Prime Minister Mark Carney announced on July 6, 2026, that a German company called ThyssenKrupp Marine Systems will build Canada's new submarines. The decision ended a 10-month competition against a South Korean company, Hanwha Ocean. Canada is now negotiating the actual contract. The Globe and Mail reported the announcement that same day.

The submarines themselves will cost $20 billion to $30 billion. Add in repairs, maintenance and upgrades over their lifetime, and the total bill reaches $40 billion to $50 billion more — making this Canada's biggest spending project ever. Prime Minister Carney made the announcement in Halifax, just before a meeting of NATO countries, to show Canada's commitment to its military allies.

Why These Two Companies?

Two finalists made it to the end. Hanwha Ocean from South Korea offered one submarine design. ThyssenKrupp from Germany offered another. Both submarines run on diesel-electric power with a special system that lets them stay underwater for a long time without surfacing for air.

But the government said the choice wasn't mainly about which submarine was better. Instead, it came down to which company could bring more money and jobs to Canada. That's where the German company had an advantage. ThyssenKrupp bid as a team with Norway, another NATO country, which means Canada's submarines will use the same systems and share intelligence with its allies more easily. Hanwha bid alone, and South Korea is not part of NATO.

Prime Minister Carney visited the ThyssenKrupp submarine factory in Kiel, Germany, in August 2025. He also toured a South Korean shipyard to see both companies' work. These visits are normal when governments make huge purchasing decisions. Right now, Canada is negotiating price, Canadian jobs, and delivery dates. The government hopes to sign a final contract by 2028.

How Markets Reacted

Not everyone in Canada was happy. CBC reported that Algoma Steel, a company in Sault Ste. Marie, Ontario, was disappointed. During negotiations, there will be tough discussions about how much Canadian steel and parts go into each submarine.

Stock market investors immediately bought shares in ThyssenKrupp. The company's stock rose almost 13 per cent on July 6, reaching a four-month high, according to The Globe and Mail. The big jump shows how important this contract is — ThyssenKrupp already builds this submarine design for Norway and Germany, so a Canadian order of up to 12 submarines would be huge for the company.

What Happens Now

Canada needs new submarines because the ones it owns are getting too old. The country has four Victoria-class submarines that were bought used from Britain in the late 1990s. The plan is to replace them before they stop working. Because building submarines takes many years, Canada's old submarines will need to keep sailing for longer than expected while the new ones are being built.

Negotiations are about to start. Government staff had to sign papers promising to keep details secret before the announcement, because submarine technology is classified for security reasons. The fact that news broke on announcement day — not leaked earlier — shows that these confidentiality rules worked.

This selection is important but not final. Canadian governments have walked away from negotiations before if the cost was too high or if companies couldn't agree on terms. A collapse would be embarrassing and risky for national defence, now that the Prime Minister has announced the choice publicly. The next big step is signing the actual contract. Until 2028, everything is still being negotiated.