first four submarines to be delivered ahead of schedule, in 2034. In the event that negotiations with the preferred supplier are unsuccessful, Canada may designate Hanwha Ocean as the preferred supplier and enter into negotiations.
The CPSP is being advanced by the Defence Investment Agency and aligns with Canada’s Defence Industrial Strategy. Under the Build-Partner-Buy framework, the project demonstrates the Partner approach, with collaborations with trusted Allies to develop and deliver capabilities while ensuring industrial and economic benefits for Canada. The CPSP will prioritise investments across the Canadian supply chain, to create high-paying jobs, leverage Canadian defence industries, and maximise benefits for Canadian workers and businesses.
Canada is taking full responsibility for our defence, including in the Arctic. We have made the largest increase in defence investment in a generation. We are transforming our regulatory system from one that checks boxes to one that builds our defence industrial base with speed and scale. By investing in our people, our capabilities, our industry, and our partnerships, we are building a stronger, more secure Canada – one that is ready to meet today’s challenges, support our Allies, and shape a safer, more prosperous future for generations to come.
Quotes
“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. Canada’s next submarine fleet will secure our coastlines and waters, and their construction will have enormous, lasting benefits for Canadian industries and workers. 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.”
The Rt. Hon. Mark Carney, Prime Minister of Canada
“Today’s decision will provide the Royal Canadian Navy a critical capability, ensuring we can defend and secure Canada’s vast coastline. From coast to coast to coast, this historic investment in the Canadian Armed Forces will bring strong economic benefits and jobs across the country.”
The Hon. David J. McGuinty, Minister of National Defence
“This historic submarine procurement represents more than an investment in Canada’s security – it is an investment in Canadians. By leveraging the Industrial and Technological Benefits Policy, we are creating good-paying jobs, strengthening domestic supply chains, supporting Canadian businesses and innovators, and delivering long-term economic benefits across the country.”
The Hon. Mélanie Joly, Minister of Industry and Minister responsible for Canada Economic Development for Quebec Regions
“Today’s announcement demonstrates that Canada can move at the speed of relevance. Completing a competitive process of this scale in roughly eight months, while maintaining a rigorous and fair evaluation, is an important milestone in modernising defence procurement. It reflects an understanding that national security and economic security go hand in hand. We evaluated proposals on their ability to deliver world-class capability to the Royal Canadian Navy, and on the long-term benefits they will create for Canadian workers, industry, and innovation through our Build-Partner-Buy approach. Finally, this process identified two highly credible solutions. By naming both a preferred supplier and a reserve supplier, we’ve strengthened the resilience of this program and positioned Canada to deliver this critical capability faster and with greater confidence.”
The Hon. Stephen Fuhr, Secretary of State (Defence Procurement)
Quick facts
The CPSP will deliver up to 12 modern submarines to replace the aging Victoria-class fleet.
The RCN’s current submarine fleet will remain operational into the mid-to-late 2030s.
The project will be subject to Canada’s modernised Industrial and Technological Benefits Policy, ensuring the investment generates long-term economic benefits for Canadians.
The Government of Canada has conducted a rigorous, multi-stage procurement process to identify a preferred supplier, including:
A Request for Information issued from September 2024 to February 2025.
Identification of two qualified suppliers on August 26, 2025.
Issuance of proposal instructions in November 2025.
Submission of proposals in March 2026.
A bid clarification and amendment process aligned with Canada’s Defence Industrial Strategy, concluded on April 29, 2026.
Advancing the CPSP supports Canada’s broader commitments to sovereignty, continental defence, and collective security with allies, including through the North Atlantic Treaty Organization (NATO) and the North American Aerospace Defense Command (NORAD).
To enable defence industries to scale up more easily and with maximum benefit to the Canadian economy, the government launched the Defence Investment Agency and the Defence Industrial Strategy.
The Defence Investment Agency is modernising Canada’s defence procurement by centralising expertise, cutting red tape, and streamlining decisions – supporting the implementation of Canada’s Defence Industrial Strategy and helping accelerate defence investments.
