In a bid to secure Canada’s new submarine fleet contract, both contenders are actively pursuing deals this week to showcase their commitment to generating jobs in the country. ThyssenKrupp Marine Systems (TKMS) of Germany has partnered with Seaspan Shipyard in Vancouver to establish a maintenance facility for the potential Type-212CD submarines. This move aligns with Canada’s goal of maximizing local involvement in the estimated $20 billion to $24 billion program.
While TKMS has proposed constructing some submarines in Canada and operating maintenance facilities on both coasts, Canadian officials have expressed reservations due to the nation’s current lack of industrial capacity for submarine production. Meanwhile, Hanwha Ocean, a South Korean submarine manufacturer, has inked agreements with Canadian companies, including Algoma Steel, to invest $275 million in a new steel mill for producing high-strength alloy steel crucial for submarine construction.
Both TKMS and Hanwha Ocean have been instructed by the Canadian government to submit comprehensive proposals by March, with a decision expected later this year. The preference for the bid creating the most Canadian jobs has been reiterated by Minister Stephen Fuhr. Additionally, a South Korean delegation has signed collaboration agreements unrelated to submarines but potentially influencing Ottawa’s decision, focusing on enhancing the automotive and critical mineral supply chains.
TKMS has disclosed ongoing discussions with Norwegian and German firms to offer a substantial investment package to Canada, extending beyond submarine components to include rare earths, mining, artificial intelligence, and battery production for the automotive sector. Similarly, Hanwha Group aims to create 200,000 jobs in Canada by 2040 through collaboration across various industries, emphasizing shipbuilding.
Despite these developments, analysts caution that the actualization of job creation from these agreements remains uncertain. A past audit revealed challenges in converting defense contracts into economic benefits, underscoring the importance of transparent and effective policies in such large-scale initiatives.