Canada picks German sub over Hanwha Ocean; Lee says loss will sharpen Korea's edge

The Canadian government said Monday that it had selected Germany's ThyssenKrupp Marine Systems (TKMS) as the preferred bidder for the Canadian Patrol Submarine Project (CPSP), citing NATO interoperability, early delivery and a large-scale investment plan in Canada as the deciding factors.

Canadian Prime Minister Mark Carney acknowledged that South Korea's Hanwha Ocean, which competed closely with TKMS until the final stages, had also met the Royal Canadian Navy's demanding performance requirements and presented a plan to deliver maximum benefits to Canadian workers and businesses.

However, he said the decision came down to "choosing the best platform and partnership to simultaneously meet Canada's strategic security and economic interests."

Carney's reference to "strategic security" is widely interpreted as reflecting Canada's judgment that deepening defense cooperation with Germany — a fellow NATO ally — carries greater security advantages than partnering with South Korea.

"The TKMS platform is optimized for Arctic waters and offers full NATO interoperability, enabling seamless communication, intelligence sharing and joint operations," he said.

Describing the Type 212CD submarine, which TKMS co-designed with Norway, Carney said it "will work seamlessly with NATO partners, sharing training, maintenance, parts, technology and even crew throughout its operational life."

In a separate briefing document, the Canadian government said the project would advance "Canada's broader commitments to sovereignty, continental defense and collective security with allies including NATO and NORAD." It added that the program would make "an important contribution" to meeting NATO's defense investment pledge to raise defense spending to 5 percent of GDP by 2035.

TKMS also offered to reallocate some of Germany's and Norway's order slots to Canada, allowing delivery of four submarines by 2034, ahead of the original schedule — a factor seen as further weakening Hanwha Ocean's competitive position.

Carney added that under the terms of the deal, TKMS would reinvest an amount equivalent to 100 percent of the contract value back into Canada, contributing to the infrastructure needed to operate the submarines.

President Lee Jae-myung responded Tuesday via Facebook, saying he was confident that "today's experience will become a precious foundation for further advancing our technology and raising our competitiveness." He added that "the Republic of Korea will continue to challenge boldly."

Lee said the government would "do everything it can — from research and development to export support and strengthening international cooperation — for the day when our submarines stand guard over peace and safety in the world's oceans."

Defense Acquisition Program Administration chief Lee Yong-cheol said the CPSP bidding process had been "a meaningful opportunity to confirm the technological capabilities of Korean submarines and the potential for Korea-Canada defense cooperation." He said the agency would use the experience and lessons from the competition "as a springboard to further develop our large-scale defense export strategy and strengthen pan-government support going forward."