The Defence Industrial Strategy positions Canadian industry to take advantage of $180 billion in defence procurement opportunities and $290 billion in defence-related capital investment opportunities in Canada over the next 10 years.
Noah Note: And with this, the long-awaited Canadian Patrol Submarine Project finds its home. What started as an ambitious RFI back in 2024 has quickly turned into one of the most consequential, publicized, and dynamic projects, I would say, in Canadian history.
TKMS and Kongsberg, operating as Team GERNOR, have claimed the preferred supplier designation from the federal government. As always, there is no contract today. The selection of a preferred supplier merely sets the table for negotiations to a final contract.
While the federal government will want to move quickly, and I'm sure that the Navy would like to see the contract signed, it is highly likely that comes in 2027. The typical "quick" timeframe is about a year. Keeping in mind, of course, that CPSP will be the largest procurement contract in federal history, and in this case also includes additional negotiations on build slots for submarines from both Germany and Norway
Case in point, it was never gonna be a quick contract signing, as the three respective governments now head into one of the largest negotiations in Canadian history. Throughout this, we will be here to cover it to the best of our capability.
Few can say that there was no better show than this one, though on a personal note, I am tired, so very tired. It has been a long year and a half, one of ups, downs, endless debates, and a fierce competition that brought, I think, everyone to the brink. There is a sort of spirit to it all.
Before I get into it, a quick message to all of those on both sides who follow me, because I know you will see this. I am grateful to have been part of your respective journeys. I am grateful that you put your faith in me to carry your messages and be a partner in your Canadian journey. I was proud to maintain both Hanwha and TKMS as sponsors of our brand. I was overjoyed to work with both of you to provide the best content to Canadians possible.
Take pride in yourselves. You have all put your heart and soul into this, more than many will ever know. You worked harder than any expected of you, and you fought until the very last moment, and I know you will all walk away from this better than you came in.
I know you all had the best in your hearts for my country, and you both gave everything you have. For that, you have my thanks and my gratitude for your efforts. No matter the result, I am proud to call many of you my friend. You have all given me the experience of a lifetime over the last year and a half. It has been a wonderful journey, and I was happy to share it with you, even for a while.
This was not an easy choice for anyone to make. I do not envy the people up top who held this in their hands. Until the end, the field was fairly well split. There was no universal consensus, and the decision came down to the last moment, and very much to the Prime Minister to make the call.
There was no universal consensus, and I know this choice didn't come easy for anyone. Both sides put all they could into it. Yet in the end, the GERNOR option pulled ahead. The European focus was championed heavily by those in the PMO as an opportunity to open doors and integrate Canadian industry into the wider European ecosystem, especially as European interest in Canadian expansion grows.
At the end of the day, that ecosystem came out on top. In the final weeks and months of the competition especially, the banner of Europe rallied to the call of unity, to stand with their hands at the back of Team GERNOR. That push, and that united front, is very likely what pushed that sense of alignment forward.
You don't need to look far for it. Just after CANSEC, Italy's Fincantieri, a noted ally of TKMS, signed a new MOU with Magellan Aerospace to investigate the potential production of heavyweight torpedoes and undersea countermeasures, building off the proposed investment TKMS plans to make.
While not in the 212CD network, Fincantieri is in the family, and they, among others, are also looking to Canada and our choices. It is the first example of the TKMS family taking notice and making proactive moves to jump in and secure capacity in a future Canadian submarine industry; and, as I understand it, far from the only one being discussed.
Another outside addition: Navantia of Spain and TKMS have also recently signed an MOU to investigate collaboration on naval shipbuilding. While this new agreement is young, I am also led to believe that Navantia is looking to Canada with interest, building off some of their previous engagements with industry.
Increasingly, the European front is united in industry, in the political sphere, and diplomatically to present the 212CD not as a German-Norwegian partnership but as a foundational Canada-Europe partnership that will build off the foundation of agreements like SAFE and the EU-Canada Security and Defence Partnership to create a united Atlantic front that promotes collaboration and joint investment, and opens the European market to Canadian industry.
