Canada to announce winner of $38.6b submarine contract Tuesday

Canada is expected to announce the preferred bidder for its next-generation submarine program (CPSP) — valued at up to 60 trillion won ($38.6 billion) — on Tuesday Korean Standard Time. A South Korean win would mark the country's largest single defense export deal since its founding.

The Globe and Mail reported Sunday, citing multiple government sources, that Prime Minister Mark Carney plans to officially announce Monday which country — South Korea or Germany — has won the CPSP contract. The announcement is expected to come in the early hours of Tuesday in Korea.

According to Carney's schedule posted on the Prime Minister's Office website, he is set to arrive at a naval base in Halifax, Nova Scotia, at 4:50 p.m. Monday and deliver an announcement on "new measures to make Canada more secure, resilient, and prosperous" at 5:10 p.m. local time — 5:10 a.m. Tuesday Korean Standard Time. He is expected to name the preferred bidder for the submarine project at that event.

The Globe and Mail noted that the announcement designates a preferred negotiating partner ahead of a final contract signing, and that detailed negotiations over terms could take years. Carney is scheduled to depart for Turkey immediately afterward to attend the NATO summit.

The CPSP aims to procure up to 12 diesel-electric submarines to replace Canada's aging Victoria-class fleet. Including construction costs and 30 years of maintenance, repair and operations after delivery, the total program value is estimated at 60 trillion won.

Hanwha Ocean has proposed its 3,600-ton Jang Yeong-sil-class (KSS-III Batch-2) submarine — an upgrade over the Dosan Ahn Chang-ho-class (KSS-III Batch-1) — and offered to deliver the first vessel by 2032 and four submarines by 2035 to prevent gaps in Canadian naval capability. Germany's TKMS, meanwhile, is offering its 2,800-ton Type 212CD model, co-developed with Norway.

Industry observers generally regard the South Korean submarine as technically superior, citing features such as standard-fit vertical launch systems. Germany, however, is pressing NATO alliance solidarity as a key advantage, arguing that a German selection would allow Canada to seamlessly share training, logistics and parts supply chains with existing European allies. A South Korean win would mark the first time Canada has procured a major weapons system from a non-Western supplier.