This week, the two contenders vying to construct Canada’s new submarine fleet are actively pursuing deals to showcase their commitment to generating employment opportunities within the country. ThyssenKrupp Marine Systems (TKMS) from Germany has partnered with Seaspan Shipyard in Vancouver to establish a maintenance facility for the prospective Type-212CD submarines. This facility is crucial for Canada’s plan to involve local companies in the estimated $20 billion to $24 billion submarine program.
TKMS has proposed the idea of potentially building some of the 12 submarines in Canada and operating maintenance facilities on both coasts. However, Canadian officials have raised concerns about the country’s current lack of industrial capacity for submarine construction. In a separate development, Hanwha Ocean, a South Korean submarine manufacturer, has signed partnership agreements with Canadian firms, including Algoma Steel, committing to invest $275 million in a new structural steel beam mill to produce high-strength alloy steel required for submarine construction.
The Canadian government has requested full proposals from both TKMS and Hanwha Ocean by March, with a decision expected later this year. Vice-Admiral Angus Topshee of the Royal Canadian Navy emphasized the urgency of securing a submarine fleet as Canada currently relies on only one operational submarine. Minister Stephen Fuhr highlighted the government’s priority to select a bid that maximizes job creation in Canada.
Furthermore, a South Korean government delegation recently signed agreements on industrial collaboration to enhance various sectors, potentially influencing Canada’s decision on the submarine contract. TKMS is in discussions with Norwegian and German companies to propose significant investments in Canada beyond submarine construction, including rare earths, mining, artificial intelligence, and battery production for the automotive sector. Hanwha Group aims to create 200,000 jobs in Canada by 2040 through collaborative efforts in shipbuilding and other industries.
While these developments hold promise for job creation, analysts caution that the actualization of these opportunities remains uncertain. A 2024 audit revealed gaps in demonstrating economic benefits from defense contracts, emphasizing the need for improved tracking and transparency in such initiatives.
