Canada has chosen Germany's ThyssenKrupp Marine Systems (TKMS) to build up to 12 new submarines in what Prime Minister Mark Carney described as the largest military procurement in Canadian history. The announcement, made on Monday at a military base in Halifax, Nova Scotia, came on the eve of a NATO summit in Ankara, where alliance members face mounting pressure to back defence spending commitments with concrete action.

TKMS, the world's largest manufacturer of non-nuclear submarines and a major supplier to NATO navies, beat out South Korea's Hanwha Ocean in a tightly contested bidding process. Both companies had offered diesel-electric submarines — TKMS with its 212CD model and Hanwha with its KSS-III Batch-II — along with promises of significant economic benefits for Canada. Carney highlighted TKMS's deep integration with the alliance, noting that the German firm supplies submarines to over a third of NATO members, which would enhance interoperability. The contract value for the submarines themselves is estimated at more than US$12 billion, but when roughly 50 years of maintenance is factored in, the total bill could exceed US$70 billion. Canada and TKMS will now enter formal negotiations to finalise terms, a process expected to take years.

The new fleet will replace Canada's four ageing Victoria-class submarines, purchased secondhand from the United Kingdom in the late 1990s, most of which are currently undergoing maintenance. It marks the first time Canada has bought brand-new submarines. The diesel-electric vessels are designed for Arctic operations, capable of extended missions beneath ice using modern stealth technology, and will help Canada assert a stronger presence along critical routes such as the Northwest Passage. Carney said Germany and Norway have offered to make production slots available so that Canada can receive its first four submarines as early as 2034.

The decision fits into a broader shift in Canadian defence and trade policy. Under Carney's government, Canada has pledged to raise defence spending from the NATO benchmark of 2% of GDP — a target it reached this year — to 5% of GDP by 2035. Recent political tensions with the United States have pushed Ottawa to look increasingly to European and other non-American suppliers to modernise its military. No US company entered the submarine competition, as American shipbuilders produce only nuclear-powered vessels. Canada is also weighing the purchase of 72 Saab Gripen fighter jets from Sweden and has already committed to six Swedish GlobalEye surveillance aircraft, suggesting a significant reorientation of its defence procurement toward allies beyond its southern neighbour.

The timing of the announcement, ahead of the NATO summit, was clearly deliberate. NATO Secretary General Mark Rutte welcomed the wave of new alliance contracts being announced this week as "the crucial kit we need to deter and defend." For Canada, the submarine deal represents not only a major military investment but a signal of deepened commitment to collective Western security at a moment of heightened geopolitical tension.