Canada Nears Decision on Submarine Supplier as Economic and Workforce Challenges Loom

Canada is set to announce a preferred supplier for its new fleet of up to 12 submarines within the next two weeks, ahead of the NATO summit on July 7. The two qualified bidders are South Korea’s Hanwha and Germany’s TKMS, each promising substantial economic benefits. Hanwha projects $70 billion in opportunities, about 500,000 jobs and $100 billion in GDP growth, while TKMS forecasts $160 billion in activity, $86 billion in GDP and over 650,000 jobs. Both firms have formed dozens of partnerships with Canadian companies such as BlackBerry, PCL Construction, EllisDon and Seaspan, and have received government incentives, including South Korea’s “Project Beaver” and design support from Norway.

The Liberal government’s evaluation emphasizes long‑term sustainment (50% of the score) alongside capabilities, cost and economic impact. Challenges highlighted include the need for extensive infrastructure upgrades, specialist maintenance facilities on both coasts, and a shortage of skilled maritime tradespeople, raising concerns about labour competition and project timelines. Once a preferred bidder is chosen, months of contract negotiations will follow before construction can begin, with delivery expected in the early 2030s as Canada plans to retire its aging Victoria‑class submarines.