Canada awards Germany major submarine contract

Canada on Monday awarded German shipbuilder ThyssenKrupp Marine Systems (TKMS) a multi-billion-euro contract for up to a dozen submarines, Canadian Prime Minister Mark Carney said before leaving for the NATO summit in Turkey.

"As part of our commitments to defend Canada and support our allies, I am pleased to announce that Canada has selected TKMS as the preferred supplier for Canada’s Patrol Submarine Project," Carney said, while adding the purchase would be the "largest in Canadian history" without specifying an amount.

TKMS ended up beating out South Korean company Hanwha Ocean for the contract.

The announcement comes ahead of the NATO leaders summit in the Turkish capital of Ankara, where defense spending is expected to top the agenda.

Merz says deal sends strong transatlantic signal

ThyssenKrupp's model 212CD submarine was developed for the German and Norwegian navies, and is described as combining stealth with long range and flexibile weapons payloads.

The German shipbuilder said its submarines strengthen interoperability because many NATO allies already operate its conventionally powered vessels.

German Chancellor Friedrich Merz said on X the deal was a strong signal for Germany's European and transatlantic partnership, and thanked Carney for his "trust."

Merz has put building up Germany's defense industry at the center of his plan to recover Germany's economy.

According to information obtained by Germany's DPA news agency, he submarines and related support are expected to be worth around €20 billion ($22.8 billion). The value of the deal was not immediately disclosed by Canada and TKMS.

The submarines are set to be manufactured at TKMS shipyards in Kiel and Wismar in northern Germany, where the shipbuilder plans to create up to 1,500 jobs.

Germany's defense industry boom

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A key pillar for NATO's strategy

Before heading to Ankara, German Defense Minister Boris Pistorius said the deal represented a milestone for transatlantic security, and would become a key pillar in NATO's strategy in the North Atlantic and Arctic.

He added that the future three-nation submarine fleet, now comprising Canada, Germany and Norway, makes a visible contribution to burden-sharing within the alliance, the center-left SPD politician stated before the start of the NATO summit.

"Together, we will build the world's largest and most modern conventional submarine fleet. We will be able to quickly share, analyze, and utilize the information that our 24 submarines will gather in the North Atlantic, the Arctic, and the High North," Pistorius said.

In a statement, Carney said that "together with our German and Norwegian Allies, we will build at speed and scale to expand our strategic capabilities and create greater strategic autonomy."

Canada said it aims to put the first submarines into service by 2035.

"Today's decision will provide the Royal Canadian Navy a critical capability, ensuring we can defend and secure Canada's vast coastline," said Canadian Defense Minister David McGuinty.

Germany pushed hard for order

Last November, Pistorius visited Canada alongside his Norwegian counterpart, Tore Sandvik, for talks that included a bid to get Canada to join the German-Norwegian submarine project.

At the time, Canada has just inked a strategic and economic partnership as the US under President Donald Trump rattled the transatlantic alliance.

Trump's rhetoric on cutting off Europe combined with the threat of Russia gave new impetus to tighter defense cooperation among NATO allies.

"Russia's ambition will not stop in eastern Ukraine or at the eastern flank," Pistorius said while visiting Ottawa in November 2025.

"The civilian and military lines of communication across the North Atlantic are vitally important […] for our economy and our defense alliance with Canada and the United States."

Germany, Canada and Norway entered into a maritime security partnership in July 2024 that also covers defense cooperation. Denmark has since joined the alliance.

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Edited by: Wesley Dockery

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