Carney Picks German Submarines, Cites NATO Arctic Threat

Prime Minister Mark Carney picked a German-Norwegian offer to build Canada's next submarine fleet, warning that melting Arctic ice is opening a new security front for NATO.

Thyssenkrupp Marine Systems is the preferred supplier for as many as 12 submarines, Carney said in a speech at a naval base in Halifax, Nova Scotia, en route to the NATO summit in Ankara, Turkey. The German firm beat out Hanwha from South Korea in what he called a close competition.

“As threats grow faster and harder to detect, Canada’s Arctic is becoming integral to the security of both North America and NATO’s western flank,” Carney said in prepared remarks. It is Canada’s largest-ever military procurement, worth “tens of billions” of dollars, he added, with final numbers subject to negotiation.

Canada only recently met NATO's 2% of GDP defense-spending target after years of lagging behind. Last year's summit set a new target of 5% by 2035, including 1.5% in related investments. Carney said Canada is on track to hit 4% by the end of the decade.

Climate change means Canada's Arctic is warming nearly three times faster than the global average, “a shift that adversaries are actively looking to exploit,” said an accompanying statement from Carney's office.

TKMS won the bid with a model that is “one of the stealthiest submarines in the world” and can travel underwater for 40 days in near-total silence, the government said. Carney noted it is ideal for Arctic transit and fully compatible with other NATO allies' vessels. TKMS supplies a third of the alliance's members.

Canada plans to conclude commercial negotiations by the end of 2027 and, if successful, take first delivery of four submarines by 2034, of a contract eventually totaling as many as 12. The timing marks an acceleration from a previous schedule. Canada reserved the right to shift talks to Hanwha if negotiations with TKMS fall through.