OTTAWA – The race to define the next half-century of Canadian naval power has reached a fever pitch this week as the federal government prepares to receive final proposals for the Canadian Patrol Submarine Project (CPSP). With the March 1 deadline looming, the competition for the roughly $60 billion contract has narrowed to a high-stakes duel between South Korea’s Hanwha Ocean and Germany’s ThyssenKrupp Marine Systems (TKMS). As global tensions rise and Arctic sovereignty becomes a centerpiece of national defense, the decision represents the largest military procurement in the nation’s history.
The urgency of the search is underscored by the dire state of the Royal Canadian Navy’s current undersea fleet. Of the four aging Victoria-class submarines purchased second-hand from the United Kingdom in the 1990s, only one—HMCS Corner Brook—is currently operational. Navy Commander Vice-Admiral Angus Topshee recently warned that the existing fleet will become obsolete by 2035, leaving a “lethality gap” in Canada’s ability to monitor its three oceans if a replacement is not secured within the decade.
South Korea’s Hanwha Ocean has emerged as a frontrunner by leaning heavily on its speed and industrial scale. During a high-profile visit to the Geoje shipyard last week, Canada’s Secretary of State for Defence Procurement, Stephen Fuhr, toured the KSS-III—the 3,000-ton conventional submarine at the heart of the Korean bid. Hanwha has made a bold promise: if a contract is signed this year, they can deliver the first vessel by 2032, three years ahead of the government’s original 2035 target, potentially saving billions in maintenance for the crumbling Victoria-class.
Not to be outdone, Germany’s TKMS is pitching the Type 212CD, a stealthy, next-generation design already selected by the German and Norwegian navies. The German bid emphasizes deep interoperability with NATO allies and a long-term partnership with Vancouver’s Seaspan Shipyards to ensure the vessels are maintained and supported on Canadian soil. TKMS has recently integrated artificial intelligence experts into their proposal, promising a “digital twin” capability for the fleet that would revolutionize how the Navy manages underwater data and decision-making.
The competition has evolved far beyond hull designs and torpedo tubes, morphing into a complex “industrial benefits” war. To “sweeten the pot,” Hanwha has signed a $345 million deal with Ontario’s Algoma Steel to build a new structural beam mill, while also hinting at a domestic torpedo factory and automotive partnerships. These offsets are designed to appeal to the Prime Minister Mark Carney government’s focus on domestic manufacturing, particularly as Canada navigates a turbulent trade environment and seeks to revitalize its steel and auto sectors.
Strategic geography is also at the forefront of the evaluation. Unlike previous generations, the new fleet must possess true Arctic capability, including the ability to surface through meters of polar ice. While both bidders claim their designs can be adapted for the North, military analysts warn that modifying conventional diesel-electric submarines for long-range Arctic patrols is a significant engineering challenge. The winner will be expected to provide a persistent, lethal deterrent against Russian and Chinese vessels increasingly probing Canada’s northern approaches.
A final selection is anticipated as early as late 2026, with the government aiming for a fleet of up to 12 new submarines. For the Royal Canadian Navy, the stakes could not be higher; the choice made this year will determine whether Canada remains a “submarine nation” capable of defending its maritime interests or if its undersea influence will slowly sink into history.