That is the message being given and the efforts of third parties to throw in their support become focal. The European bloc, while divided for a long time, came around in the home stretch to throw its support behind Team GERNOR.
As will always be said, the true nature of both bids will probably never be known. Neither side pulled all their cards, I know that, lol. Both sides submitted bids in the thousands. Both held the full packages tightly to their chests. TKMS far more than Hanwha, who was far more open.
That, of course, should be noted in any case, as it means we take any analysis as we get it. We have limits to what we know, and that unknown can mask deciding factors that we don't know about. Truthfully, I wish we didn't have such things; in my ideal world, we would know everything on the table, but we don't live in that world.
So we take it as presented. TKMS's focus has, up to this point, been on building the submarine ecosystem for themselves. That includes some major moves, including launching the first research initiatives under the CDDE and a purchase of Amanox steel from Valbruna ASW to get them certified to produce non-magnetic steel for submarines under the German Institute for Defence Material and Production Technology (WIWeB).
Those actions were, at the time, quite the confident move, not knowing that you would be the preferred supplier. It was a risky and confident gambit to make. TKMS in the last few weeks has had a renewed focus on supply chain building, particularly with steel, including a fairly notable deal just last week with Patriot Forge.
For TKMS, a country full of critical minerals, a highly skilled workforce, world-class institutions, and an economy looking to pivot to new industries and partners leaves no shortage of opportunities to benefit.
There is untapped potential, some say, in Canada and what she can do. For the Germans? The Norwegians? The question on investment is not a matter of if there is potential, but just how much there is. For a company like TKMS and partners, for whom domestic industry is struggling to keep up, Canada presents the proverbial land of milk and honey: full of industry and talent ready to be put to work, to contribute, but one seldom used and crying out for opportunity. That is true of both, but wspecially highlighted in every talk I have had.
Germany does not make the steel that will go into the 212CD domestically, but Canada will. Canada will build modules and critical components for the hull, even if they are not assembled here. Companies like CAE could provide training systems across the whole user base, while companies like Magellan support the ever-increasing demand for heavyweight torpedoes and other munitions that TKMS is struggling to keep up with domestically.
As one person told me, Canada is the anchor partner, the one who does a bit of everything, even if the final product is not made here. Canada may not be the lead, but we will be the primary partner when it comes to building capacity end-to-end across the submarine supply chain.
We will make the steel, the critical components, the munitions. We will help continue to build ORCCA; we will make the lithium batteries. We might not take the lead, but we will have our hands across the supply chain, beyond even Germany and Norway.
That doesn't come from demands. It comes because the industry, workforce, resources, and ecosystem are here to build it, and build it quickly. There is nowhere like Canada that could contribute, that has the potential to commit, as far as TKMS officials have told me. To them, Canada is the best partner to work with here to fix these systemic issues.
TKMS has been open in offering us an equal stake in the partnership; that means supporting Canadian industry through tech transfers and IP for key systems, subsystems, and components. TKMS is open to standardizing Canadian technology and systems across all variants of the 212CD. This means adopting Canadian systems and technology as standard across the entire production line.
Yet in the end, it is likely what was unsaid that tipped the scales, and outside partnerships. German industry has also stepped up in the last few weeks to try and lend support, such as Daimler's partnership with Roshel, which secured a key automotive investment to build off for the German government.
Beyond TKMS and Kongsberg, the German and Norwegian governments have also been committed to supporting Canadian industry through CPSP. The Deutsche Marine has recently signed a contract to procure Lockheed Martin Canada's CMS330 combat management system in a staggering $1-billion CAD deal. The German government has also proposed further cooperation with Bombardier, including the order of additional Global 6500s.
Furthermore, Canada and the EU signed a new Joint Declaration on Critical Minerals Collaboration, aiming to strengthen cooperation and multilateralism in support of secure supply chains, bilateral investment and trade, industrial competitiveness, and sustainable growth. This was followed by a new Letter of Intent with the European Investment Bank to negotiate an agreement with Canada that will pave the way toward cooperation on projects in Canada and abroad.
