In an effort to consolidate itself as the leading available bidder, TKMS is in the process of expanding its proposal submitted to the Canadian Navy to supply twelve new Type 212CD submarines. To this end, it is negotiating with various Norwegian and German companies to make the offer more competitive in Ottawa’s eyes. According to the company’s CEO, Oliver Burkhard, these talks do not focus solely on the construction of the submarines themselves, but also extend to currently key areas such as rare earths and artificial intelligence.
It is worth recalling at this point that the Type 212CD submarine bid promoted by TKMS had already been shortlisted in 2025 by the Canadian Navy, alongside the South Korean bid from Hanwha Ocean, which is offering its KSS-III design to replace the aging Victoria class. As this represents a major contract for whoever secures it—requiring an investment estimated at around €10 billion for the submarines alone—both companies are immersed in intense competition that has already left behind proposals from Sweden’s Saab, France’s Naval Group, and Spain’s Navantia.
Returning to TKMS’s efforts to secure a place in Canada’s future submarine fleet, it is important to highlight the following statements by CEO Burkhard, who said: “It’s no longer just about the submarines. It’s mainly about what lies beyond.” He later added that the objective was to present a much broader and more attractive economic package for Ottawa that would ensure selection by the Navy, citing as an example the German space company Isar Aerospace as part of the discussions currently underway to that end.
Compensation mechanisms as a key factor
Beyond the efforts made by the submarine manufacturer itself, it is also useful to note that both Germany and Norway are analyzing their own compensation mechanisms to make the proposal submitted to Canada more attractive, thereby reinforcing the approach adopted by TKMS. As we reported in October 2025, Berlin was considering equipping its own navy’s ships with the new CMS 330 combat systems from Lockheed Martin Canada, while Oslo could facilitate the incorporation of Canadian-developed artificial intelligence systems into its own forces, in addition to a potential transfer of design plans for future bases that would host the Type 212CD.
The approach described above is not random, considering that part of Canada’s defense strategy is that with every military procurement, all compensation opportunities are also explored in order to achieve a greater impact on the local economy. As stated by the Ministry of Innovation, Science and Economic Development: “All defence procurement must advance Canada’s national and military interests, as well as provide a clear and measurable net benefit to the Canadian economy.”
This consideration can also be seen in another major acquisition process underway in Ottawa, namely the procurement of new fighter aircraft for its air force. Seeking to gain ground in this area, Saab is pushing its offer of 72 Gripen E/F fighters by proposing to manufacture them in Canada, which would have an impact on the creation of around 10,000 jobs, with the added possibility that these facilities could also be involved in producing aircraft destined for the Ukrainian Air Force.
A fractured relationship with the U.S.
On the other hand, with this latter issue still in mind, it should also be highlighted that if Canada were to opt for the purchase of German-made submarines and Swedish-made fighter jets, it would send further signals of its intention to take geopolitical distance from its U.S. neighbor in favor of closer ties with its European partners. This is not a minor point, given current tensions stemming from Washington’s attempts to annex Greenland, citing security motivations related to the presence of Chinese and Russian vessels in the region—one of the reasons why Ottawa is also seeking to strengthen its combat capabilities.
On the political front, the government currently led by Prime Minister Mark Carney has already shown clear signs of this distancing, not least through a meeting with Chinese President Xi Jinping. On that occasion, the prime minister stated: “In terms of how our relationship has progressed in recent months with China, it is more predictable, and you can see results coming from that.” This was undoubtedly a jab at the United States, whose president has referred to Canada as the “51st state” and has imposed tariffs on key products such as lumber, steel, and automobiles.
In addition, Canadian military leadership has already begun developing theoretical models to assess the impact of, and response to, a potential U.S. invasion. While this remains a conceptual exercise and such a move is considered highly unlikely, it nonetheless reflects a significantly cooler relationship than in the past. In concrete terms, it is the first time in more than a century that such planning has been undertaken.
*Images used for illustrative purposes.
*Translated by Constanza Matteo
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