Two formal bids for Canada’s next submarine fleet were submitted on March 2, with a decision expected in a matter of weeks. The public debate around the proposals by ThyssenKrupp Marine Systems (TKMS) and Hanwha Ocean has centred on exactly what you would expect: delivery timelines, cost estimates, job numbers and industrial offsets. These are all legitimate considerations, but they are not the most important ones, and by treating this only as a procurement competition, Canada risks missing what each choice means for its place in the architecture of European democratic defence.
In the summer of 2024, Canada signed a trilateral letter of intent with Norway and Germany to partner in support of deterrence and defence in the North Atlantic, including cooperation on submarine construction. This letter did not bind Canada to any particular procurement, though it did signal a clear willingness to engage for that purpose. Canada also signed a partnership with the United States and Finland for icebreaker collaboration (ICE Pact). The ICE Pact is similar in form: a commitment to engage, but not for a particular platform.
In 2026, many of those same allies are moving from intention to more tangible commitments on defence integration. In February, Germany and Denmark signed a letter of intent; Canada and Denmark signed Canada and Denmark signed a defence cooperation memorandum of understanding, and Germany and Norway signed the Hansa Arrangement. The Hansa Arrangement is notable because it is the most operationally integrated bilateral defence partnership in Northern Europe, covering space surveillance, maritime security, land warfare, rapid reinforcement and defence industrial cooperation — all areas outlined as procurement priorities in Canada’s most recent defence policies, or as “key sovereign capabilities” in its Defence Industrial Strategy (DIS). While Canada has companies that deliver capabilities in many of those domains, there is currently no active goal to help these companies gain access to European markets
What’s more, the European Union opened its SAFE (Security Action for Europe) defence procurement instrument to Canada, the only non-EU country with access. In other words, our allies see us as a credible strategic partner, but our credibility alone is not enough to make us an essential partner. The countries that arrive early build their military architecture around their own strategic priorities; the countries that arrive late adapt to someone else’s. In 2024, Canada was not being invited to the trilateral letter of intent and the 2024 ICE pact as a junior partner but rather as a structural founding partner alongside a fellow Arctic nation and the EU member state most critical to Europe’s strategic future.[SR3] [EA4] In the nearly two years since, Canada has been focused on the urgent economics of the moment: tariffs, trade diversification, defence spending increases. As a result, the submarine decision has been framed almost entirely in domestic terms, as a question of jobs and industrial offsets, rather than as the strategic choice it is.
Germany and Norway, in contrast, have moved forward bilaterally. The trilateral letter has now become secondary to a deeper partnership between both nations. Canada risks being cut out not because the fundamentals have changed, but simply because we cannot travel at the speed of relevance.
So why does the future of defence integration with allies matter to Canada? Canada has signalled that it is seeking to diversify its global relationships and build greater defence industrial autonomy. The future of twenty-first-century democratic defence will rest in Europe, and Canada must continue to be a part of its architecture. We were a founding member of the North Atlantic Treaty Organization (NATO) for this very reason, and “stronger together” — the principle that NATO rests on — remains truer than ever today.
Taking the World as It Is
In January, Prime Minister Carney argued in Davos that sovereignty would no longer be grounded in rules but “increasingly…anchored in the ability to withstand pressure.” He called on middle powers to stop performing sovereignty while accepting subordination and affirmed Canada would “actively take on the world as it is, not wait around for a world we wish to be.” He was right, and integrating Canada into NATO partners’ defence architecture is a prime opportunity to realize that vision, and is one of the most consequential decisions Canada faces right now, one almost no one is discussing in these terms.
The DIS was announced in February with much fanfare, emphasizing that Canada needs to reduce its dependency on foreign suppliers and build up a more diverse and more capable defence industrial base. The small and medium-sized enterprises that make up 90 percent of the defence industrial base were identified as a key area for growth, with investments in research and development, developing intellectual property and growing exports all identified as priorities. The framework is right, but it needs to be applied to the submarine decision.
Canada has narrowed the submarine competition to two finalists: Germany’s Type 212CD, built in partnership with Norway, and South Korea’s KSS-III, built by Hanwha. Both are capable platforms, and the technical and economic arguments for each have been well rehearsed. What has not been discussed, however, is what each choice means for Canada’s strategic future.
South Korea is an important partner, and the KSS-III offers real advantages: competitive pricing, generous technology transfer, the potential for significant domestic construction and a proven track record of on-time delivery. These are not trivial considerations for a country burned by decades of procurement delays. Additionally, the Indo-Pacific is where Canada maintains its most sustained forward naval presence, deploying three warships annually under Operation HORIZON, and there is a logic to aligning submarine capability with operational reality. However, South Korea, like Canada, sits outside the anchor of European democratic defence, and the relationships that South Korea, Japan and the Philippines have with each other are not as integrated as those among NATO partners. In other words, choosing the KSS-III would build a valuable bilateral relationship, but it would not build a robust North Pacific architecture and would place Canada outside of the architecture being built for the North Atlantic.
By contrast, choosing TKMS’s 212CD does something fundamentally different. Submarines create a depth of operational integration that no other platform matches: common crew training, maintenance infrastructure, supply chains and undersea intelligence collection capabilities. These benefits would last for the 40-year expected service life. It is the difference between cooperating within an architecture of someone else’s design and being foundational to its development. Choosing this submarine would ensure that Canada plays a founding role in the North Atlantic defence ecosystem that Germany and Norway are already building with identical submarines, integrated operational planning and shared industrial supply chains. On top of that, it would anchor Canada in the European defence industrial base at a moment when Europe is investing more in defence than at any point since the Cold War. Canada’s decision to join SAFE was the right call, but it needs to be anchored by something structural. There is no better anchor in this moment than Canada’s choice to spend tens of billions on a multi-decade commitment to submarines.
A History of Partnerships
There are strong precedents in Europe for leveraging existing relationships into common platforms. European nations have collaborated on jointly developed platforms such as the Panavia Tornado and the Eurofighter Typhoon, building integrated supply chains that brought economic and industrial benefits to every participating nation. There is immense export potential for Canada if our defence industrial base can be integrated into an emerging European defence architecture. In addition to satisfying the export growth objective of the DIS, building these relationships would contribute to diversifying our defence partnerships and reducing critical dependencies.
Choosing a submarine is both a procurement question and an economic one, but more fundamentally it is a question of grand strategy, and we are at risk of making a strategic choice based on the wrong strategic calculus.
Our European allies will build a North Atlantic defence architecture with or without Canada — the Hansa Arrangement proves that. The question now is whether Canada will be inside that architecture, shaping the defence of our own maritime neighbourhood for the next century, or outside it, adapting to structures others have built.
Hanwha has brought forward a genuinely competitive bid, listening carefully to Canadian priorities. On the merits of the deal on paper alone, it may even be the stronger offer. But the procurement of submarines is less about the deal on paper and more about the deeper integration of our defence industrial base and laying the foundations for North Atlantic defence. It is about enabling Canada to sell into European defence markets instead of just buying from them, and about aligning our most consequential defence decision with our closest diplomatic and security partners. Canada’s first call in a crisis may be to Berlin. It is unlikely to be to Seoul.
The submarines Canada chooses will operate for 40 years, but the partnerships they anchor will endure longer. In 1949, Canada did not wait to be invited into the North Atlantic Alliance: we helped build it. That same instinct is what this moment demands. The architecture of democratic defence is being built right now in Europe, and Canada has a chance to be foundational in shaping it. The choice is ours — but not for much longer.