This all comes just after the European Union committed 200 million to helping establish a hydrogen export corridor between Canada and Germany. Also just recently, Siemens and Rock Tech Lithium signed a non-binding Memorandum of Understanding (MOU), laying the foundation for a long-term, multi-phase strategic partnership to develop state-of-the-art lithium conversion capacity in Canada.
In total, TKMS claims that its package could deliver an $86-billion boost to Canada's gross domestic product and create over 654,695 job-years of employment over the lifetime of the deal. Of those, 50,000 jobs could be created over the next five years.
On the other end, of course, we have Hanwha, who put their all into this, who built up one of the most powerful public Canadian talent rosters possibly in history. Over 80 partners made up the ranks of Team Korea, stretching across industries, from coast to coast.
One of the big accomplishments here, I think, is the fact that Hanwha was able to get a lot of the KSS-III supply chain together. They managed to get partners like Safran, Curtiss-Wright, Babcock, and LIG involved in their bid, and to commit to Canadian investment, something that I didn't expect them to accomplish, but they happily proved me wrong.
Team Korea committed tens of billions to supporting energy infrastructure, from Hyundai's Project Beaver to Kanata LNG. Hanwha committed to investment in offshore wind. They committed to the expansion of Algoma Steel and the establishment of dedicated rocket and torpedo production facilities.
Their partnership with the AMPA looked at establishing a new manufacturing facility for the production of military and commercial vehicles in Canada. They committed to the establishment of a new shipbuilding training institution in partnership with Mohawk College and Ontario Shipyards that one stings hard. That was on top of promising to invest in modernizing Ontario Shipyards' facilities.
Further discussions had been had on the domestic production or IP transfer of key systems, including lithium-battery systems, fuel cells, the sonar suite, and vertical launch systems. That includes bringing together industry players like BlackBerry, Geospectrum, and Ultra; players in space like Telesat and MDA; and Reaction Dynamics and Maritime Launch. Critical mineral companies like Defense Metals and Frontier Lithium, and even players in forestry like Centurian Forest and Western Lumber.
This all builds off several agreements outlined by Canada and Korea over the last year. This includes the new Canada-Korea Security and Defence Cooperation Partnership signed in October, a new agreement on the Protection of Military and Defence Classified Information, and, most importantly, an MOU on Industrial Cooperation. They managed to secure an MOU with Alberta and Investissement Quebec.
Hanwha stated that investments related to CPSP are forecast to support approximately 15,000 average annual jobs over the program period. This hypothetically equates to more than 200,000 job-years in cumulative employment impact over the 2026-2040 period, encompassing direct, indirect, and induced employment.
I have missed on HD Hyundai, and of course I have not explored all the partnerships here. The point here isn't to make it a versus. It is to show that both sides brought hell to this competition. They both gave it their all, and to add to that, these were never all there was! There was still so, so much more. Both sides put money and commitment on the table for us. Both had their reasons beyond us to want to win.
For TKMS, the value was in an untapped market ripe for potential expansion; for Hanwha, it was showing they could break into that NATO ecosystem, could break into the Western naval market that they've never been able to get into, to show that they could put up a fight against the person at the top of the mountain. And despite any loss, they sure put up a hell of a fight, and gave a good bruising in the end.
They showed they could bring it. I will say that. They showed they were ready, and they could go toe-to-toe. That is a massive accomplishment in itself. Yet in the end, we are left with one winner and one submarine committed to. That is the Type 212CD.
I would be remiss if I didn't mention the common North Atlantic presence, built off common platforms (like the P-8, F-35, Type 26, and GlobalEye), a common framework for things like training, personnel exchange, and obsolescence management, common facilities for things like maintenance, and developing common supply chains.
Increasingly, this reality is becoming clearer across the Trilateral, primarily with Norway, with whom, as I always point out, we share quite a lot of commonality of equipment. The idea of Norway and Canada sharing a common fighter, surface combatant, submarine, maritime patrol aircraft, etc., is now our future, even if not identical across the board.
All of this presents opportunities. It turns the North Atlantic, in theory, from a separate set of nations into a common area where countries like Norway, the UK, Canada, Germany, etc., can operate under a framework of common, interoperable defence and security.
All of these tie back to the core philosophy of mutual cooperation and collaboration, creating a pan-Atlantic ecosystem that not only supports the economic goals of the federal government but also helps support Europe's growing demand for critical minerals, munitions, and diversified supply chains.
That, at the end of the day, is the concept that won it for them. That is what I believe pushed the Prime Minister in this direction. That common framework, that common ecosystem. Of course, I don't know the guy, so I can't say exactly, but I would not be shocked if that was the thing that made the final call.
Over the next few months, we will be privy to intense negotiations on delivery schedule, IP sharing, industrial benefits, investment, etc. Throughout that, we will likely see more of the TKMS commitment leak. This will be the hardest part, and for TKMS, it comes with the harder need of getting commitment from both Germany and Norway to sacrifice a slot.
Now, Canada does have severe leverage here, being the largest single operator of the class. However, both Germany and Norway, especially Norway, are also working off aging vessels that need replacement. While both seem open, it would be foolish to dismiss the potential concerns their navies and governments might have, and how that can affect things. TKMS has committed to four subs by 2034 apparently.
That is a big of a flag to me. That is two years ahead of the schedule I heard last month. That means deliveries from batches either earlier than I expected, more than one slot each, or TKMS commiting to getting our subs in ahead of everyone else. All of which I have significant questions on.
I need that plan. I need to see it. I need to ask for it because that is a timeline that I have not heard before and it is a very extreme shift already.
After that is unknown. They will likely be pressed hard there, but that is how they have been since the beginning. The path from downselection to contract signing is not easy, and for TKMS, the pressure is now off their hands and into the hands of Norway and Germany.
That also does not speak to the industrial scale, perhaps one big thing Hanwha and Hyundai had was capitak and resources to commit to helping support an industry, while TKMS will be trying to build out a fairly expansive and comprehensive supply chain beyond what I really think others have asked.
Even on module production, on the steel itself, the facilities, the workforce to move on non-magnetic steel, which does not currently exist at scale in Canada, things like Torpedo production. All of these are significant, not easy, and are distributed at a scale that not even Norway and TKMS maintain themselves.
It is a monumental challenge for an industry that right now does not exist, little basis and industry. Even the work done on the Victoria, some could be transmitted to the 212CD, is mostly non-applicable being fundementally different platforms.
They have done this before. They have played the song and dance. Yet as the largest single order of conventional submarines in NATO? There is undoubtedly pressure there, and in truth, I hope our federal government truly knows and understands it.
The path forward is not easy, but the path is there now. It didn't exist a year ago. That is on the DIA, the true winners of CPSP, who used every tool, every power, every effort they could to get CPSP done, to show they could handle a massive project and deliver results in timeframes we couldn't dream of.
To those of you at the DIA, congratulations. You have pulled off a miracle. You have done what many saw as impossible. You used everything, gave every effort, fought every battle possible to get this downselection. Yet sadly, your work has only just begun.
Now comes the hard part, and the hundreds of projects that will soon fall under your banner. Your work has only begun, my dear, young DIA. Perhaps in better times you would have been given some rest, but that is a luxury we can't provide you.
I have faith in you, if that means anything. I have hope for you to do wonderful things. Today, though, I am just happy I can rest. Take some joy, if you can. I know many of you will go on arguing and fighting. That is alright; I do not blame you.
For me, who has been on this for a year straight, who has pushed through, I feel, more on submarines than anyone else in this country over the last year, who has written perhaps near 100,000 words on CPSP, I am tired. I am admittedly happy to be done. I feel as if a chain has been lifted off my chest and I can finally take a deep breath again.
But I can only rest so much. There is still much to do. This circus, sadly, never sleeps, and they always need a clown like me on standby.
Thanks, Noah, for all of your hard work to keep us well informed about the CPSP as well as the many other projects now emerging during this most fascinating period of Canadian defence procurement.
Obviously I’m not privy to the full bid but I was a big supporter of the Korean option. I’m very concerned and skeptical about the German ability to meet the timeframe for delivery.